Isn the increase in oil prices over recent years a strong enough incentive for airlines to be more fuel-efficient?
Higher oil prices certainly provide a stronger incentive to reduce fuel consumption. However, the airline industry starts from a comparatively low fuel cost because aviation fuel is not taxed. Recent increases in fuel prices represent only a fraction of the minimum tax that would have applied if aircraft fuels were taxed like other motor fuels. Oil prices would have to increase much more before the cost of aircraft fuels reaches the level they would be at if they were not exempt from taxes.
