Methodologies to monetize the variations in load factor and GHG emissions per passenger-mile of airlines

Global GHG emissions from air travel are currently at 3% and it could increase to 15% of the total GHG emissions by 2050. To curb the growth of GHG emissions from air travel, the U.S. Federal Aviation Administration (FAA) has created a policy to achieve carbon neutral growth by 2020 relative to the 2005 baseline. If the airline industry is to both grow and meet the objectives set by this policy, new and innovative aircraft designs, operational efficiencies, and widespread use of alternate fuels are required. To accomplish this would require large research and development investment. The federal government and state governments have passed legislations that provide tax breaks and other incentives to encourage investments in new technologies. One such tax policies is cap and trade system. This had partial success in reducing GHG emissions in certain industries but was not successful in the airline industry. This paper presents alternate methods to raise capital to invest in GHG emissions reduction projects in the airline sector. The four methodologies presented here monetizes the GHG emissions resulting from differences in load factor (ratio of number of passengers to number of seats) and GHG emissions per passenger-mile among different airlines, among different flight sectors, etc. to raise the capital. Based on 2012 air travel data, these methodologies could raise more than $300 million dollars annually to invest in GHG emissions reduction projects.     

Comparing the impact of future airline network change on emissions in India and the United States

In this paper we use simulation to analyze how flight routing network structure may change in different world regions, and how this might impact future traffic growth and emissions. We compare models of the domestic Indian and US air transportation systems, representing developing and mature air transportation systems respectively. We explicitly model passenger and airline decision-making, capturing passenger demand effects and airline operational responses, including airline network change. The models are applied to simulate air transportation system growth for networks of 49 airports in each country from 2005 to 2050. In India, the percentage of connecting passengers simulated decreases significantly (from over 40% in 2005 to under 10% in 2050), indicating that a shift in network structure towards increased point-to-point routing can be expected. In contrast, very little network change is simulated for the US airport set modeled. The simulated impact of network change on system CO₂ emissions is very small, although in the case of India it could enable a large increase in demand, and therefore a significant reduction in emissions per passenger (by nearly 25%). NO_x emissions at major hub airports are also estimated, and could initially reduce relative to a case in which network change is not simulated (by nearly 25% in the case of Mumbai in 2025). This effect, however, is significantly reduced by 2050 because of frequency competition effects. We conclude that network effects are important when estimating CO₂ emissions per passenger and local air quality effects at hub airports in developing air transportation systems.     

A tool for calculating aircraft emissions and its application to Greek airspace

This paper quantifies the impact of aircraft emissions on local air quality and climate change. Aircraft emissions during the cruise cycle and the landing/take-off cycle are considered. A tool is developed that computes emission values using real-time air traffic data derived from various databases. Emissions include carbon dioxide, hydrocarbons, carbon monoxide and nitrogen oxides. The overall output is a detailed ‘emissions map’ of a given territory that enables the identification of critical emission spots including routes, airports, season, aircraft type and flight category. The method can be used for real-time monitoring of airline emissions and for policy analysis. The proposed tool and resulting outputs are illustrated in the case of the Greek airport system using domestic, international and overflights. Demand volatility driven mainly by tourism and its impact on emissions is assessed.     

Assessment of carbon emission costs for air cargo transportation

This study presents a set of models that calculate carbon emissions in individual phases of flight during air cargo transportation, investigates resultant carbon footprints by aircraft type and flight route, and estimates increases in transportation costs for airlines due to carbon taxes imposed by the EU ETS. The estimated results provide useful references for airlines in aircraft assignment on different routes and in aircraft selection for new purchases. Validation of the model is conducted by simulating the potential impact of the implementation of the EU ETS on costs of air cargo transportation for six routes and six types of aircraft. Results show that the impact may be subject to various factors including unit carbon emissions per aircraft, aviation emission allowances per airline, and carbon trading prices; and that increases in costs of air cargo transportation range from 0% to 5.27% per aircraft per route. Therefore, the implementation of the EU ETS may encourage airlines to cut down their operating costs by reducing their carbon emissions, thereby ameliorating greenhouse gas pollution caused by air cargo transportation.     

