Efficiency and ranking of operating no-frill airlines in Eastern India: An application of data envelopment analysis (DEA)

Abstract

The operating no-frill airlines in eastern India are experiencing poor load factors, low yield and unhealthy financial condition due to some reasons. To overcome the situation, airlines need to have strategies to effect turnaround of the airlines. This can be achieved only if airlines come to know their performance efficiency gap with benchmarked airlines. To investigate the efficiency of operating no-frill airlines (LCCs) in eastern India, publicly available data of various parameters related to the technical and financial health of these airlines were collected. Attempts were made to study the technical efficiency, by relating to the use input and output variables. The Data Envelopment Analysis (DEA) was employed to estimate the technical efficiency of these. Efficiency of each no-frill airline in comparison with other no-frill airlines was estimated. Then Super Efficiency Model was applied on most efficient airlines. The research also has identified the rank of performance of no-frill airlines which helps to understand the technical efficiency and performance of operating no-frill airlines in eastern India. This gave a clear idea regarding performance of different no-frill airlines for the stipulated time horizon.