The Economic and CO2 Emissions Performance in Aviation: An Empirical Analysis of Major European Airlines

  • Chikage Miyoshi
  • Rico MerkertEmail author
Part of the Greening of Industry Networks Studies book series (GINS, volume 4)


The sustainability of aviation in global supply chains is of increasing importance to airline management and policy makers. With mounting environmental pressures and market volatilities, airlines need to find strategies for simultaneously managing their economic and environmental (emissions) performance, two objectives that can support but also contradict each other. This chapter aims to evaluate the relative performance of airlines’ carbon and cost efficiency and how this relationship has changed over time. We compute and compare the carbon efficiency of 14 major European airlines for the period of 1986–2007. As jet fuel is the most important resource in the aviation supply chain, we examine whether there is a relationship between fuel prices and carbon efficiency. We also test whether unit cost, distance flown and load factors have an impact on airline carbon efficiency. The results show that the fuel prices and their volatility have affected and improved carbon efficiency of airlines. Our findings also confirm previous anecdotal evidence suggesting a significant negative relationship between carbon efficiency and unit cost.


Carbon efficiency Fuel price Unit cost Airlines Sustainability Aviation supply chain 


  1. Agusdinata, D. B., & Delaurentis, D. A. (2011). Addressing equity issue in multi-actor policy making via a system-of-system approach: Aviation emissions reduction case study. Journal of Systems Science and Systems Engineering, 20(1), 1–24.CrossRefGoogle Scholar
  2. Albers, A., Bühne, J.-A., & Peters, H. (2009). Will the EU-ETS instigate airline network reconfigurations? Journal of Air Transport Management, 15, 1–6.CrossRefGoogle Scholar
  3. Alonso, G., Benito, A., Lonza, L., & Kousoulidou, M. (2014). Investigations on the distribution of air transport traffic and CO2 emissions within the European Union. Journal of Air Transport Management, 36, 85–93.CrossRefGoogle Scholar
  4. Association of European Airlines (AEA) (2009). Traffic, capacity and fleet data, Belgium.Google Scholar
  5. BAA London Gatwick Airport (2009). Gatwick Airport Climate Change Report, London.Google Scholar
  6. Babikian, R., Lukachko, S. P., & Waitz, I. A. (2002). The historical fuel efficiency characteristics of regional aircraft from technological, operational, and cost perspectives. Journal of Air Transport Management, 8(6), 389–400.CrossRefGoogle Scholar
  7. Bates, J., Brand, C., Davison, P., Hill, N. (2000). Economic evaluation of emissions reductions in the transport sector of the EU. AEA technology environment for DG environment. Brussels: EC.Google Scholar
  8. Boon, B., Davidson, M., Faber, J., van Velzen, A. (2007). Allocation of allowances for aviation in the EU ETS: the impact on the profitability of the aviation sector under high levels of auctioning. Final Report, Delft.Google Scholar
  9. Boyd, G. A., & Pang, J. X. (2000). Estimating the linkage between energy efficiency and productivity. Energy Policy, 28, 289–296.CrossRefGoogle Scholar
  10. Brueckner, J. K., & Zhang, A. (2010). Airline emission charges: Effects on airfares, service quality, and aircraft design. Transportation Research Part B, 44(8–9), 960–971.CrossRefGoogle Scholar
  11. Derigs, U., & Illing, S. (2013). Does EU ETS instigate air cargo network reconfiguration? A model-based analysis. European Journal of Operation Research, 225, 518–527.CrossRefGoogle Scholar
  12. Dressens, O., Anger, A., Barker, T., & Pyle, J. (2014a). Effects of decarbonising international shipping and aviation on climate mitigation and air pollution. Environmental Science and Policy, 44, 1–10.CrossRefGoogle Scholar
  13. Dressens, O., Kohler, M. O., Rogers, H. L., Jones, R. L., & Pyle, J. A. (2014b). Aviation and climate change. Transport Policy, 34, 14–20.CrossRefGoogle Scholar
  14. Eurocontrol (2007). Aircraft performance summary table for the base of aircraft data (BADA) revision 3.7, Belgium.Google Scholar
  15. European Commission (2006). Proposal for a directive of the European parliament and of the council, amending directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emissions allowance trading within the community. Brussels, Belgium.Google Scholar
  16. European Commission (2009). Amending decision 2007/589/EC as regards the inclusion of monitoring and reporting guidelines for emissions and tonne-kilometre data from aviation activities. Brussels, Belgium.Google Scholar
  17. European Commission (2013). Decision no 377/2013/EU of the European parliament and of the council of 24 April 2013 derogating temporarily from directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the community. Brussels, Belgium.Google Scholar
  18. European Commission (2014). Proposal for a decision of the European parliament and of the council concerning the establishment and operation of a market stability reserve for the union greenhouse gas emission trading scheme and amending directive 2003/87/EC. Brussels, Belgium.Google Scholar
  19. Forsyth, P. J., Dwyer, L., & Spurr, R. (2007). Climate change policies and Australian tourism: Scoping study of the economic aspects. In J. Buultjens, N. White, & S. Willacy (Eds.), Climate change and Australian tourism: A scoping study. Queensland: Sustainable Tourism CRC, Brisbane.Google Scholar
