Abstract
In this paper we assess the impact of the CO2 costs for short- and long-haul aircraft based on present values and on purchase options. We evaluate purchase options with a framework developed for real option analysis to estimate the value of flexibility under uncertain kerosene and CO2 prices. We find an average influence of CO2 costs on present values of €1.1million for the short haul plane and €4.1million for the long-haul plane over the typical lifetime of an airplane. For purchase options, we find a CO2 influence of €0.43million for the long-haul plane and a moderate impact for the short-haul plane. The results underline the importance of CO2 and kerosene costs for long-haul aircraft.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
