An evaluation of the world's major airlines' technical and environmental performance

In this empirical study, we apply bootstrapped data envelopment analysis (DEA) models under variable returns to scale to examine both the environmental and technical efficiencies of airlines. Using the regional classification of the International Air Transport Association (IATA), we chose 48 of the world's major full-service and low-cost carriers from six different regions, and then estimated their performance over the period 2007-2010. Our empirical results show that many of the most technically efficient airlines are from China and North Asia, whilst many of the best environmental performers are from Europe. We also found that although the number of environmentally oriented full-service carriers is increasing, low-cost carriers are still more environmentally oriented. Our findings show that almost all the low-cost carriers are technically operating under increasing returns to scale in all the studied years. However, this result was quite the opposite of what we found for the largest airlines.