The environmental implications of airlines' choice of aircraft size

One of the main outcomes of open skies policies is the importance of service frequency in the competition between airlines. To keep load factors high while offering high frequency service, airlines tend to reduce the size of the aircraft used. On short-haul routes this phenomenon is even more apparent, especially on routes between hub airports, even though these routes and airports are often congested. This choice of service frequency and aircraft size must have important environmental consequences that this paper aims to evaluate and quantify. The analysis considers local air pollution, climate change and noise impacts and aims to evaluate whether the competitive environment that drives airlines to offer high frequency service carries an environmental penalty. The analysis showed that increasing aircraft size and adjusting the service frequency to offer similar seating capacity will increase local pollution but decrease climate change impact and noise pollution. When local pollution and climate change impacts are monetized and aggregated the analysis showed that environmental benefits will result from increasing aircraft size. But these benefits, in monetary terms, were found to be relatively small and sensitive to the assumptions made.