For the airline industry, achieving a lower impact on climate in the future will undoubtedly require a significant amount of time and effort. One potential solution to address this challenge is the implementation of regulations that limit the emissions an airline can release. In the project „Sustainable Airline Scheduling & Planning“ Marius Krömer, David Topchishvili, and Prof. Cornelia Schön explore the implications of such regulations using an optimization model designed to create an optimal flight schedule within the specified emission limits. The key outcomes of the study are as follows:
- While the imposition of emission limits results in a decrease in airline profits, this reduction is notably less substantial than the decline in CO2 emissions. For instance, a 10% or 50% reduction in emissions corresponds to a 1.72% or 15.74% decrease in operating profit, as illustrated in the figure.
- Rather than uniformly reducing frequencies on all routes, our model suggests a more strategic approach. Some less profitable routes are entirely canceled while others continue to operate with high frequencies.
- Surprisingly, short routes appear to be more profitable, even when substitutes are readily available.
- On the remaining routes, prices do not experience a significant increase due to competitive market dynamics.
--> Overall surprising is the fact, that customers from some metropolitan areas suffer strongly because most of their routes and capacities are cut. This factor should be carefully considered when formulating new regulatory measures.
The study makes several assumptions, including a network with metropolitan areas in the US, a flight network built from scratch, a low-cost airline business model, and the use of a discrete choice model to simulate customer behavior with three distinct segments (business, leisure price, leisure value). For more detailed insights, we invite you to explore our publication in the Journal of Cleaner Production [which is available for free until the end of January 2024]: https://authors.elsevier.com/a/1iK2f3QCo9j4Ec