•An original model to assess the EU-ETS impact on the aviation sector is provided.•The abatement efforts in the cost function explicit environmental airline strategies.•Interactions among abatement efforts, free allowances, fines, secondary/auction market are discussed.•Empirical simulations on outputs, profits, and abatement efforts are proposed for Italian airlines operators.•A trade-off between airlines efficiency and the distribution of free of charge allowances is highlighted.
Transportation Research Part A: Policy and Practice – Elsevier
Published: Jul 1, 2018
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