Air Service Liberalisation and Carbon Dioxide Emissions

Why It Matters

ASAs improve connectivity and per‑passenger efficiency but also drive higher overall emissions, highlighting the need for complementary climate policies in aviation.

Key Takeaways

• ASAs boost passenger traffic by 12.7% (2012‑2019).
• Direct routes cut average distance 1.4% and flight legs 3.9%.
• Emissions per passenger fall, but total emissions rise due to scale.
• Top airlines see 3% emission drop; others unchanged.
• Full liberalisation could raise total emissions 1.7% despite efficiency gains.

Pulse Analysis

Air service agreements have long been viewed as a catalyst for market openness, yet their environmental footprint has received scant attention. The CEPII analysis quantifies how liberalising entry, capacity and pricing rights reshapes airline networks: more direct routes, fewer stopovers, and a modest 1.4% reduction in average flight distance. These operational tweaks translate into lower fuel burn per passenger, a crucial metric for airlines seeking to meet sustainability targets and for regulators monitoring carbon intensity.

The study also uncovers a paradox. While per‑passenger emissions decline, the liberalised framework spurs a 12.7% jump in passenger volumes, expanding the total emissions base. This scale effect eclipses the technical gains, especially for carriers outside the top revenue or service‑quality tiers, which do not experience significant emission reductions. The composition effect—traffic shifting toward larger, more efficient airlines—offers a partial offset, but the net outcome is a rise in aggregate aviation CO₂ output.

Policy implications are clear: liberalising air services alone cannot deliver the aviation sector’s climate objectives. Regulators must pair market access reforms with carbon‑pricing mechanisms, incentives for sustainable aviation fuels, and fleet‑modernisation programmes. By addressing both intensive (per‑passenger efficiency) and extensive (traffic growth) margins, policymakers can harness the connectivity benefits of ASAs without compromising emission reduction goals.