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Flying more efficiently: joint impacts of fuel prices, capital costs and fleet size on airline fleet fuel economy

Author

Listed:
  • Zsuzsanna Csereklyei
  • David I. Stern

    (Arndt-Corden Department of Economics, Crawford School of Public Policy, The Australian National University)

Abstract

We investigate the factors that affect airlines’ choice of fleet fuel economy using plane- level data for 1267 airlines in 174 countries. Larger and newer planes are usually more fuel- efficient. Controlling for the effect of aircraft size and age, we find that the technically achievable fleet fuel economy improves with the size of airlines and the price of fuel and worsens with higher capital costs. The elasticity of fuel economy with respect to the price of fuel is between -0.07 and -0.13. We find evidence for regional differences in fleet fuel economy that are attributable to the adoption of distinct groups of technologies.

Suggested Citation

  • Zsuzsanna Csereklyei & David I. Stern, 2018. "Flying more efficiently: joint impacts of fuel prices, capital costs and fleet size on airline fleet fuel economy," CCEP Working Papers 1810, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:ccepwp:1810
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Annual Review 2020
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2020-12-19 07:18:00
    2. Annual Review 2020
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2020-12-19 07:18:00

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    2. Spiritus, Kevin & Lehmann, Etienne & Renes, Sander & Zoutman, Floris T., 2025. "Optimal taxation with multiple incomes and types," Theoretical Economics, Econometric Society, vol. 20(2), May.
    3. Bin Xu, 2022. "How to Efficiently Reduce the Carbon Intensity of the Heavy Industry in China? Using Quantile Regression Approach," IJERPH, MDPI, vol. 19(19), pages 1-24, October.
    4. Kito, Minami, 2021. "Impact of aircraft lifetime change on lifecycle CO2 emissions and costs in Japan," Ecological Economics, Elsevier, vol. 188(C).
    5. Mollick, André Varella & Amin, Md Ruhul, 2021. "Occupancy, oil prices, and stock returns: Evidence from the U.S. airline industry," Journal of Air Transport Management, Elsevier, vol. 91(C).
    6. Yu Wang & Kaibo Yuan & Mengyuan Zhu & Shuijin Li, 2023. "A Time-and-Space-Network-Based Green Fleet Planning Model and Its Application for a Hub-and-Spoke Network," Sustainability, MDPI, vol. 15(7), pages 1-26, March.
    7. Inan, Ilker & Orhan, Ilkay & Ekici, Selcuk, 2025. "Fuel savings strategies for sustainable aviation in accordance with United Nations Sustainable Development Goals (UN SDGs)," Energy, Elsevier, vol. 320(C).
    8. Katagiri, Kazuaki & Takiya, Toshio & Tanigawa, Masayuki & Furutera, Masaharu, 2024. "Analysis of the impact of economic conditions on passenger aircraft orders and deliveries using the Fourier transform," Journal of Air Transport Management, Elsevier, vol. 119(C).
    9. Ullah, Aziz & Biao, He & Sarwar, Suleman & Wu, Zhongshu, 2025. "Transmission of oil price risk to airline stock returns: Evidence from China and the United States," Research in Transportation Economics, Elsevier, vol. 110(C).
    10. Wandelt, Sebastian & Signori, Andrea & Chang, Shuming & Wang, Shuang & Du, Zhuoming & Sun, Xiaoqian, 2025. "Unleashing the potential of operations research in air transport: A review of applications, methods, and challenges," Journal of Air Transport Management, Elsevier, vol. 124(C).
    11. Valeriy V. Iosifov & Pavel D. Ratner, 2021. "Climate Policies of G20 and New Threats for Russian Energy and Transportation Complex," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 478-486.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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