Revisiting an environmental efficiency analysis of global airlines: A parametric enhanced hyperbolic distance function

Abstract

The rapid growth of the aviation industry has raised global concerns, as the related production of negative externalities (i.e., carbon emissions) is also increasing. Worldwide, flights emitted 914 million tonnes of CO2 in 2019, accounting for approximately 2.1% of total global CO2 emissions. Consequently, the purpose of this study is to analyse the environmental efficiency of 112 global airlines in 2017 using a parametric enhanced hyperbolic distance function approach. This study also aims to capture four explanatory variables (geographical region, alliances, average stage length, and weight load factor) as determinants in the proposed approach to explain the impacts on global airline environmental efficiency in the industry. The results confirmed that on average, airlines are likely to be more efficient in the use of input resources when carbon emissions are considered in the study. The results revealed that the average stage length and weight load factor are significant factors that contribute to environmental efficiency. The results from this study can provide guidance for future research issues and directions.