Financial Performance Of
Air Transport Companies:
An Analysis Of The Non-Pareto-efficient Space In
Data Envelopment Analysis
Author(s)
E. Fernandes, H. M. Pires, M. P. E. Lins & A. C. M. Silva
Abstract
This paper studies the financial performance of public air transport companies.
Data envelopment analysis (DEA) is applied to three dimensions: financial
variables related to capital structure (financial leverage) as input, and firm size
and tangible assets as outputs. A discussion between the classical DEA method
of variable return of scale and the Russel efficiency is developed in cases where
the decision making unit (DMU) lies in non-Pareto-efficient space. The paper
shows the method managers may follow to correct the performance index of the
DMU, so they may make better decisions about the path to the efficiency
frontier, using both approaches, and considering the minimization of inputs and
the maximization of outputs.
Keywords: data envelopment analysis, financial performance, air transport
companies.
1 Introduction
Data envelopment analysis (DEA) is a non-parametric method aimed at
measuring the performance of firms, organizations, programs, i.e., the
performance of business units under analysis, which are usually called decision
making units (DMU). The procedure involves a mathematical technique based
on linear programming, which does not need the functional form relating inputs
and outputs to be specified. This way, DEA is not proposed to format a
Keywords
data envelopment analysis, financial performance, air transport
companies.
Related Book
Other papers in this volume
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