The Applications Of Improved DEA Models In Airline Efficiency

Airlines are an important component of the transportation system and have a strong effect on the development of modern society. The global airline industry suffered a lot from the U.S. financial crisis in 2008. In recent years, the increasing Revenue and the fluctuant profit have indicated that airlines have low capability in controlling operating costs. Nowadays aviation carbon emissions has aroused widespread concern around the world, at the same time, European Union enacted the 2008/101/EC decree in November 2008, in which international airline business was brought into the carbon emission trading system. This undoubtedly worsens the airlines operation status. Facing the serious environmental pressure and economic situation, airlines should seek the ways to get through the difficulties and an important way is to improve efficiency. The scientific and reasonable evaluation of airline efficiency lays foundation for establishing and implementing relevant laws, and it is useful for airlines to realize sustainable development and improve the comprehensive strength.Taking the global airline efficiency as a research perspective, this article analyzes the airline efficiency evaluation method based on literature review, then establishes dynamic and three-stage strategic operating framework of airline efficiency, and proposes improved Data Envelopment Analysis (DEA) models to evaluate the efficiency of international airlines. The results can provide new ideas and guidance to promote airline efficiency. The main contents are as following:Firstly, since the existing DEA models have not considered the effect of carry-over activities between two terms and not distinguish between effective decision making units (DMU), a virtual frontier dynamic range adjusted measure (RAM) is proposed. The model considers the time dimension based on the decision-making and target space of traditional DEA, which can investigate the influence of dynamic factor on the overall efficiency and the efficiency changes over time. The model provides a new train of thought to solve the multi-period efficiency evaluation of more complex system. An empirical study is carried out with the data of the global airlines; the results indicate that the new model can distinguish the efficient DMUs. The rationality of the model is verified through analyzing the actual data and the management measures of the airlines.Secondly, based on the existing research, airline efficiency is divided into three stages: Operations Stage, Services Stage and Sales Stage. The new three-stage strategic operating framework of airline efficiency is a modification of existing models. Compared with the existing strategic operating framework, the framework in this paper subdivides the input and output index and considers the freight index, which enriches the existent framework research. A new model-Virtual Frontier Network Slacks-Based Measure (SBM) is proposed, and some useful conclusions are obtained.Thirdly, aviation carbon emissions have drawn close attention all over the world. Aviation was included in the European Union Emissions Trading Scheme (EU ETS) in 2008, and the undesirable outputs, such as greenhouse gases, will seriously affect the airline efficiency. This paper studies the disposability of the undesirable outputs, and constructs the two models:Network SBM with weak disposability and Network SBM with strong disposability. The empirical study, with the data of 22 international airlines from 2008 to 2012, compares the advantages and the disadvantages of two models, and then analyzes their applicability scope and discusses the impact of EU ETS on airline efficiency.Fourthly, according to the conclusions ahead, a new model, Network Range Adjusted Measure with weak disposability, adding the restraint of the weak disposability, is proposed to evaluate the efficiency of 18 international airlines during 2008-2014. The results of empirical study show that:The average overall efficiency of Eva Air is highest and Scandinavian Airlines has the second high overall efficiency. Incorporating airlines into the EU ETS has a certain positive effect on the improvement of most global airlines. The conclusions can offer useful ideas and guidance for the airline practical operation.