The effect of an eco-label on the booking decisions of air passengers

Abstract

In the last few years there has been an increasing attempt to find solutions on how to mitigate the environmental impacts of air travel. Behavioral change has hereby been identified as the measure with the most significant impact. One way to encourage behavioral change is the use of eco-labels. Eco-labels have, to date, received scant attention in the aviation industry, and their effect on air travel behavior is still largely unknown. This study explores the effect of an eco-label on the booking decisions of passengers. We conduct a stated choice experiment with 553 air passengers. Our findings show that providing passengers with an eco-label leads to behavioral change, as the label makes them avoid the most polluting flights while it also increases their willingness to pay for less polluting flights. We find, however, that it is environmentally minded passengers who are more likely to select green-labeled flights. In addition, our results show that providing additional information on the purpose and goals of the eco-label is crucial for its adoption, because this added information increases the preference for more environmentally friendly flights significantly. Based on our results, we provide recommendations to the industry and for further research.