Potential Impacts Of Us Climate Policy On The Airline Industry

摘要

The implementation of a climate policy in the U.S. has the potential to affect airlines’ operating costs - through fuel related cap & trade allowances or taxes-, airfares and ultimately demand for air transportation. In order to evaluate effects on airlines’ supply, passenger demand and aviation’s greenhouse gas emissions, an airline network simulation model was developed and applied to three types of airlines; network legacy, low-cost and regional carriers. Based on assumptions from current forecasts of cap & trade allowances or taxes, results from the model suggest that the effects on airlines’ operating costs, revenues and thus profits will be marginal and fairly uniform across the airline types. It is therefore expected that this policy will have marginal effects on competitive distortions and the structure of the airline industry. At the airline level, it was found that while demand reductions would be higher for low-cost carriers than other types of airlines, this effect is compensated by the higher efficiency of its younger fleet. Sensitivity analyses on airlines’ financial performance, demand and emissions showed that model results are most sensitive to environmental charges, followed by airline growth rate and finally passengers’ elasticity assumptions. In contrast, aircraft fuel efficiency gains are expected to result in marginal effects on airlines’ emissions in part due its effect on lowering operating costs and fares, and thus stimulating demand.