The factors affecting pollution and noise environmental costs of the current aircraft fleet: An econometric analysis

We study the factors affecting pollution, noise annoyance and global warming costs produced by aviation, considering all the fleet currently operating. We analyze different aircraft-engine combinations, leading to a dataset of about 1,500 different observations, with relevant variability in terms of externalities produced. Our econometric analysis shows that aircraft age is a main determinant of environmental costs: a 1-year younger aircraft leads to a −0.32% in costs. We found a complementary relation among pollution, noise annoyance and global warming: the impact of age on them has the same sign. We also show that aircraft size has a positive impact on costs: this implies that wide aircrafts generate higher per flight costs than medium, small and light ones. On the contrary, when looking at per-seat environmental costs, aircraft category is found to have a negative impact. However, these contrasting results tend to disappear if we include in the analysis market demand and flight frequency, with medium size aircraft performing better, in environmental terms, than both small and wide category aircraft. Hence, policy makers, in designing incentives towards an environmentally sustainable aviation, should take into account that aircraft size and market demand are crucial in terms of environmental costs: if demand is very low small aircraft may outperform larger ones, while if demand is sufficiently large medium aircraft are, on average, more environmentally friendly.