Analyzing the Environmental Efficiency of Global Airlines by Continent for Sustainability

Abstract

The study of environmental sustainability in the aviation industry mainly focuses on research targeting specific regions such as the United States, Europe, and China. However, for the environmental sustainability of the aviation industry, global airlines on all continents around the world must implement efficient environmental management. This study divides the world into six continents and attempts to verify environmental efficiency for airlines belonging to each continent. Using data from 2014 to 2018 of 31 global airlines, this study compares environmental efficiency in the aviation industry by continent and individual airline. Data envelopment analysis (DEA), which is actively used in efficiency studies was adopted as an analysis method. We find that, first, airlines in Europe and Russia have the highest environmental efficiency, and airlines in North America and Canada are the second highest, which can be a good benchmark for other airlines. Second, in technical efficiency (TE) values, airlines in Africa and the Middle East and Latin America generally have low efficiency; but, in the airlines in Africa and the Middle East, environmental efficiency is steadily improving slightly. In comparison, airlines in Latin America showed a decrease in environmental efficiency value, requiring a lot of effort and investment to improve efficiency. Third, for airlines in North America and Canada, the scale efficiency (SE) value was the lowest, even though there was a high level of overall environmental efficiency, indicating the need for efficiency improvement through economies of scale. This study has implications, in that, it suggests how airlines can perform efficient environmental management for sustainability according to the continent to which they belong.