Performance Efficiency Measurement of Airports: A Comparative Analysis of Airports Authority of India and Public Private Partnership

Abstract

This article describes how to improve the overall efficiency and effectiveness of the aviation sector and also to source extra funding, the Government of India has paved the way for private investors through to a Public Private Partnership (PPP) model since the 1980s. This liberalization step in the Indian aviation market has minimized the institutional barriers which have hindered the freedom and flexibility of air transport operations among private investors. Now, competition within the aviation sector has become fiercer; the Airports Authority of India (AAI) and Public Private Partnership (PPP) in Indian airports are not only providing varied services, but also attracting consumers with new infrastructure and full modern facilities. The importance of this article is because after privatization, no studies have been conducted to examine the efficiency of Indian airports by using Data Envelopment Analysis (DEA). An output-oriented DEA model is employed to determine the efficiency score of airports by taking a sample of 15 airports, including airports run by PPP, for comparison. Output-oriented DEA calculates the efficiency by maximizing the outputs for a given level of inputs. Therefore, this article contributes to the existing literature on Indian airports. Based on available data, three variables - length of runways, terminal size and number of check-in counters, are used as inputs and two variables - passenger movement and aircraft movement, are used as outputs.