The pass-through of cost increases in aviation

Airlines are regularly confronted with cost increases, e.g. increasing fuel and security costs, or in the case of Europe, the cost of emission allowances (ETS). Airlines may choose to either pass cost increases through to the passenger or to fully absorb them at the expense of lower profits. A combination of these two options, in which only a part of the increase is passed through, is of course also a possibility. 

At the moment it is unclear when and to what extent cost increases are passed on to the passengers. Since it is a recurring theme in impact studies and policy discussions, Airneth organizes a seminar around this subject. Speakers include Carl Koopmans and Jim Paton. Carl Koopmans is an economics professor at the VU University Amsterdam. Based on economic theory he will discuss under what circumstances the pass-through of costs is most likely to occur. Furthermore he will present empirical research on the pass-through of cost increases in various economic sectors. Jim Paton is a senior lecturer at Cranfield University and has years of experience in the aviation sector as an executive for Spanair and easyJet. He will discuss how cost increases are passed through in practise.
Specific questions that will be addressed are:

• Which factors determine whether and to what extent airlines pass through cost increases to the passenger?
• Which factors determine whether and to what extent cross-subsidization between markets is possible?
• Are cost increases passed on faster than cost decreases?

Date
Wednesday 4 December, 14:00 – 17:30 hrs

Location
Planbureau voor de Leefomgeving, room O 00.02, Oranjebuitensingel 6, 2511 VE The Hague

Target audience
Scientists, researchers and economists, policy makers and representatives from the airline industry

Language
English

Registration 
Please register for this seminar by sending an email to info(at)airneth.com stating your name, email address and profession. Participation is free of charge.