Aero‐Circularity: Charting the Flight Path Between Circular Economy and Sustainability Performance

ABSTRACT The aircraft manufacturing industry faces a critical juncture due to the necessity to replace ageing fleets and address the environmental impact of the industry dimension. The high demand for new aircraft and limited production capacity has driven industry leaders to integrate Circular Economy ( CE ) principles into their manufacturing and maintenance strategies, trying to increase aircraft lifespan. This study examines the specific CE actions implemented by aircraft manufacturers and assesses their impact on sustainability performance. Sustainability reports and non‐financial disclosures were analysed using a taxonomy tailored to the industry to identify CE actions. Econometric models were then employed to analyse the relationship between the number of CE actions adopted and sustainability performance, using REFINITIV's sustainability performance scores as dependent variables. Results indicate that companies are starting to adopt CE actions focused on product life extension and repairability. Furthermore, the analysis demonstrates that companies with more declared CE actions exhibit higher environmental and corporate governance performance. Hence, this study empirically validates the link between adopting CE actions and improved sustainability performance, offering practical guidance for aircraft manufacturers and informing policymakers, investors, and other stakeholders on the benefits of CE actions in the industry.