Greenhouse gas emission under a dual-disposability approach: Assessing environmental technical efficiency in the airline industry

Montacer Ben Cheikh Larbi and Sina Belkhiria ()
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Montacer Ben Cheikh Larbi: ULR - La Rochelle Université
Sina Belkhiria: ISG - Institut Supérieur de Gestion de Tunis [Tunis] - Université de Tunis

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Abstract: This study provides a robust analysis of environment-adjusted airline efficiency under a dual-disposability assumption for undesirable output. It employs also a two-stage methodology to investigate the complex and heterogeneous relationships between airline operational profiles and their environmental efficiency. Technical efficiency is estimated in the first step using a Data Envelopment Analysis (DEA) based on the Directional Distance Function (DDF) under both assumptions of the technological characterization of gas emissions, contractible versus non-contractible. In the second step, to analyze the factors influencing the estimated efficiency scores, a Tobit second-stage regression is employed. Results show that efficiency scores under strong disposability are systematically and significantly higher than those obtained under weak disposability, with an average difference of 11.9 percentage points. The findings also indicate a positive and statistically significant relationship between the LCC variable and technical efficiency, implying that airline groups with LCC subsidiaries achieve higher efficiency levels. Based on their specific trade-off between operational and environmental inputs, the analysis of technical efficiency elasticities classifies airlines into five groups. These range from "Strong Proactive Environmental Performers" to "Low Efficiency High-Cost" groups, whose efficiency improvements are structurally linked to either an optimization or a deterioration of Greenhouse Gas (GHG) emissions performance. The technical efficiency elasticity with respect to revenue share and to fuel efficiency are parallel across all airlines, while the elasticity for GHG consistently exhibits the opposite sign. We provide one of the few systematic comparisons of efficiency scores under weak versus strong disposability. This comparison allows us to quantify the systematic contraction in measured efficiency that occurs when greenhouse gas emissions are modeled as a technologically costly output rather than a costless byproduct.

Keywords: Environmental efficiency GHG emissions Airline Directional distance function; Directional Distance Function; Airline; GHG Emissions; Environmental Efficiency (search for similar items in EconPapers)
Date: 2027-03
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Published in Journal of Air Transport Management, 2027, 139, pp.103128. ⟨10.1016/j.jairtraman.2026.103128⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05768890

DOI: 10.1016/j.jairtraman.2026.103128

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