Passenger air traffic in Europe has seen considerable growth in the past decades. The market-entry of Low-Cost-Carriers (LCC) has extended the traditional markets of Network Carriers (NC) and Charter-Airlines (CA) by offering low fares to a broad public, which otherwise would not fly. Given the fact that air traffic now accounts for about 3% of total CO2-emissions, this strong traffic increase gave uplift to supporters of a kerosene tax. An environmental tax on kerosene would internalize external effects of air travel and therefore give an incentive to airlines to use the most modern aircrafts and engines as well as to optimize their network structure. At first this paper examines the economic as well as the international legal basis for a tax on kerosene. By assigning monetary values to the emissions of air traffic it is then possible to determine three possible tax levels (low, medium and high). Subsequently the cost structure of different carrier models is investigated and the impact of a tax on the cost of different flight hauls is estimated. By adding the additional costs onto the current fares of air carriers it is examined by how much, the actual ticket prices would rise. Afterwards these fares increases are set in relation with price elasticities of different customer segments, which gives an insight on the passenger reductions that the different carriers would suffer. Finally it is also examined how a tax would change the existing market shares of carrier types on different segments. These calculations are done for two possible tax areas: while in the first one only kerosene of intra-EU flights is subject of the tax, in the latter all kerosene which is taken on board within the EU would be charged. The results indicate that in the short and medium haul segment LCC would be worst hit. (...)(author's abstract) / Series: Schriftenreihe des Instituts für Transportwirtschaft und Logistik - Verkehr
| Identifer | oai:union.ndltd.org:VIENNA/oai:epub.wu-wien.ac.at:epub-wu-01_1061 |
| Date | January 2006 |
| Creators | Badura, Felix |
| Publisher | Institut für Transportwirtschaft und Logistik, WU Vienna University of Economics and Business |
| Source Sets | Wirtschaftsuniversität Wien |
| Language | German |
| Detected Language | English |
| Type | Paper, NonPeerReviewed |
| Format | application/pdf |
| Relation | http://epub.wu.ac.at/776/ |
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