Socio-Economic Impacts of the New Tariff Policy in Passenger Air Transport via the Internalization of Passenger's Externalities Into the Costs of Service Provider

After the price reducing pressure from the low-cost carriers, the standard airlines also leaned forward to a dramatic change in the price decrease approach. This step affected the entire passenger air transport service. The passengers now face many responsibilities, i.e., costs, that the airlines shifted to the end users. This trend can be unequivocally marked as negative externalities on the passenger's side. All of that, generated by behavior and decision making of the air transport service providers. This paper introduces a new research project of the Faculty of Transportation Sciences from Czech Technical University in Prague. The main goal of this project is to identify the externalities and its relations mentioned above. The overall efficiency of a transport system is one of the main attributes of the Smart Cities concept. And because this concept focuses on the use and implementation of new technologies to existing systems, the outlined situation in passenger air transport may be partially improved with the innovative solutions in the frame of so-called Smart Airports. However, the authors believe that only a change in the service provision by the operators of this service is the fundamental solution to this situation. Additionally, another objective of the project is to achieve a conversion of the above-mentioned externalities into financial indicators. This transformation shall be done with a use of economic-mathematical modeling tools. In the next phase, he project aims to propose the internalization into the service providers' cost structure using The Coase Theorem.