This study examines how institutional entrepreneurs in China’s aviation sector navigate the dual pressures of domestic carbon emission trading schemes (ETS) and the global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Using qualitative case study methods, including 24 elite interviews with aviation executives, regulators, and carbon market experts, we analyse the role of China Southern Airlines (CSA) as a key actor in sustainability transition. Findings reveal that field-level contradictions, social legitimacy, and collective institutional entrepreneurship shape the adoption of carbon reduction strategies. The study contributes to aviation environmental and sustainability policies and institutional theory by highlighting the interplay between regulatory compliance and global sustainability norms in emerging economies.