Technical Efficiency Analysis of Major Indian Airports

Abstract

Development of transportation especially air transports generates huge potential for any economy. Spatial activities of airports is important for overall development airport infrastructure of the country and technical productivity. Many studies focus mainly on efficiency of national airports with international benchmark. Data Envelopment Analysis (DEA) is a non-parametric study widely used for efficiency evaluation. This paper describe evaluation of technical, scale operational efficiency of twenty major Indian airports using DEA techniques.  

Method of calculation of DEA elaborated in methodology section. Data Envelopment Analysis (DEA) is a frontier technique that measure efficiency of organizations. It helps in developing Malmquist Productivity Index (MPI). DEA based MPI is a significant index for evaluation of the performance of airports as decision-making unit in aviation sector. The input variables are average expenditure, airport site area, runways and parking bays number. Average passenger, average revenue, average aircraft movements (flight movements) and freights used as output variables. MPI productivity index further deconstructed into scale effects, efficiency effects and technical change.

Results based on DEA based MPI shows overall increasing efficiency for ten major airports, decreasing efficiency for eight airports and constant efficiency for two airports. This non-parametric efficiency measure proves a trade-off between management performance and magnitude of technical change.

The outcome will support the decision to model spatial activities and take managerial decisions in fixing targets & benchmarking the airports, in making policy decision on denationalization and implementation of technical change to enhance airport performance.