Environmental and financial sustainability of air transport: Are they incompatible?

Many would consider that the current reliance on air transport is environmentally unsustainable, especially given its impacts on climate change and its use of non-renewable resources. In addition, financial sustainability is often seen as inconsistent with environmental sustainability. The conclusions here are otherwise. Air transport does contribute to greenhouse gas emissions, but the climate change problem is a general one, and while addressing it has a cost, this cost is minimised when air transport is required to bear the environmental costs that it imposes. The reliance on non-renewable resources does give rise to a sustainability problem. There is not likely to be a problem of lack of financial sustainability of the industry, though addressing environmental objective will lead to a reduction in performance in the short run. Both environmental and financial sustainability of air transport can be achieved, as long as efficient policies are adopted.

Research highlights
► The paper finds that the current reliance on air transport is overall environmentally sustainable.
► Some sectors of air transport are unlikely to be environmentally sustainable and it is important that policies ensure that the new structure is optimal,
► Both environmental and financial sustainability of air transport can be achieved, as long as efficient policies are adopted.
► There is a need to internalize the costs of air transport but in doing so the incentives generated will lead to the more efficient use of non-renewable resources.