An Economic Analysis of U.S Airline Fuel Economy Dynamics from 1991 to 2015

Matthew Kahn and Jerry Nickelsburg

No 22830, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: L11 L62 R4 (search for similar items in EconPapers)
Date: 2016-11
New Economics Papers: this item is included in nep-ene, nep-reg, nep-res and nep-tre
Note: EEE IO
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Citations: View citations in EconPapers (5)

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