Airline emissions charges and airline networks

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.     

Berth allocation considering fuel consumption and vessel emissions

We propose a more elaborate model on berth allocation considering fuel consumption than before, and overcome the nonlinear complexity by casting it as a mixed integer second order cone programming model. Furthermore, we conduct the vessel emission (in sailing periods) calculation with the widely-used emission factors. Besides, vessel emissions in mooring periods are also analyzed through a post-optimization phase on waiting time. Experimental results demonstrate that the new berth allocation strategy, reflected by the proposed model, is competent to significantly reduce fuel consumption and vessel emissions, while simultaneously retaining the service level of the terminal.     

A transport carbon footprint methodology to assess airport carbon emissions

Airports are important nodes in the air transport system, but also local sources of environmental impacts. Emissions of CO₂ are among the most relevant ones because of their potential greenhouse effects. Many policies and guidelines have been identified at national and world level to reduce such kind of impacts. In this paper, a Transport Carbon Footprint methodology has been set to identify Unit Carbon Footprints (UCFs) linked to some identified emission macro-sources – i.e., land vehicles, on-ground aircraft, airport handling and terminal equipment – to compute the contribution of the single macro-source to the total amount of CO₂. Particularly, UCFs due to transport activities have been defined according to some relevant transport variables. The computation of UCF values for a given airport allows computing both the contribution of each macro-source and also evaluating the effectiveness of transport-related actions aiming at reducing the carbon impact. The methodology has been applied to the airport of Bologna, in Northern Italy, and its UCF values for the identified macro-sources have been computed.     

Airline and railway integration

Most of the transport literature only looks at mode alternatives in competition with each other, rather than exploring the potential for cooperation. This paper examines this possibility by making the case for aircraft and high speed train (HST) substitution under conditions of intermodal integration. In the model suggested, airlines use railway services as additional spokes in their network of services from a hub airport to complement and substitute for existing aircraft services. Airlines benefit from the slots that are freed and they can support mode substitution. Society gains from the social and economic benefits of better integrated transport services at a lower environmental cost. This paper examines this model of integration at Heathrow airport against the background of UK air transport policy and assesses the benefits and limitations of it. The conclusion reached is that some railway infrastructure should also be seen as part of the air transport infrastructure.     

Airline frequent flyer programs: equity and attractiveness

The scheme of a frequent flyer program describes how travelers accumulate and redeem their frequent flyer miles in the program, and determines the amount of benefits travelers can receive from the program (e.g., number of free trips). In the US, there are three basic types of frequent flyer program schemes (standard, discount, and non-mileage schemes). This paper investigates, by type of traveler, which scheme is most (or least) attractive to customers, so that each airline can select the most appropriate (or attractive) scheme for its target audience. The study results imply that the “non-mileage” scheme may be most attractive to travelers with low average trip miles (flown miles per trip), while the “standard” scheme may be most attractive to travelers with high average trip miles.     

Hinterland operations of sea ports do matter: Dry port usage effects on transportation costs and CO2 emissions

Decreasing carbon dioxide (CO₂) emissions is one of the most important tasks for the society in the 21st century. One possibility to decrease emissions originating from transportation is to utilize more rails instead of relying simply on road transportation. In the dry port concept an inland intermodal terminal is connected to a sea port using railways. This study analyzes impacts of dry ports in a Finnish context. We compare two different configurations: In the first one shippers drive directly to a sea port, while in the second one they use dry ports. The systems are evaluated by using discrete-event simulation. In the systems we are interested in two issues: (1) Level of CO₂ emissions, and (2) Costs to transport the goods in different configurations. We use different scenarios for future energy prices and estimate both the costs and CO₂ emission development in these scenarios. We also compare the results to a situation, where emissions are minimized instead of costs. Implications on larger scale are also discussed, for example in the Baltic Sea and North Sea area, where strict sulfur emission restrictions are seen to harm sea transport and increase concentration on small number of sea ports.     

A fuel surcharge policy for reducing road traffic greenhouse gas emissions

This paper proposes a car pricing policy based on fuel surcharges in substitution of car ownership taxes for reducing greenhouse gas emissions by cars. The aim of the proposed policy is to change some (fixed) costs of car use that are not perceived at each trip into (variable) costs. The amount of fuel surcharges and the effects of their application on fuel consumption and on GHG emissions are estimated by a model that is able to relate gasoline and diesel consumption with fuel prices. The effects of the proposed policy on fuel consumption and on GHG emissions are estimated for Italy. The results show that car users prefer to shift towards more efficient fuel vehicles than to public transport, producing a significant, but less than expected, reduction of GHG emissions.     

