A Review of Different Benchmarking Methods in the Context of Regional Airports

Abstract

This paper reviews the existing literature on airport benchmarking. In addition to assessing the advantages and disadvantages of partial productivity measures (PPM), we also discuss parametric and non-parametric methods with reference to previous applications to the airport sector. Our analytical framework for research synthesis is based on a comparative study of the existing research findings and includes not only results from longitudinal, cross-sectional and panel data analyses but also findings of our own two-stage data envelopment analysis (DEA) case study. Our findings suggest that the more sophisticated approaches can deliver powerful insights into the performance of regional airports. The data for such an analysis are available, yet no previous attempt has been made to apply these methods to the context of regional airports. However, challenges do exist, especially for very small airports, in terms of the reliability, quality, robustness and complexity of such an efficiency analysis. As a result we recommend that an appropriate methodology for comparing the efficiency of regional airports should be based on a combination of PPM with either a two-stage DEA or a stochastic frontier approach approach.

Acknowledgements

The authors gratefully acknowledge the comments of Martin Dresner, David Hensher and Knut Fuglum, Eigil Ulvin Olsen (both Avinor) as well as the contributions of Nigel Halpern and Jan Husdal to an earlier version of this paper. The financial support of University of Sydney Business School fellowship that enabled the first author to spend two months at ITLS Sydney in 2011 is also greatly appreciated.