IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v174y2025ics0967070x25003841.html

From Operations to Policy: Integrating the CII Index into Analytical Frameworks for Airline Decarbonization

Author

Listed:
  • Atay, Metehan

Abstract

The aviation industry, contributing 2–3 % of global CO2 emissions annually, faces growing pressure to balance environmental responsibilities with economic performance. With the International Air Transport Association's (IATA) net-zero carbon goal by 2050, airlines must address challenges such as carbon tax policies, fleet optimization, and consumer affordability. This study examines the impact of market-based emission policies—carbon taxes, trading systems, and offset mechanisms—on Full-Service Carriers (FSCs) and Low-Cost Carriers (LCCs). Findings reveal that LCCs, with high efficiency and short-haul operations, adapt better to regulations than FSCs, which face higher costs due to long-haul networks. Strategies like fleet modernization, increased load factors, and sustainable aviation fuels (SAFs) are explored as pathways to mitigating passenger cost burdens while ensuring compliance. Methodologically, the study employs a Log-Mean Divisia Index (LMDI) decomposition model alongside a decoupling analysis to assess the environmental and financial performance of airlines. Highlighting the importance of tailored strategies, this study provides actionable insights and emphasizes collaboration between governments, airlines, and consumers to achieve sustainable growth in aviation. In addition, the study adapts the Carbon Intensity Indicator (CII) from the maritime sector to aviation, providing a novel metric for assessing carbon efficiency. Integrating CII with LMDI and profitability indicators enables a more transparent evaluation of airline sustainability and offers policymakers a robust tool for emission management.

