Abstract: The TFP, meta-frontier efficiency, group efficiency and technical gap of 16 China's airlines during 2008—2010 are analyzed. The results show that technical progress is becoming the main source of efficiency improvement. The efficiency of three big airlines is going up fast, while that of private airlines is improving slowly. The private airlines have advantages in organization and management which represent the technical frontier, while the local airlines need to improve their management. The technical level of the big-three airlines, however, is far from the frontier. The main sources of airlines inefficiency are overstaffing and over-capacity. Reducing the slack is becoming the main measure of improving airlines' efficiency.