Do Airlines that Dominate Traffic at Hub Airports Experience Less Delay?

Joseph Daniel and Katherine Thomas Harback
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Katherine Thomas Harback: Mitre Corporation

No 05-09, Working Papers from University of Delaware, Department of Economics

Abstract: The desirability of airport congestion pricing largely depends on whether dominant airlines otherwise fail to internalize their self-imposed congestion delays. Brueckner (2002) and Mayer and Sinai (2003) find (weak) statistically significant evidence of internalization. We replicate and extend these models by refining their measures of delay and controlling for fixed and random airport effects. For twenty-seven large US airports, we estimate every flight’s congestion delay attributable to its operating time. These time-dependent queuing delays result from traffic rates temporarily exceeding airport capacity, and are precisely the delays susceptible to peak-load congestion pricing. As modified, the models reject the internalization hypothesis.

Keywords: Hub-and-spoke airline networks; simulated annealing; commercial aviation; airline competition; airline mergers; airfares (search for similar items in EconPapers)
JEL-codes: D6 H2 L5 L9 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2005
New Economics Papers: this item is included in nep-net, nep-pbe and nep-tur
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