Traffic assignment considering air quality

This paper presents a methodology of assigning traffic in a network with the consideration of air quality. Traffic assignment is formulated as an optimization problem considering travel cost and on-road emissions. It introduces a cell-based approach to model emission concentrations so that either the average or maximum emissions in a network can be considered in the optimization process. The emissions in a cell are modeled taking into consideration the influence of the emission sources from all cells in the network. A case study demonstrates that minimizing travel cost and reducing air pollutants may not be always achieved simultaneously. The traffic assignment procedure can effectively reduce emission concentrations at those locations with the worst air quality conditions, with only a marginal increase in travel time and average emission concentration in the network.     

Evaluating locational accessibility to the US air transportation system

Although there are hundreds of airports that support commercial air passenger traffic in the United States (US), not all areas are equivalently served by the commercial air transportation system. Locations in the US differ with respect to their level of access to the commercial air network and their overall accessibility within the system. Given the complexity of the domestic commercial air passenger network and supporting infrastructure, past research has only been able to provide a limited assessment of locational accessibility within the United States. To address these complexities, this paper proposes a new metric that incorporates measures of access to air transport as well as accessibility within air transportation networks. Using a comprehensive dataset on scheduled airline service, the developed approach is then applied to the US domestic commercial passenger air transportation network to explore geographic differentials in accessibility. Results suggest marked differences between core-based statistical areas throughout the US.     

High-speed rail and air transport competition and cooperation: A vertical differentiation approach

This paper considers vertical differentiation between air transport and high-speed rail (HSR) with different ranges of travel distance to analyze the air-HSR competition effects on fares, traffic volumes and welfare, as well as the conditions under which air-HSR cooperation is welfare-enhancing. The analysis is conducted in a hub-and-spoke network with a network carrier, an HSR operator, and a spoke airline, taking into account potential hub airport capacity constraint. We find that air-HSR competition in the connecting market may result in the network airline charging an excessively high price in the HSR-inaccessible market. This effect is present even when the HSR-inaccessible route is a duopoly-airline market. On the other hand, air-HSR cooperation increases fares in the connecting market, and an improvement in rail speed or air-HSR connecting time reduces airfare on the routes where HSR and the airline compete. When the airline cannot serve all the markets due to limited hub airport capacity, it would withdraw from the market in which it has less competitive advantage over HSR. Finally, air-HSR cooperation is more likely to be welfare-improving when the hub airport is capacity constrained, and when either air transport or HSR exhibits strong economies of traffic density.     

Effects of high-speed rail and airline cooperation under hub airport capacity constraint

This paper analyzes the effects of cooperation between a hub-and-spoke airline and a high-speed rail (HSR) operator when the hub airport may be capacity-constrained. We find that such cooperation reduces traffic in markets where prior modal competition occurs, but may increase traffic in other markets of the network. The cooperation improves welfare, independent of whether or not the hub capacity is constrained, as long as the modal substitutability in the overlapping markets is low. However, if the modal substitutability is high, then hub capacity plays an important role in assessing the welfare impact: If the hub airports are significantly capacity-constrained, the cooperation improves welfare; otherwise, it is likely welfare reducing. Through simulations we further study the welfare effects of modal asymmetries in the demands and costs, heterogeneous passenger types, and economies of traffic density. Our analysis shows that the economies of traffic density alone cannot justify airline–HSR cooperation.     

Air transportation in a carbon constrained world: Long-term dynamics of policies and strategies for mitigating the carbon footprint of commercial aviation

