Airline emissions charges and airline networks. (May 2021)

• Record Type: Journal Article
• Authors: Liao, Weijun; Wang, Chunan
• Is Part Of: Journal of air transport management. Volume 92(2021)
• Publication Date: 2021-05
• Subjects: Airline emissions charges -- Airline network -- Mixed network -- Welfare analysis; Airlines -- Management -- Periodicals; Aeronautics, Commercial -- Management -- Periodicals; 387.7068
• DOI: 10.1016/j.jairtraman.2021.102028
• Languages: English
• ISSNs: 0969-6997

Abstract

Abstract: Emissions charges are an effective tool to control aviation carbon dioxide emissions. This paper investigates how airline emissions charges affect a monopoly airline's network choice. By considering simultaneously fully-connected, hub-spoke and mixed networks, we find that the impact of emissions charges on airline network configuration depends crucially on some relevant parameters, for example, the marginal benefit of the reduction of schedule delays and the disutility of additional travel time of connecting flights. Welfare analysis shows a discontinuity in the network configuration from the social planner's perspective and an inefficiency related to the airline's choice on mixed network. Highlights: We study how emissions charges affect the network choice of a monopoly airline. The fully-connected, hub-spoke and mixed networks are considered. The effect of emissions charges on network choice depends on other parameters. There exists a discontinuity in the socially optimal network. The airline may inefficiently choose the mixed network.