Airline collaboration and Environmental impact

Abstract

In recent years, the aviation industry has faced escalating environmental scrutiny, prompted by the global shift towards heightened environmental awareness. This study explores a collaboration framework set up by airlines which envision to partially or totally shoulder the environmental impact costs generated by their airborne emissions. The methodology developed includes the production of detailed emissions data to be employed during the airline’s planning strategy. The model conceived introduces a taxation approach exploited by airlines to include and incentive more environmentally sustainable solutions and, a collaboration mechanism based on the possibility to share passenger demand between collaborating airlines. The environmental incentive and collaboration are implemented in a Linear Programming Network and Frequency Planning model with the goal of maximising airlines profitability. A case study is analysed focusing on two airlines, KLM and TAP, collaborating to achieve improved environmental and economic performance. The airlines engage in a scenario where the environmental impact externalities generated by airborne operations are shouldered by the airlines themselves. Employing the model developed, the airlines explore solutions that either reduce the environmental impact or that solely maximise profit of the two airlines. The results underscore the potential benefits of including collaboration in the airline’s planning strategy, with a total 1.33% reduction in environmental impact when prioritising environmental cost abatement. Collaboration also demonstrated to be a consistent tool to achieve a profit recovery, showing up to a total anticipated profit increase of 2.21% when prioritising profitability or 0.71% when the priority is given to environmental impact reduction. In conclusion, this study highlights the potential efficacy of collaboration in addressing aviation’s environmental and economic challenges.