AIR TRAFFIC GROWTH, AIRLINE FINANCES, AND PUBLIC BENEFITS IN RELATION TO THE COST OF NEW PROGRAMS TO ALLEVIATE JET AIRCRAFT NOISE NEAR AIRPORTS
Abstract
Effective new programs for coping with aircraft noise problems around airports will probably involve new expenditures. If such costs are passed on to airline traffic, they will affect traffic growth through price elasticity of demand. A 1-percent increase in fares and rates is estimated to decrease traffic by 1.3 percent; a 5-percent increase would reduce traffic by 6.3 percent. Separate elasticities are estimated by major airline groups: -1.28 for domestic trunkline passengers, -1.6 for international passengers, -1.0 for local service passengers, and -1.5 for cargo traffic. The airlines appear to have a comfortable financial future to cover all expenses and a fair return on investment, but not sufficient to pay large additional expenses out of forecast revenues without raising their fare and rate levels. The direct beneficiaries of air transportation -- passengers and shippers -- are the logical persons to pay for noise programs, through the pricing system of airlines and the costs of general aviation flying.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1967
- Accession Number
- AD0647393