• Journal of the Korean Society for Aviation and Aeronautics
• /
• v.14 no.4
• /
• pp.38-47
• /
• 2006

This study analyzes the expense structure of the air transport industry, based on the cost and income data of 18 major airlines, estimates the economic effectiveness of scale and conducts comparative analysis. As for the method of analysis, Translog cost function and the Fourier flexible function were used. The result showed that big companies had the economy of scale based on the Translog cost function, while the Fourier flexible function led to a estimation that expanding the input is not recommended, for the expansion of scale entails the poor economy of scale. It can be presumed that the economy of scale was estimated according to the U shape of the Translog cost function in the given data. On the other hand, the Fourier flexible cost function approaches the unknown function, as it is a Fourier series, and correctly infers the economy of scale based on the analyzed data. As for the flag carrier's economy of scale, it was inferred that the economy of scale existed by any of two functions. Therefore, the conclusion was that further expanding the scale will not cause any problem.

• 한국항공운항학회:학술대회논문집
• /
• 2006.11a
• /
• pp.47-52
• /
• 2006