Comparative Analysis of Efficiency for Major Northeast Asia Airports

Abstract

Abstract Growing airport capacity constraint, airports' increasing attention to profits, and regional hub formation in Northeast Asia suggest a need to study efficiency performance of the region's major airports. This article empirically evaluates the level and change of efficiency (productivity) of Tokyo (Narita), Osaka (Kansai), Seoul (Incheon and Gimpo), Beijing Capital, Shanghai Hongqiao, Guangzhou, and Hong Kong airports. We apply data envelopment analysis (DEA) to new panel data covering the 1994-2007 time period. We find that all the sample airports have recorded an increase in productivity over the period. Given the initial low productivity level of Chinese airports, this finding suggests that a series of deregulatory measures adopted by the Chinese government may have worked in improving airport productivity. On the other hand, no sample airports have experienced consistent growth in productivity. To improve productivity, the airports in Northeast Asia need not only technological revolutions at the industry level, but also technical improvements, such as better airport management, operations, and investment, at an airport level. Alternatively, the region may need to adopt more aggressive liberalization measures to stimulate further traffic growth. A number of future research areas are also discussed.