Journal of Air Transportation, Vol. 10, No. 1 (2005). Sorenson Best Paper Award Recipient. A Total Factor Productivity Based Structure For Tactical Cluster Assessment: Empirical Investigation in the Airline Industry

摘要

In this paper we analyze and assess the efficiency of the United States (U.S.) airline industry through the total factor productivity (TFP) method. While airlines use various resources to produce a heterogeneous group of outputs, this article focuses on certain fundamental outputs as final products of selected airlines. The results from this analysis indicate that the national airlines (U.S. domestic carriers) have higher TFP as compared to the major airlines. While major airlines have drastically cut costs in the past few years, they also need to improve efficiency or risk going out of business. In this paper, we investigate the efficiency and productivity of a selection of U.S. airlines for the years 1996 through 2001. These years have been chosen as a good example of years in which the industry experienced normal growth and generally positively returns. Subsequent to 2001 the industry experienced two severe external shocks, namely, the September 11, 2001, terrorist attacks and the Iraq war. These anomalous shocks make the years after 2001 inconsistent with respect to the type of index developed in this article.