Are Asia and Oceania carriers up to par with the sustainability facet?

Over the past decade, airlines in Asia-Oceania have faced the dual challenge of expanding operational capacity while addressing pressing environmental concerns. This study evaluates how major carriers in the region have balanced these competing priorities through eco-efficiency initiatives from 2012 to 2023. Using a Slack-based measure (SBM), we assess 13 airlines’ sustainability performance by examining their capacity utilization alongside environmental indicators including fuel consumption and CO 2 emissions. The findings reveal significant disparities in how airlines manage the capacity-environment tradeoff. While leaders like Singapore Airlines and Qantas demonstrate that capacity growth can coexist with emissions reduction through strategic fleet modernization and high load factors, other carriers struggle with inefficient operations that compromise both productivity and sustainability. The COVID-19 pandemic unexpectedly served as a natural experiment, showing how temporary capacity reductions led to improved environmental metrics, though these gains proved uneven across airlines. A subsequent regression analysis identified newer fleet age and higher load factors as statistically significant drivers of eco-efficiency. The study highlights how the region’s lack of coordinated environmental policies creates an uneven playing field for sustainable capacity expansion. As demand rebounds, our analysis suggests that airlines adopting integrated approaches to network optimization , focusing on improving load factors , and clean technology investments will be best positioned to achieve both operational growth and sustainability targets. These findings provide critical insights for airlines navigating the complex interplay between market expansion pressures and decarbonization commitments in one of the world’s fastest-growing aviation markets.