Assessing Efficiency of European Airports

Abstract

Given the rapid trends toward privatization and a commercial orientation, it is becoming more important than ever to investigate alternate approaches to assess the efficiency of airports. The main objective of this article is to evaluate the efficiency of European airports using a total factor productivity (TFP) approach. The second objective of this research is to investigate the relationship between the proposed TFP index and several partial measures of airport productivity. The results demonstrate the problems inherent in using partial measures in evaluating airport productivity and confirm the importance of using overall measures such as TFP. The study further suggests that revenue per workload unit and employee productivity are the key determinants of overall efficiency of an airport.