German Airport Project German Airport Project DEVELOPING MEASURES OF AIRPORT PRODUCTIVITY DEVELOPING MEASURES OF AIRPORT PRODUCTIVITY AND PERFORMANCE: AND PERFORMANCE: APPLICATION OF DATA ENVELOPE ANALYSIS APPLICATION OF DATA ENVELOPE ANALYSIS Presented by ; H.Engin Presented by ; H.Engin Duran Duran FHW-Berlin School of FHW-Berlin School of Economics Economics
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German Airport Project German Airport Project DEVELOPING MEASURES OF AIRPORT PRODUCTIVITY AND PERFORMANCE: APPLICATION OF DATA ENVELOPE ANALYSIS Presented.
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German Airport ProjectGerman Airport Project
DEVELOPING MEASURES OF AIRPORT PRODUCTIVITY DEVELOPING MEASURES OF AIRPORT PRODUCTIVITY AND PERFORMANCE:AND PERFORMANCE:
APPLICATION OF DATA ENVELOPE ANALYSISAPPLICATION OF DATA ENVELOPE ANALYSIS
Presented by ; H.Engin DuranPresented by ; H.Engin DuranFHW-Berlin School of EconomicsFHW-Berlin School of Economics
AgendaAgenda 1.DEA TUTORİAL1.DEA TUTORİAL
-- Efficiency Basics Efficiency Basics
-İnput -İnput and and Output Oriented AnalysisOutput Oriented Analysis
2. 2. APPLICATION OF DATA ENVELOPE ANALYSISAPPLICATION OF DATA ENVELOPE ANALYSIS
-DEA Results including Terminal and Airside efficiencyDEA Results including Terminal and Airside efficiency
-Tobit’s Regression Analysis
3.CONCLUSİONS
1.1.DEA TUTORIALDEA TUTORIAL
Definition of DEA Definition of DEA ( Data Envelopment ( Data Envelopment AnalysAnalysiis):s):
Data envelopment analysis (DEA) is a linear Data envelopment analysis (DEA) is a linear programming based technique for measuring programming based technique for measuring the relative performance of organisational the relative performance of organisational units where the presence of multiple inputs units where the presence of multiple inputs and outputs makes comparisons difficultand outputs makes comparisons difficult
1.DEA TUTORİAL1.DEA TUTORİAL What is efficiency?What is efficiency?
Productive efficiency refers to producing a given output by using the minimum possibleamounts of inputs, or, producing the maximum possible output using a given amount of inputs.
Difficulty of efficiency measurement in multiple input and Difficulty of efficiency measurement in multiple input and output caseoutput case
Under these circumstances, efficiency of a Under these circumstances, efficiency of a target unit can be obtained as a solution to the target unit can be obtained as a solution to the following problem:following problem:
Maximising the efficiencyMaximising the efficiency
2.APPLICATION OF DATA 2.APPLICATION OF DATA ENVELOPE ANALYSISENVELOPE ANALYSIS
DEVELOPING MEASURES OF AIRPORT DEVELOPING MEASURES OF AIRPORT PRODUCTIVITY AND PERFORMANCE:PRODUCTIVITY AND PERFORMANCE:
APPLICATION OF DATA ENVELOPEAPPLICATION OF DATA ENVELOPE
ANALYSISANALYSIS
David Gillen & Ashish Lall
2.APPLICATION OF DATA 2.APPLICATION OF DATA ENVELOPE ANALYSISENVELOPE ANALYSIS
DATA AND METHODOLOGY
Type of DataType of Data Number of Airports ; (21 all from USA)Number of Airports ; (21 all from USA) Information for each airport was assembled for
the period 1989-1993. 114 observations organized
2.APPLICATION OF DATA 2.APPLICATION OF DATA ENVELOPE ANALYSISENVELOPE ANALYSIS
DATA AND METHODOLOGY
Two Types of analysis to be held;
1. DEA and relative efficiency approach Terminal Efficiency Analysis Movement Efficiency Analysis
2. Tobit’s Regression Analysis
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSISDEA and relative efficiency approach
Terminal Efficiency Analysis
Outputs: Number of passengers, Pounds of cargo
İnputs: Number of runways number of gates, terminal area, number of employees, number of baggage collection belts and number of public parking spots.
Movement Efficiency Analysis
Outputs:Air carrier movements, commuter movements
Inputs:airport area, number of runways, runway area
and number of employees
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSISDEA Results including Terminal and Airside efficiencyDEA Results including Terminal and Airside efficiency
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSISDEA Results including Terminal and Airside efficiencyDEA Results including Terminal and Airside efficiency
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSISDEA Results including Terminal and Airside efficiencyDEA Results including Terminal and Airside efficiency
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSISDEA Results including Terminal and Airside efficiencyDEA Results including Terminal and Airside efficiency
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSISDEA Results including Terminal and Airside efficiencyDEA Results including Terminal and Airside efficiency
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSISDEA Results including Terminal and Airside efficiencyDEA Results including Terminal and Airside efficiency
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSISDEA Results including Terminal and Airside efficiencyDEA Results including Terminal and Airside efficiency
Interpretations regarding efficiency measurements; In the majority of cases the index is falling implying an increase in
efficiency ,basically can be explained by a reflect in part the emergence from the recession in the late 1980's.