With increasing demand for air transportation worldwide and decreasing marginal fuel efficiency improvements, the contribution of aviation to climate change relative to other sectors is projected to increase in the future. As a result, growing public and political pressures are likely to further target air transportation to reduce its greenhouse gas emissions. The key challenges faced by policy makers and air transportation industry stakeholders is to reduce aviation greenhouse gas emissions while sustaining mobility for passengers and time-sensitive cargo as well as meeting future demand for air transportation in developing and emerging countries. This paper examines five generic policies for reducing the emissions of commercial aviation; (1) technological efficiency improvements, (2) operational efficiency improvements, (3) use of alternative fuels, (4) demand shift and (5) carbon pricing (i.e. market-based incentives). In order to evaluate the impacts of these policies on total emissions, air transport mobility, airfares and airline profitability, a system dynamics modeling approach was used. The Global Aviation Industry Dynamics (GAID) model captures the systemic interactions and the delayed feedbacks in the air transportation system and allows scenarios testing through simulations. For this analysis, a set of 34 scenarios with various levels of aggressiveness along the five generic policies were simulated and tested. It was found that no single policy can maintain emissions levels steady while increasing projected demand for air transportation. Simulation results suggest that a combination of the proposed policies does produce results that are close to a “weak” sustainability definition of increasing supply to meet new demand needs while maintaining constant or increasing slightly emissions levels. A combination of policies that includes aggressive levels of technological and operations efficiency improvements, use of biofuels along with moderate levels of carbon pricing and short-haul demand shifts efforts achieves a 140% increase in capacity in 2024 over 2004 while only increasing emissions by 20% over 2004. In addition, airline profitability is moderately impacted (10% reduction) compared to other scenarios where profitability is reduced by over 50% which pose a threat to necessary investments and the implementation of mitigating measures to reduce CO2 emissions. This study has shown that an approach based on a portfolio of mitigating measures and policies spanning across technology and operational improvements, use of biofuels, demand shift and carbon pricing is required to transition the air transportation industry close to an operating point of environmental and mobility sustainability.     

Should subsidies to urban passenger transport be increased? A spatial CGE analysis for a German metropolitan area

In many countries passenger transport is significantly subsidized in a variety of ways for various reasons. The objective of this paper is to examine efficiency, distributional, environmental (CO₂ emissions) and spatial effects of increasing different kinds of passenger transport subsidies discriminating between household types, travel purposes and travel modes. The effects are calculated by applying a numerical spatial general equilibrium approach calibrated to an average German metropolitan area. In extension to most studies focusing on only one kind of subsidy, we compare the effects of different transport subsidies within the same unified framework that allows to account for two features not yet considered simultaneously in studies on transport subsidies: endogenous labor supply and location decisions. Furthermore, congestion, travel mode choice, travel related CO₂ emissions and institutional details regarding the tax system in Germany are taken into account. The results suggest that optimal subsidy levels are either small or even zero. While subsidizing public transport is welfare enhancing, subsidies to urban road traffic reduce aggregate urban welfare. Concerning the latter it is shown that making investments in urban road infrastructure capacity or reducing gasoline taxes may even be harmful to residents using predominantly automobile. In contrast, pure commuting subsidies hardly affect aggregate urban welfare, but distributional effects are substantial. All policies cause suburbanization of city residents and (except for subsidizing public transport) contribute to urban sprawl by raising the spatial imbalance of residences and jobs but the effect is relatively small. In addition, the policies induce a very differentiated pattern regarding distributional effects, benefits of landowners and environmental effects.     

Personal tradable carbon permits for road transport: Why, why not and who wins?

Personal road transport sector poses a significant challenge in reducing carbon emissions. This paper evaluates a policy approach known as personal tradable carbon permits to reduce carbon emissions from personal vehicles. The policy is a downstream tradable permit where individuals are allocated carbon emission caps. The policy is qualitatively evaluated in the context of carbon taxes and some upstream tradable permit options. The biggest disadvantage of such a policy is the initial set up costs. Personal tradable permits, however, are more effective than carbon taxes and are also capable of stabilizing the gasoline prices faced by the consumers when the underlying oil prices fluctuate. Since equity effects are often a concern to policy makers, the effect of such personal carbon permits on the distribution of burden is quantified in a partial equilibrium framework for the US population. Different permit allocation strategies are investigated in this regard. Using US consumer expenditure survey data, and incorporating a differentiated price response for different households, we find that all three allocation strategies considered are progressive: a per adult based allocation is the most progressive, a per vehicle allocation nearer to proportional, and a per capita allocation in between the two. Personal tradable permits therefore take care of equity concerns directly through the design of the policy.     

