Financial performance of air transport companies: an analysis of the non-Pareto-efficient space in data envelopment analysis

Abstract

This paper studies the financial performance of public air transport companies. Data envelopment analysis (DEA) is applied to three dimensions: financial variables related to capital structure (financial leverage) as input, and firm size and tangible assets as outputs. A discussion between the classical DEA method of variable return of scale and the Russel efficiency is developed in cases where the decision making unit (DMU) lies in non-Pareto-efficient space. The paper shows the method managers may follow to correct the performance index of the DMU, so they may make better decisions about the path to the efficiency frontier, using both approaches, and considering the minimization of inputs and the maximization of outputs.

Evaluation of Brazilian airlines nonradial efficiencies and targets using an alternative DEA approach

“…As seen, except for Fernandes et al (2008) and Chang et al (2014), the foregoing DEA-related studies about airlines efficiency grounds on radial measures. Furthermore, apart from Soares de Mello et al (2003) who combine multiobjective linear programming (MOLP) and DEA to determine a set of alternative (nonradial) targets, all the other cited works are limited to unique targets (radial or not).…”

“…As seen, except for Fernandes et al. () and Chang et al. (), the foregoing DEA‐related studies about airlines efficiency grounds on radial measures.…”

“…Then, with a managerial approach, Capobianco and Fernandes (2004) used a DEA model to evaluate the relative efficiency of capital structure in the world airline industry, including the Brazilian firms. Under a similar perspective, Fernandes et al (2008) applied a DEA model that also uses variables related to capital structure (financial leverage) as input, as well as firm size and tangible assets as outputs, to evaluate the financial performance of airlines, including the Brazilian airlines. The authors discuss the results of the classical DEA method and the Russell efficiency (nonradial) when the firm lies in non-Pareto-efficient space.…”

Identificação de benchmarks e anti-benchmarks para companhias aéreas usando modelos DEA e fronteira invertida

“…Destaque-se que são raros os estudos de eficiência em empresas aéreas. Entre as companhias brasileiras, foram encontrados três estudos sobre eficiência operacional (SOARES DE MELLO et al, 2003;ARAÚJO et al, 2006;CORREIA;SOARES DE MELLO, 2009) e outros três que usam DEA para analisar a estrutura de capital dessas empresas (FERNANDES;CAPOBIANCO, 2001;FERNANDES, 2004;FERNANDES et al, 2008). No que tange ao transporte aéreo, a ferramenta DEA é mais usada para estudar eficiências de aeroportos (FERNANDES;PACHECO, 2002;FERNANDES, 2003;GOMES, 2004;FERNANDES;SANTOS, 2006).…”