Fleet-level Environmental Evaluation Tool (FLEET) is a NASA sponsored simulation tool to assess environmental impact of aviation (emissions and noise) impact under scenarios of market demand and aircraft technology availability. By modeling airline operations as a resource allocation problem, various scenarios of market and economic conditions, aircraft technology availability and policy implementation can be studied using FLEET. The current work focuses on evaluation of the decisions airlines make in order to stay competitive and the consequent impact on air travel in the face of imposed environmental policy and airport capacity constraints. Also, the fraction of market demand served under various emissions reduction targets is computed. Results indicate that imposing very strict carbon emissions constraints could be counterproductive in the sense that a significant portion of demand will go unmet.