A Southeast Asia National Aviation Company benchmarking by regret theory-based data envelopment analysis model

Abstract

National airlines play a pivotal role in fostering economic growth, facilitating trade, and promoting tourism. With Asia's aviation economic expansion and diverse cultural landscapes, the aviation industry has a role in linking nations, facilitating cultural exchange, and enhancing cross-border cooperation. In the aftermath of the global COVID-19 pandemic, the aviation industry in Asia has faced unprecedented challenges. This study aims to provide an overview of the performance of nine national airlines in the Asian aviation market, using cross-efficiency evaluation combined with the Regret theory based on the DEA model. Traditional DEA models often utilize a self-evaluation mode to evaluate DMUs, resulting in drawbacks such as overestimating efficiency and incomplete ranking. Cross-efficiency evaluation has addressed these limitations. However, cross-efficiency evaluation overlooks the significance of the irrational psychology of decision-makers (DMs). Hence, this study utilizes the Regret theory to depict the regret aversion behavior of DMs. The integration of emotional factors in assessing operational performance offers a holistic view of airlines' challenges and opportunities after the COVID-19 pandemic, ultimately facilitating informed decision-making and strategic planning for the industry's revival.