Measuring the Technical Efficiency of Ahmedabad Airport Using Data Envelopment Analysis

Parnika Jha Asst. Professor, SKPIMCS, Gandhinagar, Gujarat parnikajha@gmail.com Dr. Chinnam Reddy Director - MBA, MEFGI Rajkot, Gujarat screddy07@gmail.com

Ahmedabad airport, officially known as Sardar Vallabhbhai Patel International Airport, is considered the seventh busiest airport in India. On an average 100 aircraft movements are operated daily.

DEA is a deterministic non parametric approach used to build a benchmark, best practice frontier, based on available information. The method was first developed by Farrel (1957) and later consolidated by Charnes et al (1978). One of the main advantages of this approach is that it takes into account the multioutput multi-input dimensionality of production. Another advantage is that computations are based exclusively on measures of physical outputs and inputs, without the need of using prices, which are neither available nor are comparable, mainly at the international level. Guillen and Lall (1997) pioneered the use of Data Envelopment Analysis techniques to study efficiency in the airport sector. This study estimates the efficiency index of the Ahmedabad Airport utilizing monthly data (March 2007 through July 2011) of international and domestic traffic of aircraft's, passengers & cargo movements. The study compares the Ahmedabad Airport technical efficiency index with the efficiency indexes of some selected domestic airports of India in 2007-08. The study uses data envelopment analysis for working out the technical efficiency using data on aircraft movements (output of the airport) and passenger movements and cargo traffic ( both inputs to aircraft movements) .The airport production frontier at each point in time is constructed using deterministic, nonparametric (mathematical programming) methods(essentially, finding the smallest convex cone enveloping the data) and efficiency is measured as the (output-based) distance from the frontier. Keywords: Technical efficiency, Data envelopment Analysis, aircraft movement, cargo traffic