chapter  9
28 Pages

Aviation and Economic Development: The Implications of Environmental Costs on Different Airline Business Models and Flight Networks

ByCherie Lu

Over the years, increasing attention has been paid to the sustainable development of the aviation sector (e.g. Caves, 1994a, b; Fawcett, 2000). Environmental and social concerns are gradually posing limitations on the growth of the air transport industry. Although the global economic downturn and political turmoil of increased global security have caused a decline in the number of flights and passengers over the past years, the air traffic has picked up momentum and is foreseen to grow even more rapidly than before, especially in the emerging markets. Therefore, these environmental concerns have attracted more attention from government bodies and international aviation organizations. Nevertheless, based on the polluter pays principle, it is widely recognized now that the costs of these externalities must be internalized (European Commission, 1999). For this reason, the sustainable development of the air transport industry is a significant issue that should be incorporated into all activities concerned.