Measuring Airline Performance: An Integrated Balanced Scorecard-Based MEREC-CoCoSo Model

The assessment of company performance requires a holistic approach, encompassing both financial and non-financial metrics. Accordingly, we develop a comprehensive airline performance evaluation model utilizing the Balanced Scorecard (BSC)-based multi-criteria decision-making (MCDM) framework. Based on contingency theory, we use 30 Key Performance Indicators (KPIs) derived from the literature and develop a novel performance model by combining the BSC framework with the Method based on the Removal Effects of Criteria (MEREC) for KPI weighting and the Combined Compromise Solution (CoCoSo) for ranking. The focus on Turkish Airlines, serving as a comparative benchmark, over the period 2020-2023 reveals that while financial KPIs hold the greatest weight, non-financial KPIs have the most significant impact on performance. The lowest performance is recorded in 2020, most probably attributable to the COVID-19 pandemic, followed by a remarkable recovery in 2021. We offer a methodological contribution for managers, decision-makers, and scholars-an objective, data-driven tool to assess airline performance. Furthermore, we furnish policymakers with tangible data for more effective industrial incentives and convenient regulatory strategies. In contrast to most of the literature emphasizing financial indicators and subjective weighting approaches that might yield biased rankings, we suggest a novel integrated performance evaluation model tailored for the airline industry.