An Axiomatic Approach to the Airline Emission Fees Problem

An airline lands in a number of airports in a region. An airport serves a number of airlines. Each airport charges a given amount of emission fees to those airlines using the airport. The total emission fees from all airports in the region must be shared among all airlines. We propose an axiomatic approach to this airline emission fees problem. We suggest a sharing rule called the Decomposition rule that is based on a few simple axioms. The Decomposition rule coincides with the Shapley value of the game associated with the problem and is shown in the core. Thus, no alliance of airlines can reduce their emission fees by forming an independent coalition. On the other hand, we also show that the Decomposition rule is split-proof. In other words, no airline has an incentive to split into two or more airlines.