Is it the labor unions’ fault? Dissecting the causes of the impaired technical efficiencies of the legacy carriers in the United States

Greer, Mark R.

doi:10.1016/j.tra.2009.07.007

Cited by 24 publications

(20 citation statements)

References 17 publications

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“…Other papers (e.g. (Scheraga, 2004;Greer, 2009)) only focus on how effectively airlines reduce costs, using cost reduction as the primary method of assessing airline efficiency. This approach is also inappropriate, as maximizing net income, rather than simply reducing costs, tends to be the primary interest of the commercial airline industry (Airlines for America, 2013;Cento, 2009).…”

Section: Literature Surveymentioning

confidence: 99%

Efficiency of US airlines: A strategic operating model

Mallikarjun

2015

Journal of Air Transport Management

121

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Section: Literature Surveymentioning

confidence: 99%

Efficiency of US airlines: A strategic operating model

Mallikarjun

2015

Journal of Air Transport Management

121

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“…They find mixed results for the presence of unions, in that they are shown to increase efficiency, but to reduce technical progress. The most relevant paper in the field of non-parametric technical efficiency analysis is Greer (2009), who focuses on the air transportation sector. After estimating efficiency via DEA, he runs a Tobit regression to analyze the determinants of technical efficiency.…”

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confidence: 99%

Technical efficiency, unions and decentralized labor contracts

Devicienti

Manello

Vannoni

2017

European Journal of Operational Research

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This paper explores the link between the presence of unions in the workplace, the adoption of decentralized labor agreements and technical efficiency, using a relatively new methodology and a large sample of Italian manufacturing firms. We apply the Data Envelopment Analysis, and its robust version based on bootstrap theory, to get reliable estimates of technical efficiency at the firm level in a standard first stage. We devote particular attention to the specific technology adopted, by distinguishing 20 different sector frontiers, as well as to the presence of outliers. The obtained efficiency scores are analyzed in a second stage applying a truncated regression model estimated via Maximum Likelihood, following the Simar and Wilson (2007) methodology. Our results highlight that the presence of workplace unionization decreases the level of technical efficiency, while other aspects limiting unions' power such as a strong exposure to international markets, high debt levels or the prevalence of flexible assets partially reduce the union negative effect. However, when firms adopt decentralized labor contracts agreements, the effect on efficiency is positive and partially compensates the unions' effect. The results are robust to the inclusion of many firm characteristics over which managers have no direct control and to different model specifications.

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“…The research by Greer (2009) examined the technical efficiencies of US airlines with the application of DEA too. Greer transformed inputs such as fuel, fleet-wide seating capacity and labor into ASK.…”

Section: Literature Reviewmentioning

confidence: 99%

Productivity and efficiency modeling amongst ASEAN-5 airline industries

Ling¹,

Kokkiang²,

Gharleghi³

et al. 2018

Int. j. adv. appl. sci.

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This study intends to benchmark the technical efficiency and the productivity change measurement of the five national airlines in ASEAN-5 countries via Data Envelopment Analysis (DEA) and a DEA-based Malmquist Total Factor Productivity (TFP) Index approach. DEA approach uses a balanced panel data extracted from the annual report of Garuda Indonesia, Malaysia Airlines, Philippine Airlines, Singapore Airlines and Thai Airways International, covering the period of 2007 to 2013. The Tobit model is used to investigate the effect of input variables (Available Seat Kilometer (ASK) and Operating Cost) and output variables (Revenue Passenger Kilometer (RPK) and Passenger Revenue) on the efficiency scores computed by DEA. The efficiency scores of ASEAN-5 airlines computed by DEA shows that Malaysian Airlines is the least efficient airline and Philippines Airlines is the airline with the best efficiency. The result of Malmquist TFP approach reveals that there is a 1.2 percent improvement in technical efficiency, 1.2 percent deterioration in technology, 0.7 percent progression in pure technical efficiency, 0.5 percent increase in scale efficiency and a 0.1 percent decline in TFP in the airline industry in ASEAN-5 throughout the entire study period. The Malmquist TFP approach also reports that the change in TFP was mainly due to the deterioration of technology. The empirical results obtained from Tobit analysis suggest that the ASK has a significant negative impact on efficiency score, whereas both RPK and Passenger Revenue are found to have a significant positive effect on efficiency. Operating cost is the only variable that is found to have no significant impact on efficiency score.

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Is it the labor unions’ fault? Dissecting the causes of the impaired technical efficiencies of the legacy carriers in the United States

Cited by 24 publications

References 17 publications

Efficiency of US airlines: A strategic operating model

Efficiency of US airlines: A strategic operating model

Technical efficiency, unions and decentralized labor contracts

Productivity and efficiency modeling amongst ASEAN-5 airline industries

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