Biofuel and commercial aviation: will consumers pay more for it?

Abstract

Biofuels are a promising fuel alternative because they decrease the amount of CO2 released by aircraft and counteract the depletion of oil reserves necessary for producing kerosene-based jet fuel. This may alter passengers' perceptions towards jet fuel and cause them to re-evaluate the dollar worth of an airline ticket. The purpose of the current research was to investigate how the implementation of biofuels into commercial aviation affects a passenger's willingness to pay (WTP). The study looked at three dependent variables: WTP more for airfare, amount/percentage of increase/decrease in ticket cost and their sustainability views. The findings indicate consumer WTP 13% extra for biofuel, and overall, consumers felt that using biofuel was a more sustainable practice than using traditional jet fuel. The majority of this effect was due to emotions mediating the relationship between type of fuel and WTP.