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First published online January 1, 2012

Role of Air Travel Demand Elasticities in Reducing Aviation's Carbon Dioxide Emissions: Evidence for European Airlines

Jarlath Molloy, Patricia C. Melo [email protected], Daniel J. Graham, Arnab Majumdar, and Washington Y. OchiengView all authors and affiliations
Volume 2300, Issue 1
https://doi.org/10.3141/2300-04

Abstract

This paper develops a new set of European air travel demand elasticities with data from the International Civil Aviation Organization; a new database was constructed in the context of examining the role for dynamic demand management in reducing aviation carbon dioxide (CO2) emissions. The results indicate that air travel demand appears to be fairly price inelastic, with a fare elasticity of 20.29% in the short run and 20.44% in the long run. As a result, demand management strategies focused solely on increasing air fares may do little to curb demand growth. In contrast, supply restrictions in the form of reduced service frequencies may offer a more effective means of reducing aviation CO2 emissions—a 10% reduction in frequency levels is found to reduce passenger demand by 5% in the short run and 7.6% in the long run—although such restrictions can create negative economic consequences. A combination of supply restrictions and pricing may offer a more balanced solution.

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Volume 2300, Issue 1
Pages: 31 - 41
Article first published online: January 1, 2012
Issue published: January 2012

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Jarlath Molloy
Centre for Transport Studies, Department of Civil and Environmental Engineering, Imperial College London, London SW7 2AZ, United Kingdom.
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Patricia C. Melo
Railway and Transport Strategy Centre, Centre for Transport Studies, Department of Civil and Environmental Engineering, Imperial College London, London SW7 2AZ, United Kingdom.
[email protected]
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Daniel J. Graham
Railway and Transport Strategy Centre, Centre for Transport Studies, Department of Civil and Environmental Engineering, Imperial College London, London SW7 2AZ, United Kingdom.
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Arnab Majumdar
Centre for Transport Studies, Department of Civil and Environmental Engineering, Imperial College London, London SW7 2AZ, United Kingdom.
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Washington Y. Ochieng
Centre for Transport Studies, Department of Civil and Environmental Engineering, Imperial College London, London SW7 2AZ, United Kingdom.
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