Anchorage shows an increase in inefficiency for terminals but a reduction in inefficiency for movements reduction in passengers due to long haul jets being able to bypass this technical stop
The hub airports exhibit some loose similarities;As hubbing rises the terminal efficiency improves but movements efficiency decreases most likely due to the feed from small commuter aircrafts
Terminals whıch are doing better reflect new and expanding hub operations,traffic and economic growth (e.g. San Diego).
Those doing the same are well established hub airports.
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSIS
Tobit’s Regression Analysis Methodology;Set of Data;Methodology;Set of Data;
4 set of Data is used;4 set of Data is used;
İndependent variables; İndependent variables; dummy variables for the time period, dummy variables for hub airports,noise strategy variables and management operational and investment variables.
Dependent Variables;Log of efficiency Index of movements,close to zero means more efficient .
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSIS
Tobit’s Regression Analysis
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSIS
Tobit’s Regression Analysis Results and Interpretations regarding Tobit’s Regression for Results and Interpretations regarding Tobit’s Regression for
Movements:Movements:
The time dummies are not significant so there is no apparent trend in the data or anomalies in one year or another
The hub dummies show clearly that primary hubs increase the efficient use of the airside.The former hubs have a large number of feeder flights hence increasing the level of efficiency
Using a preferential flight path or limiting the hours of operation reduces inefficiency while all the remaining noise management strategies tend to increase inefficiency.
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSIS
Tobit’s Regression Analysis
Results and Interpretations regarding Tobit’s Regression for Results and Interpretations regarding Tobit’s Regression for Movements:Movements:
Limiting the hours an airport leads reducing inefficiency due to given limitations utilizes efficiency of airports ,Increasing the number of boarding gates can increase airside efficiency while increasing the number of runways has no impact
Financing strategy of airport leads to change in efficiency. Airports that have residual financing have a higher level of efficiency. Under residual financing the airlines are at risk for revenue shortfalls, thıs brings pressure to bear on the airport to ensure greater efficiency on the airside.
The preferred noise management strategy is to in fact limit operating hours and to use preferential flight paths would increase efficiency
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSIS
Tobit’s Regression Analysis
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSIS
Tobit’s Regression Analysis Results and Interpretations regarding Tobit’s Regression for terminal:Results and Interpretations regarding Tobit’s Regression for terminal:
Terminals at airports that are hubs operate at a higher level of efficiency than non-hubs.
The way in which gates are managed has an impact on efficiency. The greater the proportion of common and exclusive use gates the greater the reduction in inefficiency.In Common use of gates airports playing major role and take care for maximising efficiency at the mean time İn exclusive use of gates carriers do take care about efficiency
As the proportion of preferential use gates rises we get the opposite result; efficiency falls. A carrier which has preferential treatment may try to use gates as a barrier to entry and not necessarily use them efficiently
2.APPLICATION OF DATA ENVELOPE ANALYSIS2.APPLICATION OF DATA ENVELOPE ANALYSIS
Tobit’s Regression Analysis
Results and Interpretations regarding Tobit’s Regression for Results and Interpretations regarding Tobit’s Regression for terminal:terminal:
Having greater proportions of international passengers is one strategy which has a marked impact on improving terminal efficiency.
Adding gates is also effective but how one manages those gates is also important
Bigger terminals are not the solution to improving efficiency but allowing greater access to aircraft and passengers with greater numbers of gates will.
ConclusionConclusion
In the majority of cases the index is falling implying an increase in efficiency (or reduction in inefficiency). This can reflect in
part the emergence from the recession in the late 1980's.
The best thing airport management is to improve efficiency is create pressures of productive and dynamic efficiency through corportization or privatization: 'residual financing' variable.
ConclusionConclusion
The productivity improvement is a combination of external market forces as well as internal firm reorganization and changing management incentives - intra-firm market forces
Most important items ;
Airside Efficiency Having hubs ,
Expanding Gate Capacity Expanding Gate Capacity
Market DisciplineMarket Discipline
Movement Efficiency Expanding number of Movement Efficiency Expanding number of gates in forms of common or exclusive but not preferantialgates in forms of common or exclusive but not preferantial
Conclusion Conclusion
Is Carrying out such similar project possible Is Carrying out such similar project possible for German Airports ?for German Airports ?
-Possible but difficulties exist;-Possible but difficulties exist;
Low number of international AirportsLow number of international Airports
Lack of sufficient useful dataLack of sufficient useful data