Proceedings of 3rd Asia-Pacific Business Research Conference 25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1 A Critical Review of Literature on Performance of Airlines Muhammad Asraf Abdullah  , Dr. Susila Munisamy  and Dr. Nurulhuda Mohd Satar *** This paper analyses, evaluates, and synthesizes both theoretical and empirical works on airlines’ performance across regions in the world from 1983 to 2012. The focus of this survey lingers around scholarly literatures pertaining to current controversies in airline’s performance including technical efficiency, allocative efficiency as confined in seminal work of Farrell (1957) and productivity. Due to inconsistency of issues focused in past papers pertaining to this area of study, this paper addresses the issues thematically and not in a chronological manner. Above all, technical efficiency is the most popular issue well discussed in the study of performance in the airline business. Among fresh issue yet little coverage in literatures over the last decades is outsourcing practice. Topics related to business model, ownership, and corporate governance are contemporary in nature as they invite mounting debates recently. Moving on to issue of liberalization from the aspects of deregulation, open skies policy and alliances- is a perennial subject in performance study which have impressed many scholars in the 1990s and 2000s. Other issue which has drawn greater attention from academics and practitioners in the aviation industry is labour union which has invited many discussions recently. Issues on allocative efficiency and productivity are not less important in literatures as it have attracted researchers’ attention since 1980s. In general, views on airlines’ performance have been sprawling around multifaceted topics including management, institution and organizational structure. JEL Codes: D24, L25, L93 1. Introduction This paper surveys scientific thought on issues in airlines‟ performance across regions from 1983 to 2012. The focus of scholarly works since the deregulation of the U.S. airline industry in 1978 has constantly aimed at benchmarking airlines from the aspects of efficiency and productivity. Since then, dozens of research in airlines are centered on how airlines promote efficiency and productivity amidst the rising competition sparked by moves for liberalization in the air transport industry in both the United States and the European Union. The importance of the subject matter in research has substantially increased after terrorist attacks at the World Trade Center on September 11, 2001 which has adversely effected the financial positions of airlines across a number of regions in the world.  Muhammad Asraf Abdullah, Department of Economics, Faculty of Economics and Administration, University of Malaya. Email: asraf_74@yahoo.com  Associate Professor Dr. Susila Munisamy, Department of Applied Statistics, Faculty of Economics and Administration, University of Malaya. Email: susila@um.edu.my *** Dr. Nurulhuda Mohd Satar, Department of Economics, Faculty of Economics and Administration, University of Malaya. Email: nurulhuda@um.edu.my