The purpose of this paper is to measure the efficiency of UK airlines in light of all the recent industry challenges.
The study measured the technical efficiency of airlines through the innovative data envelopment analysis (DEA) bootstrap methodology.
Results based on a sample of recent input/output data indicated that the efficiency of UK airlines has continuously declined since 2004 to reach a value of 73.39 per cent in 2007. Factors which were found to be significantly and positively related to technical efficiency variations include airline size and load factor. The paper also highlights that factors such as increase in oil price and fierce market competition were also potential inefficiency determinants.
The findings of this paper provide a fresh link between airline performance and the current industry characteristics. UK airlines also have a major role in the European and international aviation sector, and thus a reflection on their efficiency could be of interest to private and public policy makers.
The paper focuses on a recent period and thus provide a fresh efficiency assessment of the airline industry. The study also extends the limited literature available on UK airlines.
