Full Cost of Air Travel in the California Corridor

Transportation Research Record :Journal of the Transportation Research Board 1662, 1999, 1-9

9 Pages Posted: 4 Feb 2008

See all articles by David Gillen

David Gillen

University of British Columbia (UBC) - Sauder School of Business

David Matthew Levinson

affiliation not provided to SSRN

Abstract

The theoretical and empirical literature on the cost structure of the provision of air transportation is reviewed, and cost functions for air travel in the California corridor are specified and estimated. A full cost model is developed; it identifies and measures key cost components┬┐fuser, carrier, infrastructure, time and congestion, noise, accident, and pollution costs. Applying the models to data for domestic air travel in the California corridor, the total long-run average cost is estimated to be 11 cents per passenger km traveled. The single largest cost category is owning and operating a plane. In general, because of large fixed-cost components, the average cost of infrastructure exceeds the marginal cost.

Suggested Citation

Gillen, David and Levinson, David Matthew, Full Cost of Air Travel in the California Corridor. Available at SSRN: https://ssrn.com/abstract=1089084

David Gillen

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

David Matthew Levinson (Contact Author)

affiliation not provided to SSRN

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