Effects of environmental regulations on air transport demand

Efectes de les regulacions ambientals sobre la demanda de transport aeri

Full Papers del 4rt Congrés d’Economia i Empresa de Catalunya

One of the challenges facing aviation is the reduction of its environmental impact, which necessarily involves an increase in fares. In this context, the article estimates what price increases would be necessary to achieve different objectives for changing the number of passengers. Based on the estimation of a demand model, and under different scenarios, the study shows that the price increase necessary to achieve zero or negative growth in the number of passengers on flights from Barcelona and Madrid to the United States would have to be high, between 3 and 5 percentage points more each year compared to a scenario of no action. This discussion is relevant in the current debate on the advisability of expanding Barcelona airport. The evaluation of the expansion should take into account that the traffic growth of recent years cannot be expected to the extent that environmental concerns will become even more relevant.

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