Suggested Citation

  • Atay, Metehan, 2025. "From Operations to Policy: Integrating the CII Index into Analytical Frameworks for Airline Decarbonization," Transport Policy, Elsevier, vol. 174(C).
    • Handle: RePEc:eee:trapol:v:174:y:2025:i:c:s0967070x25003841
    DOI: 10.1016/j.tranpol.2025.103841
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X25003841
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2025.103841?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Scheelhaase, Janina & Maertens, Sven & Grimme, Wolfgang & Jung, Martin, 2018. "EU ETS versus CORSIA – A critical assessment of two approaches to limit air transport's CO2 emissions by market-based measures," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 55-62.
    2. Chang, Kai & Pei, Ping & Zhang, Chao & Wu, Xin, 2017. "Exploring the price dynamics of CO2 emissions allowances in China's emissions trading scheme pilots," Energy Economics, Elsevier, vol. 67(C), pages 213-223.
    3. Isik, Mine & Sarica, Kemal & Ari, Izzet, 2020. "Driving forces of Turkey's transportation sector CO2 emissions: An LMDI approach," Transport Policy, Elsevier, vol. 97(C), pages 210-219.
    4. Albert, Juan-Francisco & Gómez-Fernández, Nerea & Boto-García, David, 2025. "Up in the air: How do carbon policy shocks affect air travel?," Transport Policy, Elsevier, vol. 168(C), pages 54-68.
    5. Shanshan Zheng & Cheng Chen & Sikai Xie, 2025. "An LMDI-Based Analysis of Carbon Emission Changes in China’s Waterway Transportation Sector," Sustainability, MDPI, vol. 17(1), pages 1-13, January.
    6. Luo, Xiao & Dong, Liang & Dou, Yi & Liang, Hanwei & Ren, Jingzheng & Fang, Kai, 2016. "Regional disparity analysis of Chinese freight transport CO2 emissions from 1990 to 2007: Driving forces and policy challenges," Journal of Transport Geography, Elsevier, vol. 56(C), pages 1-14.
    7. Wang, Xiyan(Jamie), 2016. "1-Hub, 2-hub or fully connected network? A theoretical analysis of the optimality of airline network structure," Economics of Transportation, Elsevier, vol. 5(C), pages 12-23.
    8. Pang, Shinsiong & Chen, Mu-Chen, 2023. "The EU emissions trading system and airline low-carbon transition: A game-theoretic approach," Journal of Air Transport Management, Elsevier, vol. 110(C).
    9. Rosskopf, Michael & Lehner, Stephan & Gollnick, Volker, 2014. "Economic–environmental trade-offs in long-term airline fleet planning," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 109-115.
    10. Mohammadian, Iman & Abareshi, Ahmad & Abbasi, Babak & Goh, Mark, 2019. "Airline capacity decisions under supply-demand equilibrium of Australia’s domestic aviation market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 119(C), pages 108-121.
    11. Ko, Young Dae & Jang, Young Jae & Kim, Dae Young, 2017. "Strategic airline operation considering the carbon constrained air transport industry," Journal of Air Transport Management, Elsevier, vol. 62(C), pages 1-9.
    12. Mayor, Karen & Tol, Richard S.J., 2007. "The impact of the UK aviation tax on carbon dioxide emissions and visitor numbers," Transport Policy, Elsevier, vol. 14(6), pages 507-513, November.
    13. Jiang, Mei & Jiang, Changmin & Xiao, Yi-bin & Wang, Chunan, 2021. "Air-HSR cooperation: Impacts on service frequency and environment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 150(C).
    14. Cui, Qiang, 2019. "The online pricing strategy of low-cost carriers when carbon tax and competition are considered," Transportation Research Part A: Policy and Practice, Elsevier, vol. 121(C), pages 420-432.
    15. Zheng, Shiyuan & Wang, Chunan & Jiang, Changmin, 2024. "Carrot or stick? Environmental and welfare implications of sustainable aviation fuel policies," Transportation Research Part B: Methodological, Elsevier, vol. 188(C).
    16. Zhou, Zhongliang & Su, Yanfang & Gao, Jianmin & Xu, Ling & Zhang, Yaoguang, 2011. "New estimates of elasticity of demand for healthcare in rural China," Health Policy, Elsevier, vol. 103(2), pages 255-265.
    17. Silva, Hugo E. & Verhoef, Erik T. & van den Berg, Vincent A.C., 2014. "Airline route structure competition and network policy," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 320-343.
    18. Brueckner, Jan K. & Zhang, Anming, 2010. "Airline emission charges: Effects on airfares, service quality, and aircraft design," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 960-971, September.
    19. Winchester, Niven, 2019. "A win-win solution to abate aviation CO2 emissions," Journal of Air Transport Management, Elsevier, vol. 80(C), pages 1-1.
    20. Arjomandi, Amir & Seufert, Juergen Heinz, 2014. "An evaluation of the world's major airlines' technical and environmental performance," Economic Modelling, Elsevier, vol. 41(C), pages 133-144.
    21. Chen, Ruotian & Yang, Hangjun & Wang, Kun & Jiang, Changmin, 2024. "Impacts of a sustainable aviation fuel mandate on airline competition — Full-service carrier vs. low-cost carrier," Transportation Research Part B: Methodological, Elsevier, vol. 190(C).
    22. Fu, Qian & Kim, Amy M., 2016. "Supply-and-demand models for exploring relationships between smaller airports and neighboring hub airports in the U.S," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 67-79.
