Dose Japanese LCCs’ Entry Have a Positive Effect on Airport Efficiency?

Measuring Efficiency and Productivity Using Data Envelopment Analysis

Abstract

Both positive and negative relationships between airport performance and LCCs have been reported in U.S. and Europe. The effect of LCC on airport management remains unclear, while air passenger movement has increased after LCCs’ entry. For the pourpose of investigating the relationships between airports and LCCs or inbound tourism, this paper estimate efficiency and productivity of Japanese airports administrated by central government with the data from 2010 to 2016, by using DEA and Malmquist productivity index. Moreover, factor analysis with double bootstrap procedure is conducted in the second stage regression. We find that Japanese airports have maintained a productivity growth rate of about 2.65% per year, and the increase in the LCC share of domestic market has a positive effect on airport efficiency.