Environmentally Sustainable Air Transport: A Focus on Airline Productivity

Tackling air transport’s environmental externalities represents one of the key challenges facing the industry. Airlines, airport operators, aircraft manufacturers, air navigation service providers, and regulators are increasingly coming to the realization that environmental impacts are key constraints on growth, and that sound environmental and commercial business practices are not necessarily mutually exclusive. Like many other sectors, the framing of environmental protection measures in air transport is generally couched in terms of conforming to the guiding principles of sustainability, which is the long-held idea of policies balancing environmental, social, and economic priorities in a way that meets the needs of present-day societies without jeopardizing the ability of future societies to do likewise. Sustainable practices are considered to be those that reduce or limit the environmental impacts of a process or practice, while at the same time creating financial benefits and social opportunities. Collectively, these aspects of sustainability are known as the ‘triple bottom line’ (see Fig. 1). While the environmental impacts of aviation have long been understood (see Lee et al. 2009), political debates surrounding aviation’s impact on the environment remain contested and contentious. Such debates are relevant in a global context due largely to the significant predicted near-to-medium-term growth in the global air transport market and the knock-on impacts this will have in terms of the environment. ICAO (International Civil Aviation Organization) forecasts a near tripling of the global commercial aircraft fleet, rising from just under 20,000 aircraft in 2010 to 56,500 in 2040, with accompanying increases in the passenger and air cargo markets (ICAO 2016). Concurrently, international aviation CO2 emissions are forecasted to grow, under the ‘baseline growth scenario including fleet renewal, from around 500 Mt in 2010 to nearly 2000 Mt in 2040’ (ICAO 2016). Our work aims to build on this important area of research by estimating the trend in airline productivity when considering both the economic and environmental aspects of air transport. We apply a data envelopment analysis based on the productivity index to estimate the economic evolution of the major global airlines. More precisely, we adopt a biennial Malmquist–Luenberger index (BML), which is an indicator of productivity that changes over time.