    23. Fageda, Xavier & Teixidó, Jordi J., 2022. "Pricing carbon in the aviation sector: Evidence from the European emissions trading system," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    24. Ang, B.W. & Liu, F.L., 2001. "A new energy decomposition method: perfect in decomposition and consistent in aggregation," Energy, Elsevier, vol. 26(6), pages 537-548.
    25. Meleo, Linda & Nava, Consuelo R. & Pozzi, Cesare, 2016. "Aviation and the costs of the European Emission Trading Scheme: The case of Italy," Energy Policy, Elsevier, vol. 88(C), pages 138-147.
    26. Brons, Martijn & Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2002. "Price elasticities of demand for passenger air travel: a meta-analysis," Journal of Air Transport Management, Elsevier, vol. 8(3), pages 165-175.
    27. Fu, Xiaowen & Jin, Huan & Liu, Shaoxuan & Oum, Tae H. & Yan, Jia, 2019. "Exploring network effects of point-to-point networks: An investigation of the spatial patterns of Southwest Airlines’ network," Transport Policy, Elsevier, vol. 76(C), pages 36-45.
    28. Richard S.J. Tol, 2006. "The Impact Of A Carbon Tax On International Tourism," Working Papers FNU-120, Research unit Sustainability and Global Change, Hamburg University, revised Nov 2006.
    29. Yue, Xuanyu & Byrne, Julie, 2024. "Identifying the determinants of carbon emissions of individual airlines around the world," Journal of Air Transport Management, Elsevier, vol. 115(C).
    30. Wang, Chunan & Wang, Xiaoyu, 2019. "Why do airlines prefer multi-hub networks?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 124(C), pages 56-74.
    31. Dixit, Aasheesh & Jakhar, Suresh Kumar, 2021. "Airport capacity management: A review and bibliometric analysis," Journal of Air Transport Management, Elsevier, vol. 91(C).
    32. Lynnette Dray & Andreas W. Schäfer & Carla Grobler & Christoph Falter & Florian Allroggen & Marc E. J. Stettler & Steven R. H. Barrett, 2022. "Cost and emissions pathways towards net-zero climate impacts in aviation," Nature Climate Change, Nature, vol. 12(10), pages 956-962, October.
    33. Wei, Wenbin & Hansen, Mark, 2005. "Impact of aircraft size and seat availability on airlines' demand and market share in duopoly markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(4), pages 315-327, July.
    34. Nava, Consuelo R. & Meleo, Linda & Cassetta, Ernesto & Morelli, Giovanna, 2018. "The impact of the EU-ETS on the aviation sector: Competitive effects of abatement efforts by airlines," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 20-34.
    35. Reza Rahmati & Hossein Neghabi & Mahdi Bashiri & Majid Salari, 2024. "Stochastic green profit-maximizing hub location problem," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 75(1), pages 99-121, January.
    36. Pitfield, D.E. & Caves, R.E. & Quddus, M.A., 2010. "Airline strategies for aircraft size and airline frequency with changing demand and competition: A simultaneous-equations approach for traffic on the north Atlantic," Journal of Air Transport Management, Elsevier, vol. 16(3), pages 151-158.
    37. Cattaneo, Mattia & Malighetti, Paolo & Redondi, Renato & Salanti, Andrea, 2018. "Changes in frequencies and price variations on point-to-point routes: The case of easyJet," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 60-70.
    38. Seetaram, Neelu & Song, Haiyan & Ye, Shun & Page, Stephen, 2018. "Estimating willingness to pay air passenger duty," Annals of Tourism Research, Elsevier, vol. 72(C), pages 85-97.
    39. Becken, Susanne & Carmignani, Fabrizio, 2020. "Are the current expectations for growing air travel demand realistic?," Annals of Tourism Research, Elsevier, vol. 80(C).
    40. Hsu, Chaug-Ing & Wen, Yuh-Horng, 2003. "Determining flight frequencies on an airline network with demand-supply interactions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 39(6), pages 417-441, November.
    41. Yu, Jinglei & Shao, Chaofeng & Xue, Chenyang & Hu, Huaqing, 2020. "China's aircraft-related CO2 emissions: Decomposition analysis, decoupling status, and future trends," Energy Policy, Elsevier, vol. 138(C).
    42. Ang, B.W. & Liu, Na, 2007. "Handling zero values in the logarithmic mean Divisia index decomposition approach," Energy Policy, Elsevier, vol. 35(1), pages 238-246, January.
    43. González, Rodrigo & Hosoda, Eiji B., 2016. "Environmental impact of aircraft emissions and aviation fuel tax in Japan," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 234-240.
    44. Wu, Chuntao & He, Xiaohe & Dou, Yi, 2019. "Regional disparity and driving forces of CO2 emissions: Evidence from China's domestic aviation transport sector," Journal of Transport Geography, Elsevier, vol. 76(C), pages 71-82.
    45. Zou, Bo & Hansen, Mark, 2012. "Flight delays, capacity investment and social welfare under air transport supply-demand equilibrium," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 965-980.
    46. Pagoni, Ioanna & Psaraki-Kalouptsidi, Voula, 2016. "The impact of carbon emission fees on passenger demand and air fares: A game theoretic approach," Journal of Air Transport Management, Elsevier, vol. 55(C), pages 41-51.
    47. Liao, Weijun & Wang, Chunan, 2021. "Airline emissions charges and airline networks," Journal of Air Transport Management, Elsevier, vol. 92(C).
