Evaluating airline efficiency: An application of Virtual Frontier Network SBM

•A new theoretical framework of airline efficiency is built.•A Virtual Frontier Network SBM is proposed.•The efficiencies of 22 airlines from 2008 to 2012 are evaluated.

In this paper, airline efficiency is divided into three stages: Operations Stage, Services Stage and Sales Stage. The new three-stage strategic operating framework of airline efficiency is a modification of existing models. A new model, Virtual Frontier Network SBM, is proposed to evaluate the efficiency of 22 international airlines from 2008 to 2012. The results demonstrate the following: 1. The new model can apply to a new benchmarking airline such as Scandinavian Airlines. 2. Although passenger traffic, cargo traffic and revenue decreased from 2008 to 2009, most airlines’ overall efficiency increased in the period.