AIRPORT PERFORMANCE MEASUREMENT : REVIEW OF METHODS AND STUDIES FOR MEASURING ECONOMIC EFFICIENCY AND PRODUCTIVITY

Abstract

There has been a trend towards privatization of airports since 1987 when the British government privatized the British Airport Authority. With the rapid increase in air traffic, governments and private individuals have begun to realize the potential of airports to not only be financially independent but also generate revenues. These developments have drawn much attention to the issue of airport performance. There is a need to develop performance indicators that make inter airports comparisons possible so as to facilitate effective management of airports. This thesis reviews the existing studies on the measurement of airport economic efficiency and productivity, in order to arrive at conclusions about the appropriate methods to use for different purposes and scope of comparisons. In addition, it is recognized that indicators of efficiency and productivity need to be supplemented with indicators of quality, as there exists a trade off between these two variables. Data envelopment analysis (DEA) is used to measure the relative efficiency and productivity of three airports in the New York-New Jersey metropolitan area and Singapore's Changi International Airport. Survey results are also utilized to give an indication of the quality of service at these airports. It is found that the respective performances of these airports with different scales of operations fit in with the general trend found in studies of a larger scale. Further, it is of interest to note that Changi Airport achieved outstanding scores in terms of both efficiency and quality for terminal services, defying the general negative relationship between these two variables. Finally, the implications of effective indicators of relative performance on airport policy are analyzed and the directions of future research are also suggested.