Sounds like both sides are telling some fibs. Bigger planes tend to be more efficient on a per-seat-mile basis, but that could also drive increased use which is not good for the environment. If an airfare on a small plane costs $2000 because it's chartered and on a big plane is $150, then a lot more people could be coming on the big plane which, overall, burns far more fuel and is worse for the environment.
Since the analysis for this ad and the Coalition claim is missing, it's not clear what the basis is.
I highly doubt the Coalition is asking to create planes that resemble the WB-57, no 8-seaters with 120 foot spans.