Capital flight? Do airlines move fuel-efficient planes to high-fuel-tax routes?

This paper shows that airlines operate fuel-efficient planes on routes with high fuel taxes. It builds on a large data-collection effort compiling information on fuel taxes at the airport level, which is used to generate route-level taxes for thousands of nonstop airline routes in the US. The paper extends previous work exploring the connection between fuel prices and airline operations, with a new focus on the taxation of inputs. The results are used to derive the local pollution benefits from a route-specific fuel-tax increase.