Working Paper: NBER ID: w22830
Authors: Matthew E. Kahn; Jerry Nickelsburg
Abstract: Airline transport generates a growing share of global greenhouse gas emissions but as of late 2016, this sector has not faced U.S. fuel economy or emissions regulation. At any point in time, airlines own and lease a set of durable vehicles and have invested in human and physical capital and an inventory of parts to maintain these vehicles. Each airline chooses whether to scrap and replace airplanes in their fleet and how to utilize and operate their fleet of aircraft. We model these choices as a function of real jet fuel prices. When jet fuel prices are higher, airlines fly fuel inefficient planes slower, scrap older fuel inefficient planes earlier and substitute miles flown to their more fuel efficient planes.
Keywords: airline fuel economy; jet fuel prices; greenhouse gas emissions; fleet utilization; aircraft replacement
JEL Codes: L11; L62; R4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| jet fuel prices (L93) | frequency of less fuel-efficient aircraft utilization (L93) |
| jet fuel prices (L93) | flying speeds (L93) |
| jet fuel prices (L93) | fleet turnover (L92) |
| price of flying a passenger mile (L93) | mileage flown by aircraft (L93) |