Addressing the correct elasticit y to the appropriate appropriate question
This report shows how the sensitivity of air travel demand to prices and incomes can vary according to different situations. Therefore, the appropriate elasticity to use will depend upon the level of aggregation and the location of an air transport policy proposal. For example:
At the Route level.• To examine the impact of an increase in airport landing fees on a particular short-haul market in South America, the price elasticity would be derived as:
Base elasticity -1.4 (route)
multiplied by 1.25 (intra South America)
multiplied by 1.1 (short-haul multiplier)
which equals -1.93
A 10% rise in the airport landing fee would reduce passenger numbers on short-haul markets serving that airport by over 19%.
At the National level.• To look at the impact of the doubling of UK passenger tax on trans Atlantic traffic, the price elasticity would be derived as follows:
Base elasticity -0.8 (national)
multiplied by 1.2 (trans Atlantic geographical multiplier) which equals -0.96
For outbound traffic from the UK this implies the resulting 3.7% rise in the cost of long-haul travel will cut demand by 3.6%. For inbound traffic from N America the UK only represents a 20% market share, so while the UK will lose inbound tourists many will just be diverted to other destinations.
At the Supra-national level. • To look at the demand impacts of higher travel costs caused by extending the EU Emissions Trading Scheme just to intra-EU travel i.e. short-haul markets, the relevant price elasticity would be derived as follows:
Base elasticity -0.6 (supra-national) multiplied by 1.4 (intra-Europe geographic multiplier) multiplied by 1.1 (short-haul multiplier) which equals -0.92
So a 10% rise in intra-EU travel costs would lead to a relative inelastic 9.2% reduction in air travel.
Demand Elasticities and Environmental Policy
The focus of existing policy to reduce CO2 emissions from air travel has been on trying to manage air travel demand by raising the price of travel for passengers. Even the recent debate on emissions trading in Europe has focused on the costs it will impose on airlines and their passengers.
The results contained in this report show that policies that aim to reduce emissions by managing demand, through raising the price of air travel, are likely to fail. Tourists are shown to be very sensitive to prices for air travel on competing airlines or to alternative destinations. However, at the national or supra-national level these choices cancel each other out and the overall market is much less sensitive to the cost of air travel. It is economic growth and incomes that are found to have been the key drivers of air travel demand, and those drivers are expected to remain particularly strong in the developing markets of Asia. Decoupling emissions from travel growth needs to focus not on demand management but on mechanisms to bring about emission reduction measures from technology, infrastructure and operations.
Climate policies will need to focus on creating incentives where there can be effective investment in emissions reductions. The major potential would appear to be on decoupling emissions from travel growth, through supply-side innovations, rather than trying to manage demand through raising the price of travel.
There is a need to look beyond rudimentary economic instruments (e.g. passenger taxes) that seek to manage demand by raising the price of travel for the passenger in order to incentivise effectively the various players along the air transport value chain who can invest in emission reduction.
IATA’s four pillar climate strategy12, which was endorsed by the Assembly of the International Civil Aviation Organisation in 2007, focuses action on emission reduction measures from technology, infrastructure, operations and those brought about by well designed economic instruments.
ที่อยู่ Addressing the correct elasticit y to the appropriate appropriate question
ที่ถูกต้องกับคำถามที่เหมาะสมที่เหมาะสมรายงานนี้แสดงให้เห็นว่ามีความไวของความต้องการการเดินทางทางอากาศราคาและรายได้จะแตกต่างกันไปตามสถานการณ์ที่แตกต่างกัน ดังนั้นความยืดหยุ่นเหมาะสมที่จะใช้จะขึ้นอยู่กับระดับของการรวมและที่ตั้งของข้อเสนอนโยบายการขนส่งทางอากาศที่ This report shows how the sensitivity of air travel demand to prices and incomes can vary according to different situations. Therefore, the appropriate elasticity to use will depend upon the level of aggregation and the location of an air transport policy proposal. For example:
At the Route level.• To examine the impact of an increase in airport landing fees on a particular short-haul market in South America, the price elasticity would be derived as:
Base elasticity -1.4 (route)
multiplied by 1.25 (intra South America)
multiplied by 1.1 (short-haul multiplier)
which equals -1.93
A 10% rise in the airport landing fee would reduce passenger numbers on short-haul markets serving that airport by over 19%.
At the National level.• To look at the impact of the doubling of UK passenger tax on trans Atlantic traffic, the price elasticity would be derived as follows:
Base elasticity -0.8 (national)
multiplied by 1.2 (trans Atlantic geographical multiplier) which equals -0.96
For outbound traffic from the UK this implies the resulting 3.7% rise in the cost of long-haul travel will cut demand by 3.6%. For inbound traffic from N America the UK only represents a 20% market share, so while the UK will lose inbound tourists many will just be diverted to other destinations.
At the Supra-national level. • To look at the demand impacts of higher travel costs caused by extending the EU Emissions Trading Scheme just to intra-EU travel i.e. short-haul markets, the relevant price elasticity would be derived as follows:
Base elasticity -0.6 (supra-national) multiplied by 1.4 (intra-Europe geographic multiplier) multiplied by 1.1 (short-haul multiplier) which equals -0.92
So a 10% rise in intra-EU travel costs would lead to a relative inelastic 9.2% reduction in air travel.
Demand Elasticities and Environmental Policy
The focus of existing policy to reduce CO2 emissions from air travel has been on trying to manage air travel demand by raising the price of travel for passengers. Even the recent debate on emissions trading in Europe has focused on the costs it will impose on airlines and their passengers.
The results contained in this report show that policies that aim to reduce emissions by managing demand, through raising the price of air travel, are likely to fail. Tourists are shown to be very sensitive to prices for air travel on competing airlines or to alternative destinations. However, at the national or supra-national level these choices cancel each other out and the overall market is much less sensitive to the cost of air travel. It is economic growth and incomes that are found to have been the key drivers of air travel demand, and those drivers are expected to remain particularly strong in the developing markets of Asia. Decoupling emissions from travel growth needs to focus not on demand management but on mechanisms to bring about emission reduction measures from technology, infrastructure and operations.
Climate policies will need to focus on creating incentives where there can be effective investment in emissions reductions. The major potential would appear to be on decoupling emissions from travel growth, through supply-side innovations, rather than trying to manage demand through raising the price of travel.
There is a need to look beyond rudimentary economic instruments (e.g. passenger taxes) that seek to manage demand by raising the price of travel for the passenger in order to incentivise effectively the various players along the air transport value chain who can invest in emission reduction.
IATA’s four pillar climate strategy12, which was endorsed by the Assembly of the International Civil Aviation Organisation in 2007, focuses action on emission reduction measures from technology, infrastructure, operations and those brought about by well designed economic instruments.
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