| Title |
Redefining the skies: How sustainable aviation fuel alters airline cost structure and market dynamics |
| ID_Doc |
73265 |
| Authors |
Karanki, F |
| Title |
Redefining the skies: How sustainable aviation fuel alters airline cost structure and market dynamics |
| Year |
2024 |
| Published |
|
| DOI |
10.1080/15568318.2024.2397642 |
| Abstract |
Forecasts by the FAA in 2022 suggest that air travel will consistently increase over the next two decades, further escalating greenhouse gas emissions. Sustainable Aviation Fuel (SAF) is pinpointed as a potent solution for greenhouse emissions. However, its higher costs compared to conventional fuels present a challenge for its adoption. We examine the economic ramifications of SAF adoption on U.S. airlines by simulating two distinct scenarios. Our results reveal a 5.9% rise in the marginal costs (MC) of Full-Service Airlines (FSAs) with a 20% SAF blend while Low-Cost Carriers (LCCs) experience only a 1% increase under the same scenario. Alternatively, using a SAF blend that is 20% cheaper in a 50-50 ratio results in an 8.8% increase in the MC of FSAs, compared to just a 2% rise for LCCs. These scenarios suggest that the cost convergence of business models observed in recent years is unlikely to be achieved. |
| Author Keywords |
Competition; marginal costs; sustainable aviation fuel; US Airline market |
| Index Keywords |
Index Keywords |
| Document Type |
Other |
| Open Access |
Open Access |
| Source |
Social Science Citation Index (SSCI) |
| EID |
WOS:001306160800001 |
| WoS Category |
Green & Sustainable Science & Technology; Environmental Studies; Transportation |
| Research Area |
Science & Technology - Other Topics; Environmental Sciences & Ecology; Transportation |
| PDF |
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