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Title:

A Note on Aircraft Age and Airfares

Accession Number:

01658592

Record Type:

Component

Abstract:

This paper finds that airlines charge higher fares on flights operated by older aircraft. The results show how airline fleet costs can ultimately affect consumers through airfares. Data on over five million domestic flights are collapsed into a quarterly panel that tracks fares and operating aircraft attributes across various nonstop markets within the United States. The fare impacts of aircraft age are estimated using a reduced-form fare regression, which controls for competition and other market characteristics that affect ticket prices. While fares are found to generally increase with older aircraft, the results show that the relationship between aircraft age and fares is more nuanced. Prices decrease with age on markets served by brand-new aircraft, but increase with age on markets where the average aircraft age is over nine years old.

Supplemental Notes:

This paper was sponsored by TRB committee AV040 Standing Committee on Aviation Economics and Forecasting.

Report/Paper Numbers:

18-04660

Language:

English

Authors:

Lakew, Paulos Ashebir

Pagination:

16p

Publication Date:

2018

Conference:

Transportation Research Board 97th Annual Meeting

Location: Washington DC, United States
Date: 2018-1-7 to 2018-1-11
Sponsors: Transportation Research Board

Media Type:

Digital/other

Features:

Figures; References; Tables

Geographic Terms:

United States

Subject Areas:

Aviation; Economics; Vehicles and Equipment

Source Data:

Transportation Research Board Annual Meeting 2018 Paper #18-04660

Files:

TRIS, TRB, ATRI

Created Date:

Jan 8 2018 11:08AM