  20. Gudmundsson, S. V., & Anger, A. (2012). Global carbon dioxide emissions scenarios for aviation derived from IPCC storylines: A meta-analysis. Transportation Research Part D, 1(17), 61–65.CrossRefGoogle Scholar
  21. Halstead, J. (2008). The full-blown fuel crisis. Aviation Strategy, 129.Google Scholar
  22. Intergovernmental Panel on Climate Change (IPCC) (1999). Aviation and the global atmosphere, a special report of IPCC working groups. In Intergovernmental panel on climate change. Montreal: IPCC.Google Scholar
  23. International Civil Aviation Organisation (ICAO) (2010). Economic analysis and database, Montréal.Google Scholar
  24. International Civil Aviation Organisation (ICAO) (2014). Assembly 38th session report of the executive commitee on agenda item 17 (section on climate change) A38-WP/430.Google Scholar
  25. Ison, S., Merkert, R., & Mulley, C. (2014). Policy approaches to public transport at airports—some diverging evidence from the UK and Australia. Transport Policy, 35, 265–274.CrossRefGoogle Scholar
  26. Lee, J. J. (2010). Can we accelerate the improvement of energy efficiency in aircraft systems? Energy Conversion and Management, 51, 189–196.CrossRefGoogle Scholar
  27. Lee, J. J., Lukachko, S, P., Waitz, I, A. (2004). Aircraft and energy use. Encyclopedia of Energy, 29–38.Google Scholar
  28. Lee, D. D., Pitari, G., Grewe, V., Gierens, K., Penner, J. E., Petzold, A., et al. (2010). Transport impacts on atmosphere and climate: Aviation. Atmospheric Environment, 44, 4678–4734.CrossRefGoogle Scholar
  29. Macintosh, A., & Wallace, L. (2009). International aviation emissions to 2025: Can emissions be stabilised without restricting demand? Energy Policy, 37(1), 264–273.CrossRefGoogle Scholar
  30. Mason, K. J., & Miyoshi, C. (2009). Airline business models and their respective carbon footprint: Final report. United Kingdom: Omega.Google Scholar
  31. Merkert, R., & Hensher, D. A. (2011). The impact of strategic management and fleet planning on airline efficiency—A random effects Tobit model based on DEA efficiency scores. Transportation Research Part A Policy and Practice, 45, 686–695.CrossRefGoogle Scholar
  32. Miyoshi, C. (2014). Assessing the equity impact of the European union emission trading scheme on an African airline. Transport Policy, 33, 56–64.CrossRefGoogle Scholar
  33. Miyoshi, C., & Mason, K. J. (2009). Toward assessing the environmental performance of differing airline business models using and the potential for companies to reduce their business travel related carbon emissions. Journal of Air Transport Management, 15(3), 137–142.CrossRefGoogle Scholar
  34. Miyoshi, C., & Mason, K. (2013). The damage cost of carbon dioxide emissions produced by passengers on airport surface access: The case of Manchester airport. Journal of Transport Geography, 28, 137–143.CrossRefGoogle Scholar
  35. Miyoshi, C., & Rietveld, P. (2015). Measuring the equity effects of a carbon charge on car commuters: A case study of Manchester airport. Transportation Research Part D, 35, 23–39.CrossRefGoogle Scholar
  36. Morrell, P. (2009). The potential for European aviation CO2 emissions reduction through the use of larger jet aircraft. Journal of Air Transport Management, 15, 151–157.CrossRefGoogle Scholar
  37. Morrell, P., & Dray, L. (2009). Environmental aspects of fleet turnover, retirement and life cycle, final report. United Kingdom: Omega.Google Scholar
  38. Oum, T. H., Fu, X., & Yu, C. (2005). New evidences on airline efficiency and yield: A comparative analysis of major North American air carriers and its implication. Transport Policy, 12, 153–164.CrossRefGoogle Scholar
  39. Scheelhaase, J. D., Grimme, W., & Schaefer, M. (2010). The inclusion of aviation into the EU emission trading scheme—Impacts on competition between European and non-European network airlines. Transportation Research Part D, 15(1), 14–25.CrossRefGoogle Scholar
  40. Sgouridis, S., Bonnefoy, P. A., & Hansman, R. J. (2011). Air transportation in a carbon constrained world: Long-term dynamics of policies and strategies for mitigating the carbon foot print of commercial aviation. Transportation Research Part A, 45, 1077–1091.Google Scholar
  41. Tol, R. S. J. (2005). The marginal damage cost of carbon dioxide emissions: An assessment of the uncertainties. Energy Policy, 33, 2064–2074.CrossRefGoogle Scholar
  42. Vespermann, J., & Wald, A. (2011). Much ado about nothing?—An analysis of economic impacts and ecologic effects of the EU-emissions trading scheme in the aviation industry. Transportation Research Part A, 45(10), 877–880.Google Scholar
  43. Zhang, A., Gudmundsson, S. V., & Oum, T. H. (2010). Air transport, global warming and the environment. Transportation Research Part D Transport and Environment, 15(1), 1–4.CrossRefGoogle Scholar
  44. Zou, B., Elke, M., Hansen, M., & Kafle, N. (2014). Evaluating air carrier fuel efficiency in the US airline industry. Transportation Research Part A Policy and Practice, 59, 306–330.CrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  1. 1.Centre for Air Transport ManagementCranfield UniversityCranfield, BedfordshireUK
  2. 2.Institute of Transport and Logistics Studies, The University of Sydney Business SchoolThe University of SydneySydneyAustralia

Personalised recommendations