Deregulation and Efficiency in Slot-Constrained Airports

Pierre Picard, Alessandro Tampieri and Xi Wan ()
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Xi Wan: Nanjing Audit University, CN

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

Abstract: We investigate the presence of inefficiency in slot allocation when a coordinator al- locates slots on destination markets served by monopoly and duopoly airlines, and the number of available peak-time slots is constrained by airport capacity. When an airport maintains regulated per-passenger fees, we observe the emergence of allocative inefficiency. Conversely, in scenarios where an airport has the autonomy to set fees, we find that, in line with empirical evidence, fee deregulation resolves these allocative inefficiencies by increasing per-passenger fees. However, the improvement in allocation efficiency may be counterbalanced by the rise in fees, potentially impacting overall welfare.

Keywords: Slot allocation; Endogenous fee; Airport capacity. (search for similar items in EconPapers)
JEL-codes: H21 H23 R41 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-eff, nep-reg and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:23-14

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