Air Service Agreements, Connectivity and Emissions

The average energy efficiency of the aviation sector has increased by 2.7 percent per year since 2012, falling short of the 6 percent increase in demand. Optimizing routes by reducing the number of legs per flight is one way to complement technological advances in aircraft and fuels to reduce aviation's environmental footprint. The signature of Air Service Agreements (ASAs) allows airlines to reorganize their flight routes. They reshape the international route network in a more efficient way and ultimately reduce CO2 emissions per passenger. On the other hand, ASAs increase the demand for international flights, which may offset the reduction in overall CO2 emissions by airlines. Using unique data on airline tickets and ASAs in force during the period 2012-2019, we show that the considerable reduction in per-passenger CO2 emissions due to the re-organization of international flight routes induced by ASAs is overcompensated by the additional demand for less time-consuming and, hence, more comfortable international flights.