oa Journal of Transport and Supply Chain Management - A liberalised South African airline industry : measuring airline total-factor productivity
The liberalisation of the South African airline industry through economic deregulation established competitive domestic and international markets. Sustainability of air transport, subject to these liberalisation effects, depends on efficient management information such as total-factor productivity, which necessitates comprehensive financial and operational information. Total-factor productivity in general, however, is not utilised by airlines as a key performance indicator since the measuring thereof is complex and regarded as tedious. Changes in air transport total-factor productivity can be measured in two ways. First, an index approach can be adopted that shows the proportional change in the inputs in relation to a proportional change in output. Secondly, a production function can be determined (econometric approach) that shows a change of productivity as a shift in the production curve. The research on which the article is based, exploited the theory, selection and application of an appropriate approach to determine changes of total-factor productivity of an individual airline to assist / support efficient decision-making by management.
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