Recently, greenhouse gas (GHG) emissions become the hottest issue in the transportation sector. The air transport sector contributes approximately 2% of global greenhouse gas emissions. Reducing greenhouse gas emissions from aircraft is one of the issues taken seriously by the transportation sector. However, air transportation has implemented several ways to reduce carbon emissions, and one of them is by launching a carbon offset program. This study estimates the willingness among Malaysian airline passengers to pay for a carbon offset program to have a better environmental performance. Using a double-bounded dichotomous choice of contingent valuation method (CVM) estimates how much air passengers would be willing to pay to offset carbon emissions generated by their travel. The results obtained from this study suggest that the additional fee for airline tickets will be RM86.00 can be charged to have a better environmental performance.
Keywords: Airline industries; Carbon offsets; Contingent valuation method; Greenhouse gas emissions; Willingness to pay.