Multi-period efficiency analysis of major European and Asian airports under fixed proportion technologies

Abstract

The airport production system includes non-substitutable inputs and non-transformable outputs in most cases, hence subjected to fixed proportion technologies. In this study, we proposed a combined CRITIC-FPR approach to analyze the efficiencies of major European and Asian airports. Fixed Proportion Ratio (FPR) is an efficiency analysis technique for cases where the inputs are not substitutable and the outputs are not transformable. Criteria Importance Through Inter-criteria Correlation (CRITIC) was used here to define the priority weights of each criterion in the FPR calculation and examine the heterogeneity of the airport production system. Using the proposed approach, both the individual performances of the airports and the performance differences between Europe and Asia were measured. Impacts of capacity expansion decisions on airport efficiency were also examined. Findings indicate that cargo is the most distinctive output parameter in the airport industry, while the segregation between passenger volumes of airports has been increasing since 2000. The average efficiency of Asian airports is increasing faster than their European counterparts. Finally, the large-scale investments caused dramatic decreases in airport efficiency while small-scale investments have a positive impact.