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Airline Fuel Efficiency: Assessment Methodologies and Applications in the U.S. Domestic Airline Industry

In: Airline Efficiency

Author

Listed:
  • Bo Zou
  • Irene Kwan
  • Mark Hansen
  • Dan Rutherford
  • Nabin Kafle

Abstract

Air carriers and aircraft manufacturers are investing in technologies and strategies to reduce fuel consumption and associated emissions. This chapter reviews related issues to assess airline fuel efficiency and offers various empirical evidences from our recent work that focuses on the U.S. domestic passenger air transportation system. We begin with a general presentation of four methods (ratio-based, deterministic frontier, stochastic frontier, and data envelopment analysis) and three perspectives for assessing airline fuel efficiencies, the latter covering consideration of only mainline carrier operations, mainline–subsidiary relations, and airline routing circuity. Airline fuel efficiency results in the short run, in particular the correlations of the results from using different methods and considering different perspectives, are discussed. For the long-term efficiency, we present the development of a stochastic frontier model to investigate individual airline fuel efficiency and system overall evolution between 1990 and 2012. Insight about the association of fuel efficiency with market entry, exit, and airline mergers is also obtained.

Suggested Citation

  • Bo Zou & Irene Kwan & Mark Hansen & Dan Rutherford & Nabin Kafle, 2016. "Airline Fuel Efficiency: Assessment Methodologies and Applications in the U.S. Domestic Airline Industry," Advances in Airline Economics, in: Airline Efficiency, volume 5, pages 317-353, Emerald Group Publishing Limited.
  • Handle: RePEc:eme:aiaezz:s2212-160920160000005012
    DOI: 10.1108/S2212-160920160000005012
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    Citations

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    Cited by:

    1. Killins, Robert N., 2020. "The impact of oil on equity returns of Canadian and U.S. Railways and airlines," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    2. Wang, Fan & Zhuo, Xiaopo & Niu, Baozhuang, 2017. "Strategic entry to regional air cargo market under joint competition of demand and promised delivery time," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 317-336.
    3. Thowayeb H. Hassan & Abu Elnasr E. Sobaih & Amany E. Salem, 2021. "Factors Affecting the Rate of Fuel Consumption in Aircrafts," Sustainability, MDPI, vol. 13(14), pages 1-16, July.

    More about this item

    Keywords

    Airline fuel efficiency; frontier models; data envelopment analysis; mainline and sub-carriers; routing circuity; C14; C23; C51; L93; D24;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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