A non-parametric efficiency measure incorporating perceived airline service levels and profitability

R. Merkert, James Pearson

Research output: Contribution to journalArticle

35 Citations (Scopus)

Abstract

Customer service influences satisfaction, loyalty, repeat business, and hence potentially profitability. This paper investigates whether airline customer service impacts upon the profitability of airlines (the top 150 worldwide). As our results suggest that this impact is limited, we then apply 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. We further use second-stage truncated regressions and show that only the share of cabin crew (but neither fleet age nor LCC operation) has a significant impact on overall airline efficiency.
Original languageEnglish
Pages (from-to)261-275
JournalJournal of Transport Economics and Policy
Volume49
Issue number2
Publication statusPublished - 2015

Bibliographical note

This article was first published in the Journal of Transport Economics and Policy.

Keywords

  • airlines
  • customer service
  • profitability

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