Do the rich pay their fair share? Enumerating the financial and emissions consequences of abolishing premium air travel

TL;DR

This study evaluates the potential environmental and revenue impacts of banning premium air travel, finding significant emissions reductions but also notable economic and social consequences, especially for lower-income travelers.

Contribution

It provides an empirical analysis of how eliminating premium cabins affects emissions and airline revenue, incorporating detailed aircraft and fare data.

Findings

Premium cabin elimination can reduce per-passenger emissions by 8.1% to 21.5%.

All-economy configurations may decrease or increase emissions on a per-flight basis.

Revenue declines of 4.92% to 23.1% could require fare hikes of 6% to 30%.

Abstract

Premium air travel is often associated with a disproportionately large carbon emissions footprint. This association reflects the increased space and amenities typically found in premium cabins that existing discourse suggests makes their carriage more fuel, and consequently carbon, intensive. One increasingly popular solution is disincentivizing the use of premium cabins in favor of all-economy cabins. How effective might such a policy be. To what extent. And how may the revenue impact affect travelers. We address these questions by leveraging an empirical model that integrates cabin configuration data, fuel burn profiles across various aircraft types, and multi-month airfare datasets. Our findings are threefold. First, we find that favoring entirely foregoing premium travel classes can reduce per-passenger emissions by between 8.1 and 21.5 percent, the precise figure varying based on the type of aircraft and aircraft stage length involved. Second, we observe that these emissions reductions are far less assured on a per-flight and a lifespan basis. Here, an all-economy configuration can reduce emissions by 0.45 percent or increase emissions by as much as 1.43 percent. Third, we enumerate pronounced revenue consequences associated with an all-economy configuration. This configuration produces aggregate revenue declines of between 4.92 and 23.1 percent, necessitating airfare increases of between 6 and 30 percent to maintain baseline revenue. This increase risks imposing a profound and regressive economic burden on working-class travelers who exhibit markedly higher price elasticities of demand compared to their wealthier counterparts and highlights the cross-subsidization airlines leverage to ensure the accessibility of air travel.