Toward a global low carbon fuel standard

A new policy instrument, known as a low carbon fuel standard (LCFS), is a promising approach to decarbonize transportation fuels. An LCFS has several important features: it applies a lifecycle carbon intensity standard, incorporates market mechanisms by allowing credit trading and targets all transport fuels. A harmonized international framework is needed that builds on newly enacted LCFS policies adopted in California and the European Union.     

Airline alliances: cooperating to compete?

This paper examines the formation of alliances in the contemporary airline industry, comparing this with developments in business collaboration in industry generally. It identifies the main forces driving airlines into alliances, before considering the strategies that airlines are adopting in marketing joint services, and the policies that governments are pursuing in relation to the impact of alliances on the intensity of competition. One of the main arguments advanced is that alliances increase competition in through-markets via hubs, and that they can be expected to have pro-competitive effects in narrowing price-cost margins on long-haul services, something that can be traded against any lessening of competition in short-haul hub-to-hub markets.     

Airline demand distributions: passenger revenue management and spill

Both revenue management and airline schedule optimization need to characterize the distribution of likely demand outcomes. Sources have proposed both Gamma and Normal shapes for these distributions. Data suggests that a model combining both distributions is appropriate. The model explains when the Gamma shape will dominate and when the Normal will determine the shape. One consequence of this understanding is that Gamma shapes are probably better for revenue management and Normal for spill modeling. However, it takes a compound process combining the two to generate all the observed characteristics of various cases.     

Impacts of COVID-19 on aircraft usage and fuel consumption: A case study on four Chinese international airports

COVID-19 pandemic starting in early 2020 has greatly impacted human and industrial activities. Air transport in China shrank abruptly in February 2020, following a year-long gradual recovery. The airline companies reacted to this unprecedented event by dramatically reducing the flight volume and rearranging the aircraft types. As the first major economy that successfully controls the spread of COVID-19, China can provide a unique opportunity to quantify the medium-long impacts on the air transport industry. To quantify the corresponding changes and to elucidate the effects of COVID-19 in the wake of two major outbreaks centered in Wuhan and Beijing, we analyze twelve flight routes formed by four selected airports, using the Automatic Dependent Surveillance-Broadcast (ADS-B) data in 2019 and 2020. Our results show that the total flight volume in 2020 reduced to 67.8% of 2019 in China. The recovering time of flight volume was about 2–6 months, dependent on the severity. In order to unwind the severe challenge, airlines mainly relied on aircraft B738 and A321 between February and June in 2020 because the fuel consumption per seat of these two aircraft types is the lowest. Besides, fuel consumption and aircraft emissions are calculated according to the Base of Aircraft Data (BADA) and the International Civil Aviation Organization's Engine Emissions Databank (ICAO's EEDB). At the end of 2020, the ratios of daily fuel consumption and aircraft emissions of 2020 to 2019 rebounded to about 0.875, suggesting the domestic commercial flights were nearly fully recovered. Our results may provide practical guidance and meaningful expectation for commercial aircraft management for other countries.     

Airline ownership and control: A corporate governance perspective

Most countries require substantial domestic equity ownership of designated national airlines, yet changes in international capital markets have significantly altered the way control rights associated with equity are exercised. We argue that in a context of aviation deregulation and liberalization, a new generation of aviation financiers has appeared whose incentives and competence for control diminishes the relevance of the nationality provisions contained in most bilateral agreements. The paper describes recent developments in ownership and control and its impact on airline management.     

Airline alliance survival analysis: typology,strategy and duration

Alliances have become the organization model of choice in many industries. This study uses data from the Airline Business annual surveys of airline alliances to test a proposed typology predicting survival and duration in airline alliances. The Rhoades-Lush typologies classified key activities of airline alliances by their level of complexity and resource commitment in order to suggest a series of propositions on alliance stability and duration. The results of our analysis indicate that alliances containing joint purchasing and marketing activities had lower risk of termination than alliances involving equity. Furthermore, alliances spanning more than two typologies showed lower risk of termination than one and two typology alliances. This is explained as the ‘strategy effect’ or in other words the tendency of alliances wide in scope to be more resistant to early termination.     

Potential for reducing carbon emissions from urban traffic based on the carbon emission satisfaction: Case study in Shanghai

The transport sector has attracted much attention as one of the main sources of carbon emissions. In this study, we constructed an optimal urban traffic structure model based on the concept of carbon emission satisfaction in order to estimate the absolute carbon emission reductions that can be achieved, and to objectively analyze the relative difficulty of achieving the emissions reduction goal. By considering Shanghai as an example, we found that rail transit is the dominant mode of transportation and that the proportion of travel in private cars can be greatly reduced, but buses should be maintained at the current level, whereas the proportion of taxis may be reduced slightly. In the existing traffic environment in Shanghai, after optimizing the urban traffic structure, we found that 47.62% of the carbon emissions reduction target can be achieved. However, given the excessive attention paid to the satisfaction of individuals and the government but the lack of consideration of the ecological environment, the carbon emission satisfaction with respect to urban traffic is low at present in Shanghai. Improving the carbon emission satisfaction by reducing the satisfaction of other targets is difficult, and the potential for reducing carbon emissions is limited for transportation. Therefore, Shanghai can only achieve its carbon emission reduction targets by implementing resource allocation, transportation technology, and urban planning measures in order to improve the existing traffic conditions, thereby achieving the goal of reducing carbon emissions but without affecting the satisfaction of other targets.     

