Contents lists available at ScienceDirect Journal of Air Transport Management journal homepage: www.elsevier.com/locate/jairtraman A comparative efciency and productivity analysis: Implication to airlines located in Central and South-East Europe Jovana Kuljanin a,∗ , Milica Kalić a , Leonardo Caggiani b , Michele Ottomanelli b a University of Belgrade – Faculty of Transport and Traffic Engineering, Vojvode Stepe 305, 11 000, Belgrade, Serbia b Polytechnic University of Bari, Via Edoardo Orabona 4, 70126, Bari, Italy ARTICLEINFO Keywords: Airline efciency Central and South-East European airlines Fuzzy theory Based DEA method Malmquist index ABSTRACT The purpose of the paper is to analyze performance of major carriers across Europe, with particular focus on those operating in Central and South East Europe. With the ultimate aim of becoming fully integrated into the European Union aviation market, these airlines underwent signifcant transformations in the last two decades. The study utilizes the Fuzzy Theory-based Data Envelopment Analysis to evaluate efciency of the airlines since some of the indices (e.g. punctuality) could be subject to imprecise measurement. The set of airlines contains several major airlines operating in Western, Central and South-East Europe in 2008 and 2012, the years that coincide with the economic crisis and overall fnancial recovery. The results of the model indicate that Central and South-East European carriers tend to be less efcient in comparison to Western counterparts over the period observed, but their overall efciency has generally improved based on the Malmquist index. Moreover, based on the calculation of the Malmquist index one can reveal that despite the fact that most of the Central and South- East Europe airlines succeeded to increase their technical efciency through adoption of new technologies, they still remained out of the efcient frontier. 1. Introduction The airline industry has become an extensively competitive en- vironment imposing a burden of challenges to its players requiring adoption of radical changes in order to survive. Deregulation of the aviation market in the United States in 1977 triggered a wave of reg- ulatory changes across the world, serving as a good example particu- larly to Europe and Australia. In such new environment, almost all state-owned European airlines have been either partially or fully pri- vatized (Barbot et al., 2008), which induced ferce competition among them. In addition to the well-established airlines, the emergence of low- cost business model has permanently altered the landscape of the bat- tlefeld by ofering air fares signifcantly lower than those ofered by incumbent carriers. Airline proftability was further damaged in the aftermath of the terrorist attack of September 11, 2001 and the world fnancial crisis of 2008 thus bringing a vast number of carriers to the edge of bankruptcy. As reported in Zacks Equity Research (2011), the airline industry lost $16 billion in 2008 and $9.9 billion in 2009, the periods that coincided with skyrocketing oil prices and severe world- wide recession. In order to survive the new market conditions, many international fag carriers across Europe chose to consolidate their operations and created economies of scale through Mergers and Acquisitions (M&A) (Min and Joo, 2016). On the other hand, a vast number of them decided to avoid the risk of possible M&A failures, and have instead joined some of the global airline alliances or simply cooperated through code-share agreements. Among airlines in Europe, the airlines that persisted in post-socialist countries located in Central (CE) and South-East Europe (SEE) were severely hit by these events as they had to adjust their business models to the new market conditions, already bearing the heavy burden of their historical and political heritage. Moreover, there is ample evidence that these carriers have exerted the characteristics of “permanently failing organization” (Akbar et al., 2014) that adversely afected their performance and deteriorated their ability to accom- modate to the new market rules. Bearing in mind that these airlines have not been in the focus of the relevant literature, investigation of their performance has become the particular challenge of this research. The paper contributes to the current literature by providing a com- parison of efciency between these carriers and their well-established counterparts in the rest of Europe. This becomes of vital importance as it enables a carrier to position itself against the rivals and to detect the roots of its inefciency. https://doi.org/10.1016/j.jairtraman.2019.01.009 ∗ Corresponding author. E-mail addresses: j.kuljanin@sf.bg.ac.rs (J. Kuljanin), m.kalic@sf.bg.ac.rs (M. Kalić), leonardo.caggiani@poliba.it (L. Caggiani), michele.ottomanelli@poliba.it (M. Ottomanelli). Journal of Air Transport Management xxx (xxxx) xxx–xxx 0969-6997/ © 2019 Elsevier Ltd. All rights reserved. Please cite this article as: Kuljanin, J., Journal of Air Transport Management, https://doi.org/10.1016/j.jairtraman.2019.01.009