Title

The relationship between operational efficiency and customer service: a global study of thirty-eight large international airlines

Document Type

Article

Publication Date

Summer 2004

Abstract

This study examined the relationship between the strategic focus of airline customer service activities and operational efficiency. The empirical investigation employed data for thirty-eight airlines for fiscal year 2000—the last full year before the events of September 11, 2001. This sample was global in nature and included large international carriers, with nine from North America, ten from Europe, six from Latin America, twelve from Asia, and one from the Middle East. Operational efficiency was measured by means of data envelopment analysis, using the input-oriented model specified by Ali and Seiford, an approach used in related studies and much akin to that of Charnes et al. Efficiency measures were related to strategically focused expenditures on operations, passenger services, and ticketing, promotion, and sales by means of a tobit analysis. The results of the tobit analysis suggested that focused expenditures on operations and passenger services had a negative impact on operational efficiency. At the same time, focused expenditures on ticketing, sales, and promotion had a positive impact on operational efficiency. The implications of these results are discussed within the context of a value-based approach to customer service in the new operating environment of global airlines.

Comments

Copyright 2004 Penn State University/American Society of Transportation and Logistics

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Publication Title

Transportation Journal

Published Citation

Scheraga, Carl A. "The relationship between operational efficiency and customer service: a global study of thirty-eight large international airlines." Transportation Journal (Summer 2004):43(3), 48-58.