Estimating airport efficiency of New Zealand airports

• We investigated the efficiency and productivity changes of New Zealand airports.
• Most airports increased their efficiencies and improved productivity.
• Airports should decrease scale of operations to achieve their most productive size.
• Four factors could explain variations in airport efficiency.

New Zealand's airport industry has experienced substantial growth over recent years, but few studies have analysed the operational efficiency of New Zealand airports. This paper aims to extend the study of Francis and Lyon (2007) by exploring the efficiency and productivity changes of New Zealand's major airports between 2010 and 2012, using slacks-based measure (SBM) model and the Malmquist productivity index (MPI). The findings suggested that the majority of New Zealand airports increased efficiency and productivity during the period under investigation, but should decrease scale of operations in order to operate at their most productive size. Decomposition of the MPI showed that most New Zealand airports experienced gains in efficiency but, in terms of technology, they have regressed. Four significant factors (i.e. airport hub status, airport operating hours, airport ownership, and the Rugby World Cup 2011) were identified by the Simar–Wilson bootstrapping regression analysis as explaining variations in airport efficiency. Importantly, the significant effect of the Rugby World Cup 2011 (a major sport tournament) on New Zealand's air transport demand and airports' efficiency has been demonstrated in this research.