    48. Andreoni, V. & Galmarini, S., 2012. "European CO2 emission trends: A decomposition analysis for water and aviation transport sectors," Energy, Elsevier, vol. 45(1), pages 595-602.
    49. Kuok, Rockie U Kei & Koo, Tay T.R. & Lim, Christine, 2023. "Interaction effects of air services on tourism demand," Annals of Tourism Research, Elsevier, vol. 101(C).
    50. Schiff, Aaron & Becken, Susanne, 2011. "Demand elasticity estimates for New Zealand tourism," Tourism Management, Elsevier, vol. 32(3), pages 564-575.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yue, Xuanyu & Byrne, Julie, 2024. "Identifying the determinants of carbon emissions of individual airlines around the world," Journal of Air Transport Management, Elsevier, vol. 115(C).
    2. Boto-García, David & Albert, Juan Francisco & Gómez-Fernández, Nerea, 2024. "Carbon price shocks and tourism demand," Annals of Tourism Research, Elsevier, vol. 108(C).
    3. Wang, Chunan & Yue, Shuai & Liao, Weijun & Ji, Qing & Zhang, Anming, 2025. "Environmental and welfare effects of airline fuel tankering strategy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 202(C).
    4. Kang, Yicheng & Liao, Sha & Jiang, Changmin & D’Alfonso, Tiziana, 2022. "Synthetic control methods for policy analysis: Evaluating the effect of the European Emission Trading System on aviation supply," Transportation Research Part A: Policy and Practice, Elsevier, vol. 162(C), pages 236-252.
    5. Sibdari, Soheil & Mohammadian, Iman & Pyke, David F., 2018. "On the impact of jet fuel cost on airlines’ capacity choice: Evidence from the U.S. domestic markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 111(C), pages 1-17.
    6. Lyu, Chen & Liu, Xiaoman & Wang, Zhen & Yang, Lu & Liu, Hao & Yang, Nan & Xu, Shaodong & Cao, Libin & Zhang, Zhe & Pang, Lingyun & Zhang, Li & Cai, Bofeng, 2023. "An emissions inventory using flight information reveals the long-term changes of aviation CO2 emissions in China," Energy, Elsevier, vol. 262(PB).
    7. Mohammadian, Iman & Abareshi, Ahmad & Abbasi, Babak & Goh, Mark, 2019. "Airline capacity decisions under supply-demand equilibrium of Australia’s domestic aviation market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 119(C), pages 108-121.
    8. Wang, Jiqiang & Wang, Ya & Zhang, Shaohui & Fan, Chun & Zhou, Nanqing & Liu, Jinhui & Li, Xin & Liu, Yun & Hou, Xiujun & Yi, Bowen, 2024. "Accounting of aviation carbon emission in developing countries based on flight-level ADS-B data," Applied Energy, Elsevier, vol. 358(C).
    9. Wu, Jiaxuan & Sun, Xiaoqian & Xu, Yifan & Jiang, Changmin & Wandelt, Sebastian, 2025. "Hydrogen airport location selection and fleet assignment under policy considerations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 197(C).
    10. Wang, Yingzhi & Jiang, Xiushan & Ma, Jihui, 2025. "Emissions reduction of air transport and high-speed rail with policy intervention considering the modal competition in a network market: Environment and welfare implications," Transport Policy, Elsevier, vol. 162(C), pages 379-395.
    11. Albert, Juan-Francisco & Gómez-Fernández, Nerea & Boto-García, David, 2025. "Up in the air: How do carbon policy shocks affect air travel?," Transport Policy, Elsevier, vol. 168(C), pages 54-68.
    12. Chen, Wei-Ting & Huang, Kuancheng & Ardiansyah, Muhammad Nashir, 2018. "A mathematical programming model for aircraft leasing decisions," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 15-25.
    13. Fageda, Xavier & Oesingmann, Katrin, 2025. "The impact of carbon pricing on tourist destinations: Shifts in demand, supply and emissions in the European aviation market," Economics of Transportation, Elsevier, vol. 42(C).
    14. Fageda, Xavier & Teixidó, Jordi J., 2022. "Pricing carbon in the aviation sector: Evidence from the European emissions trading system," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    15. Wang, Chunan & Jiang, Changmin, 2022. "How do pandemics affect intercity air travel? Implications for traffic and environment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 330-353.
    16. Xuanyu Yue & Julie Byrne, 2021. "Linking the Determinants of Air Passenger Flows and Aviation Related Carbon Emissions: A European Study," Sustainability, MDPI, vol. 13(14), pages 1-16, July.
    17. Birolini, Sebastian & Jacquillat, Alexandre & Cattaneo, Mattia & Antunes, António Pais, 2021. "Airline Network Planning: Mixed-integer non-convex optimization with demand–supply interactions," Transportation Research Part B: Methodological, Elsevier, vol. 154(C), pages 100-124.
    18. Scheelhaase, Janina D., 2019. "How to regulate aviation's full climate impact as intended by the EU council from 2020 onwards," Journal of Air Transport Management, Elsevier, vol. 75(C), pages 68-74.
    19. Oesingmann, Katrin, 2022. "The effect of the European Emissions Trading System (EU ETS) on aviation demand: An empirical comparison with the impact of ticket taxes," Energy Policy, Elsevier, vol. 160(C).
    20. Lay Eng Teoh & Hooi Ling Khoo, 2016. "Fleet Planning Decision-Making: Two-Stage Optimization with Slot Purchase," Journal of Optimization, Hindawi, vol. 2016, pages 1-12, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:174:y:2025:i:c:s0967070x25003841. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.