Evaluating Airline Service Quality by Data Envelopment Analysis

Data envelopment analysis (DEA) is used to evaluate the service quality of airlines. Although DEA can handle more, four quality factors available from the Air Travel Consumer Report, maintained by the U.S. Department of Transportation (USDOT), are the focus: fractions of flights that were on time, passengers with reservations who were denied boarding, passengers who reported mishandled baggage, and passengers who filed complaints with USDOT. Instead of relying on weights established by surveying the opinions of industry experts and frequent flyers, DEA uses an optimization technique to evaluate the service quality of each airline relative to others. To illustrate, data from Calendar Years 2000 to 2006 were used to compute the monthly service qualities of domestic airlines. Results from these data suggest that DEA rankings are similar to those based on the airline quality rating. The latter appeared in the media for more than a decade.