Evaluating energy efficiency for airlines: An application of Virtual Frontier Dynamic Slacks Based Measure

The fast growing Revenue Passenger Kilometers and the relatively lagged energy supply of aviation industry impels the airlines to improve energy efficiency. In this paper, we focus on evaluating and analyzing influencing factors for airline energy efficiency. Number of employees and aviation kerosene are chosen as the inputs. Revenue Ton Kilometers, Revenue Passenger Kilometers and total business income are the outputs. Capital stock is selected as the dynamic factor. A new model, Virtual Frontier Dynamic Slacks Based Measure, is proposed to calculate the energy efficiencies of 21 airlines from 2008 to 2012. We verify two important properties to manifest the advantages of the new model. Then a regression is run to analyze the influencing factors of airline energy efficiency. The main findings are: 1. The overall energy efficiency of Malaysia Airlines is the highest during 2008–2012.2. Per capita Gross Domestic Product, the average service age of fleet size and average haul distance have significant impacts on the efficiency score. 3. The difference between full-service carriers and low-cost carriers has no significant effects on airline energy efficiency.