A data-based comparison of the five undesirable output disposability approaches in airline environmental efficiency

Abstract

The carbon emissions of airlines are growing rapidly, so if we intend to evaluate the airlines’ environmental efficiency, carbon emissions should be a kind of undesirable output. Five disposability approaches for undesirable output have been proposed, but no data-based empirical study has been done to compare them. In this paper, we define Greenhouse gas emission as the undesirable output and select Number of Employees, Fleet Size, Sales Costs, and Aviation Kerosene as the inputs, the desirable outputs are Revenue Passenger Kilometers and Total Revenue. The data of 29 international airlines from 2008 to 2014 are applied to compare the disposability approaches in airline environmental efficiency. The main findings are: 1. By-production model has the best performance in distinguishing airline environmental efficiency. 2. Unified natural disposability & managerial disposability does well in deciding efficient airlines and in deciding the airlines with the lowest efficiency. 3. The undesirable output related indices have a more important role in the efficiency change of by-production model.