Air transport and economic growth: a review of the impact mechanism and causal relationships

ABSTRACT

The impacts of air transport on the economy arise both directly, via activity in the aviation sector; and indirectly, via increased spending and wider economic benefits associated with improved access to resources, markets, technology and economic mass. Economic activity, in turn, supports and generates demand for air transport. Despite its potential importance, the reciprocal nature of the causal relationship between air transport and economic performance has remained somewhat understudied. This paper provides a synthesis review of the channels the aviation sector interacts with regional economy. The review focuses on quantitative studies that contribute to the state-of-the-art understandings of the causality. We find that the reciprocal causal relationship is more likely to prevail in less developed economies. For more developed economies, only one direction of the causality is recognised, which runs from air transport to economic growth. Especially substantial is the effect of airline enplanement on service-related employment. The reverse direction of the relationship is, however, not as significant as believed in a causal sense within the developed world. Therefore, cautions need to be taken when applying income elasticities (such as the elasticity of air passenger demand with respect to GDP) in air travel demand forecasting, which implicitly assumes that economic growth causally leads to air traffic increment. Based on the fundamental links between air transport and economic growth, some typical imperfections and inefficiencies in aviation markets are discussed and promising avenues for future research are proposed.     

Reducing the climate change impacts of aviation by restricting cruise altitudes

Two of the ways in which air travel affects climate are the emission of carbon dioxide and the creation of high-altitude contrails. One possible impact reduction strategy is to significantly reduce the formation of contrails. This could be achieved by limiting the cruise altitude of aircraft. If implemented, this could severely constrain air space capacity, especially in parts of Europe. In addition, carbon emissions would likely be higher due to less efficient aircraft operation at lower cruise altitudes. This paper describes an analysis of these trade-offs using an air space simulation model as applied to European airspace. The model simulates the flight paths and altitudes of each aircraft and is here used to calculate emissions of carbon dioxide and changes in the journey time. For a one-day Western European traffic sample, calculations suggest annual mean CO₂ emissions would increase by only 4% if cruise altitudes were restricted to prevent contrail formation. The change in journey time depended on aircraft type and route, but average changes were less than 1 min. Our analysis demonstrates that altitude restrictions on commercial aircraft could be an effective means of reducing climate change impacts, though it will be necessary to mitigate the increased controller workload conflicts that this will generate.     

Origin–destination synthesis for aviation network data: examining hub operations in the domestic and international US markets

Hub‐and‐spoke networking is a key feature of current aviation markets in which hubs, as connecting points, function to consolidate and redistribute flows. This indicates that observation of traffic on a segment does not necessarily convey information about the origin to destination routing of passenger journeys because of the unavoidable detours in the system. This paper examines the heterogeneity of the flow composition in domestic and international US markets, which in turn allows us to observe the variation of operations across major hubs. A modified Route Flow Estimator for origin–destination synthesis (or origin–destination matrix estimation) is designed to decompose the segment traffic into itinerary‐based passenger trips. Several public and commercial databases, which are easily accessible, are exploited (and reconciled) for the model in order to (i) generate possible trip itineraries using those segment markets, and (ii) link data‐driven operational conditions with the underlying segment flows. The results are validated with US domestic trip observations and empirical knowledge related to the air transportation system. Then, the variability of the hub operations is examined based on sensitivity tests using the model parameters. From the resolution of itinerary‐based estimates, we observe that major airports' hub operations are spatially uneven, particularly with respect to domestic and international connecting passengers. Copyright © 2017 John Wiley & Sons, Ltd.     

Short trips: An opportunity for reducing mobile-source emissions?

This paper examines how conversion of automobile trips of less than 3 miles to other transportation modes reduces emissions. Short trips contribute disproportionately to emissions because of cold starts. An analysis is conducted of short-trip behavior across the US using the 1995 Nationwide Personal Transportation Survey. The data is used to develop likely scenarios of mode conversions for short trips, which are then applied to estimate emission savings using MOBILE6 cold start and running emission factors for volatile organic compounds, nitrogen oxides, carbon monoxide, and carbon dioxide. The results suggest that reducing short auto trips would modestly reduce mobile source air pollution, but emission reductions are high compared to most federally-funded surface transportation interventions aimed at improving air quality. Enhanced the community pedestrian environment to encourage short trip mode conversion also produces co-benefits such as increased physical activity and subsequent reductions in chronic diseases.     

