Evaluating air route performance with context-dependent data envelopment analysis: A case study in Taiwan

Abstract

The aviation industry has a key role in international trade activities. Most studies measure aviation performance based on airlines or airports. However, the frontline operation is delivered via air routes and more operating characteristics can be revealed with route-based performance evaluation. Further, the traditional data envelopment analysis (DEA) approach cannot rank performance in a particular context which represents an efficiency frontier built by decision making units (DMUs). Therefore, this study uses a context-dependent DEA approach to measure and rank the performance of air routes with a case study of 112 international routes from two airlines in Taiwan. Model results identify eight performance levels with most air routes at efficiency performance level 2 and level 3 and most route destinations in East Asia (e.g., Japan). The results of this study can inform operators about a clear relationship between performance and potential markets as well as improvement strategies.