The performance of European airlines in an era of liberalisation, 1991-1995

European airlines are entering a gradual period of economic liberalisation. This study aims to analyse the performance of 17 European airlines during the early stages (1991-1995) of the liberalisation process. We utilise nonparametric methodologies: Data Envelopment Analysis (DEA) and the DEA based Malmquist productivity index. DEA Windows analysis is used to capture efficiency changes over time whilst the DEA based Malmquist productivity index is used to measure the productivity change and decompose any change into efficiency and frontier shift effects. We find that results from windows analysis reveal an increasing trend in the efficiency scores for most airlines in the sample whereas Malmquist analysis show a decline in the first two periods, but some evidence of turnaround in 1993-1994, probably with the introduction of the third liberalisation package.