Airport Congestion and Ineficiency in Slot Allocation

Pierre Picard, Alessandro Tampieri and Xi Wan

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: This paper analyzes optimal slot allocation in the presence of airport congestion. We model peak and offpeak slots as vertically differentiated products, and congestion limits the number of peak slots that the airport can allocate. Inefficiency emerges when the airport does not exploit all its slots. We show that for a private airport, inefficiency may arise if the airport is not too congested and the per-passenger fee is small enough, while with a public airport it does not emerge. Furthermore the airport, irrespective of its ownership, tends to give different slots to flights with same destination if the underlying market is a duopoly, and a single slot if the underlying market is served by a monopoly.

Keywords: Slot allocation; Airport congestion; Vertical differentiation (search for similar items in EconPapers)
JEL-codes: H21 H23 R41 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com, nep-reg, nep-tre and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:15-10

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