Airline Emission Charges: Effects on Airfares, Service Quality, and Aircraft Design

By Jan K. Brueckner, Anming Zhang. Social Science Research Network, 2009

183 citations recorded by the source corpus.

This paper investigates the effect of airline emissions charges on airline service quality, airfares, aircraft design features, and network structure, using a realistic and detailed 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.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/8a8e202b70f5091c0ddfc57e74632c92c24a047c

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Citations in the corpus

Exploring airline passengers’ willingness to pay for carbon offsets (2012, background): “Brueckner and Zhang (2010) further indicate that the emission charge will not only raise fares, but also reduce flight frequency, increase load factors, and raise aircraft fuel efficiency.”
Transport energy consumption and saving in China (2014, background): “Perfecting air route network, optimizing transportation resources allocation, improving the utilization of aircraft, are also the effective measures for saving energy [67,68].”
Air Transport Liberalization and Its Impacts on Airline Competition and Air Passenger Traffic (2009, background): “Nevertheless, the increase in fuel price does put financial pressures on the airlines to the extent that some have imposed fuel surcharges that have added on the fares paid by passengers, a fare-rise outcome predicted by Brueckner and Zhang (2008).”
Air transport and high-speed rail competition: environmental implications and mitigation strategies (2016, background): “43 For estimations of the impact of ETS costs on airfares, see Anger and Köhler (2010) as well as Brueckner and Zhang (2010).”