Production and Marketing Efficiencies of the U.S. Airline Industry: A Two-Stage Network DEA Approach

  • Wen-Min Lu
  • Shiu-Wan Hung
  • Qian Long Kweh
  • Wei-Kang Wang
  • En-Tzu Lu
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 208)


This chapter presents an application of a two-stage network data envelopment analysis (DEA) for examining the performance of 30 U.S. airline companies. The airline industry is a subject of concern because the industry is a major contributor to a country’s or even global economic development. Although a number of studies have explored airline performance using DEA, relatively few studies have applied a two-stage DEA model. The current chapter examines production efficiency and marketing efficiency through an additive two-stage network DEA model. This approach allows the black-box of the performance measurement process to be assessed, thus, providing a new direction in measuring airline performance. The chapter includes a managerial decision-making matrix and makes suggestions to help airline managers improve performance for airlines. In addition, a regression analysis of the effect of corporate governance mechanisms on airlines performance is conducted. Given the volatility of growth in the airline industry, it is expected that we will see more research related to performance management in the industry.


Two-stage data envelopment analysis (DEA) Truncated regression Corporate governance Managerial decision-making matrix 


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Wen-Min Lu
    • 1
  • Shiu-Wan Hung
    • 2
  • Qian Long Kweh
    • 3
  • Wei-Kang Wang
    • 4
  • En-Tzu Lu
    • 4
  1. 1.Department of Financial ManagementNational Defense UniversityBeitouTaiwan
  2. 2.Department of Business AdministrationNational Central UniversityJung-Li CityTaiwan
  3. 3.Department of AccountingCollege of Business Management and Accounting, Universiti Tenaga NasionalMuadzam ShahMalaysia
  4. 4.Department of AccountingYuan Ze UniversityChung-LiTaiwan

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