Developing a Non-Parametric Efficiency Measure That Accounts for Perceived Airline Service Levels and Profitability

Customer service influences satisfaction, loyalty, repeat business and hence potentially profitability. This paper investigates whether airline customer service impacts upon airlines' profitability (the top-150 airlines worldwide). As the results suggest that this impact is limited, the authors then apply data envelopment analysis (DEA) models and develop, for the first time, a single efficiency measure that combines the typical airline targets of maximisation of RPKs, customer satisfaction, and profitability. The authors further use second-stage truncated regressions and show that only load factor (but neither fleet age, share of cabin crew in total staff nor low-cost carrier (LCC) operation) have a significant impact on overall airline efficiency.

• Supplemental Notes:
  • This paper was sponsored by TRB committee AV040 Aviation Economics and Forecasting.
• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Merkert, Rico
  • Pearson, James
• Conference:
  • Transportation Research Board 93rd Annual Meeting
  • Location: Washington DC
  • Date: 2014-1-12 to 2014-1-16
• Date: 2014

Language

• English

Media Info

• Media Type: Digital/other
• Features: References; Tables;
• Pagination: 14p
• Monograph Title: TRB 93rd Annual Meeting Compendium of Papers

Subject/Index Terms

• TRT Terms: Airlines; Customer satisfaction; Customer service; Data analysis; Profitability; Regression analysis
• Subject Areas: Aviation; Economics; I10: Economics and Administration;

Filing Info

• Accession Number: 01516534
• Record Type: Publication
• Report/Paper Numbers: 14-1633
• Files: TRIS, TRB, ATRI
• Created Date: Feb 28 2014 1:32PM