Airline environmental efficiency comparison through two non-separable inputs disposability Range Adjusted Measure models

Abstract

The aviation industry contributes to climate pollution while facilitating commercial trade and international exchanges. How to improve the overall efficiency of airlines has become a hot issue of social concern. Based on the Range Adjusted Measure model (RAM), this paper proposes two improved by-production models, namely mixed input sharing model and good output sharing model, which decompose the air transport process to explore the driving factors of airline efficiency. We take the Number of Employees (NE), Fleet Size (FS) and Aviation Kerosene (AK) as the inputs, the Revenue Passenger Kilometers (RPK) as the desirable output, and the Greenhouse gas emission (GHG) as the undesirable output. The empirical study is based on the data of 22 global airlines from 2014 to 2019. We have some findings: (1) The average efficiency scores of mixed input sharing model are higher for most airlines than the good output sharing model. (2) The efficiency scores of the good output sharing model are more distributed than the mixed input sharing model. (3) Fleet renewal and carbon emission reduction policies play an important role in improving environmental efficiency. In addition, the possible future research directions and policy implications are also proposed in this paper.