Highlights • Green fleet model considers profit and environmental issue during fleet planning. • A Green Fleet Index framework is defined to quantify the airline green level. • A bi-objective optimization model is proposed to solve green fleet planning model. • A well-defined fleet planning model assures maximal profit and green performance. • Increase load factor and operate new aircraft reduce aircraft environment impact.

Abstract Ensuring a fleet of green aircraft is a basic step in mitigating aviation pollution issues that are expected to be worsen in the coming years due to rapid air traffic growth. This study proposed a novel methodology in green fleet planning in which both profit and green performance of airline are considered simultaneously and explicitly. To do this, a Green Fleet Index (GFI) is derived as an indicator to quantify the green performance of airline’s fleet. It measures the degree of airline compliance with a standard requirement in terms of emission, noise, and fuel consumption. A bi-objective dynamic programming model is then formulated to find optimal aircraft acquisition (lease or purchase) decision by minimizing GFI and maximizing profit. Several interesting results are obtained: (1) considering environmental issue as secondary objective yields a greener fleet; (2) airline’s profit is affected, but could be recovered from environmental cost savings; (3) increasing load factor is an effective operational improvement strategy to enhance airline’s green performance and raise profit level. It is anticipated that the framework developed in this study could assist airlines to make a smart decision when considering the need to be green.