Airline route developments: a review of history

Airline route networks can carry growing traffic volumes by using larger airplanes, by adding frequencies on existing routes, and by adding new routes. The natural expectation has been that growth will come in all three dimensions in the listed order of importance. The last 15 years of route growth suggests otherwise. Growth has been accompanied by shifts to smaller airplane sizes. New routes have been about as strong a development as added frequencies on existing routes. It seems that network growth patterns cannot be anticipated based on intuition alone. Such unexpected results require substantial evidence in support plus some explanation of the reasons why. This paper offers data and some explanations that begin the discussion.     

Modeling fuel saving investments and fleet management in the trucking industry: The impact of shipment performance on GHG emissions

Much has been written about the potential of technologies to reduce the greenhouse gas (GHG) emissions of trucking, but much less on the determinants of these investments. The Trucking Sector Trip Segmentation Model (TSTS) predicts how firms make these investments in the context of operating heterogeneous truck fleets to service the spatially dispersed demand of shippers. This analysis suggests that improving the performance of trucking (speeding up shipments) could reduce significantly GHG emissions: investments in technologies are incentivized by fuel savings accruing sooner. This effect could be potentially large in the US as trucking firms often discount the future heavily.     

Airline in-flight entertainment: the passengers’ perspective

Following relaxation of economic regulation in many aviation markets, the competition amongst airlines has intensified in recent years. This has resulted in improvements in airline products, especially in the in-flight services. One of the areas on which airlines have focused their attention is the provision of personal in-flight entertainment (IFE). In 1998, airlines spent $1.8 billion on IFE. However, the industry is faced with a number of questions in relation to such levels of investment: Are the investments justified? Does IFE influence passengers’ choice of airline? Does IFE have a revenue-generating potential? What does the future hold as far as the IFE services are concerned? This paper addresses these questions based on a passengers survey and literature review. The results indicate that while IFE is not amongst the primary factors affecting passengers’ choice, it contributes greatly to passengers’ satisfaction with airline services. While provision of IFE can currently act as a differentiating factor, in the future it will become part of passengers’ expectations. It has also become apparent that, while IFE has the potential to generate some revenue, it would not be enough to cover the total costs associated with the installation and running of IFE systems. The impact of IFE would be felt, indirectly, through increase in passenger loyalty which should have a positive impact on airline revenues.     

Flying into the future: A scenario-based analysis of carbon emissions from China's civil aviation

Aviation emissions will significantly affect climate change with the continued growth of the air transport. This study decomposes the drivers influencing China's civil aviation carbon emissions change in the period from 1985 to 2015. Emission trends are predicted using a Monte Carlo simulation. The results show a peak and reduction in the period between 2016 and 2030. Results also show that air transportation revenue growth is associated with increasing historical carbon emissions, while rising industry energy intensity significantly hampers carbon emissions reduction. The carbon intensity (CI) reduction goals were achieved in the different scenarios before 2020, but the carbon emissions peak target before 2030 can only be achieved under the technological breakthrough scenario (TBS). The reduction of air transport growth rate and promotion of new energy technologies are two essential strategies to reduce carbon emissions in the foreseeing future.     

Airline network structure and the gravity model

In this paper, we determine characteristics of the cost-minimizing airline network under economies of density. Airline demand is asymmetric and governed by the gravity model. Airline networks are restricted to those where each spoke city is assigned to a single hub and where hub cities are fully interconnected. The cost-minimizing network is a mixture of a point-to-point and a single hub network. Multi-hub networks where passengers change planes at more than one airport are found to be suboptimal.     

The carbon emissions of selected airlines and aircraft types in three geographic markets

Various carbon calculators developed by airlines and carbon offset companies have become available since the environmental impact of the air transport industry started to receive strong attention. This paper details a prototype methodology for carbon calculation emission levels in the three air transport markets; the UK domestic routes, the intra-EU routes serving UK and the North Atlantic routes that enables the assessment of key environmental performance differences between air carriers whereas they would be measured as identical using the often used DEFRA-type measurement approach. The results show differences in airlines' strategies such as aircraft type used, load factors and seat configurations.