Time-differentiated Airport Noise Surcharges: From Economic Theory to Policy Practice

Abstract

This chapter considers time-differentiated airport noise surcharges that occur in addition to general noise fees at an airport. In practice, an essential problem of such surcharges may consist of setting the price for a social policy goal, such as airport noise reduction, by shifting a number of critical flights away from sensitive times-of-day in the presence of an additional, competing economic policy goal in terms of fostering the network hub function and connectivity of that airport. In such a case, additional noise surcharges aim at balancing the socioeconomic noise costs against economic prosperity, to achieve a net benefit for society by inducing a particular airline scheduling behavior, such as shifting non-hub-relevant flights only. As a result, they differ from the well-known economic concepts for the internalization of externalities. We address this problem by offering a shift from an economic welfare view to a business administration perspective with the airlines as stakeholders, in order to describe the different rationales that need to be accounted for when searching for a pricing scheme that achieves one of the distinct steering effects in terms of airline scheduling behavior. In addition, we offer a tentative, generic guideline to determine the appropriate dimension of time-differentiated noise surcharges depending on the steering effect.

Citation

Wittmer, A. and Noto, C. (2019), "Time-differentiated Airport Noise Surcharges: From Economic Theory to Policy Practice", Airline Economics in Europe (Advances in Airline Economics, Vol. 8), Emerald Publishing Limited, Leeds, pp. 229-245. https://doi.org/10.1108/S2212-160920190000008010