Traffic and emissions impact of congestion charging in the central Beijing urban area: A simulation analysis

Congestion charging is being considered as a potential measure to address the issue of substantially increased traffic congestion and vehicle emissions in Beijing. This study assessed the impact of congestion charging on traffic and emissions in Beijing using macroscopic traffic simulation and vehicle emissions calculation. Multiple testing scenarios were developed with assumptions in different charging zone sizes, public transit service levels and charging methods. Our analysis results showed that congestion charging in Beijing may increase public transit use by approximately 13%, potentially reduce CO and HC emissions by 60–70%, and reduce NOx emissions by 35–45% within the charging zone. However, congestion charging may also result in increased travel activities and emissions outside of the charging zone and a slight increase in emissions for the entire urban area. The size of charging zone, charging method, and charging rate are key factors that directly influence the impact of congestion charging; improved public transit service needs to be considered as a complementary approach with congestion charging. This study is used by Beijing Transportation Environment and Energy Center (BTEC) as reference to support the development of Beijing’s congestion charging policy and regulation.     

Environmental effects of a kilometre charge in road transport: an investigation for the Netherlands

This study discusses the potential environmental effects of a kilometre charge for car traffic in the Netherlands. This kilometre charge would replace the existing taxes on new cars and on car ownership. It would lead to a substantial increase in the variable costs of car use. It may lead to a doubling of these costs while at the same time the average costs of car use would not increase because the fixed taxes are strongly reduced. Four alternatives for the kilometre charge are formulated. These are estimated to lead to substantial reductions of energy and certain emissions.     

Price effects of airlines frequent flyer programs: The case of the dominant firm in Chile

Frequent flyer programs create a switching cost for the consumer and allow firms to obtain rents, for example, by exploiting the principal agent problem existing between the employee who travel and purchases the ticket and the employer paying for that ticket. In Chile LAN is the dominant airline in domestic markets and the only one that has a frequent flyer program (FFP); it faces some competition from two small carriers. Using a unique dataset for Chile, collected by ourselves from airlines websites in 2011 and 2012, we estimate the impact of the dominant airline FFP. For this purpose, we compare for each route the fares between airlines and between weekday trips (that accumulate full miles and are mainly for business purposes) and weekend trips (that accumulate less than full miles and are mainly for leisure purposes). The results show that the differential premium LAN is able to charge for weekday trips due to the FFP is around 35%. Three particularities of the Chilean market help the econometric identification: there is only one hub for all airlines (the capital city of Santiago), there is no business class in domestic flights, and none of the airlines is a low-cost carrier.     

The impact of speed post-processing methods on regional mobile emissions estimation

Average roadway segment travel speeds play an important role in estimating stabilized running vehicle emissions. Currently stabilized, or hot, running emissions are computed based on speeds produced during the travel demand modeling process. Speed data from the travel forecasting models are widely recognized as being insufficiently accurate for air quality purposes. Frequently post-processing techniques are seen as the most cost-effective means of improving the accuracy of the speed estimates. Using the Sacramento Metropolitan area, this paper focuses on the impacts of different speed post-processors on regional peak period emissions inventories. The results indicated that most post-processed speeds produce consistently and significantly higher running emissions, particularly in locations with heavy traffic. The observed differences in emissions between different types of post-processed speeds vary with congestion level, pollutant type and the underlying approach encapsulated in the speed post-processor calculations. The Sacramento case study suggests that the post-processor used to develop speeds for the purposes of calculating on-road emissions inventories can significantly influence the emissions inventories.     

Do social norms regarding carbon offsetting affect individual preferences towards this policy? Results from a stated choice experiment

This study investigates the idea that people’s willingness to offset flight-related carbon emissions is a function of the collective participation rate, which can be regarded as a social norm, towards carbon offsetting. Additionally, we reveal people’s preferences toward two other environmental policies; a baggage allowance and airline eco-efficiency index. A discrete choice experiment is designed and administrated among a sample of air travelers. The results indicate that carbon offsetting generates utility, with people gaining more utility when the collective participation rate is high. Additionally, it was found that the baggage allowance and the eco-efficiency index strongly influenced respondents’ airline choices. People also became more sensitivity towards a baggage allowance and the eco-efficiency label, when the collective offsetting rate was high.