Airline emission charges: Effects on airfares, service quality, and aircraft design

• Published in: Transportation research. Part B: methodological Vol. 44; no. 8; pp. 960 - 971
• Main Authors: Brueckner, Jan K., Zhang, Anming
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01.09.2010; Elsevier
• Series: Transportation Research Part B: Methodological
• Subjects: Air transportation and traffic; Aircraft; Aircraft components; Aircraft design; Aircraft fuels; Airlines; Applied sciences; Commercial aircraft; Commercial planes; Emission; Emission charges; Emission charges Airlines Global warming; Exact sciences and technology; Global warming; Ground, air and sea transportation, marine construction; Optimization; Transportation; Global warming; Airlines; Emission charges; Warming; Empirical method; Pollutant emission; Modeling; Dynamical climatology; Climate change; Welfare; Environment impact; Transportation network; Air transportation; Profit; Taxation; Aircraft; Service quality; Comparative study
• ISSN: 0191-2615; 1879-2367
• DOI: 10.1016/j.trb.2010.02.006

This paper explores the effect of airline emissions charges on airfares, airline service quality, aircraft design features, and network structure, using a detailed and realistic theoretical model of competing duopoly airlines. These impacts are derived by analyzing the effects of an increase in the effective price of fuel, which is the path by which emissions charges will alter airline choices. The results show that emission charges will raise fares, reduce flight frequency, increase load factors, and raise aircraft fuel efficiency, while having no effect on aircraft size. Given that these adjustments occur in response to the treatment of an emissions externality that is currently unaddressed, they represent efficient changes that move society closer to a social optimum.