Competition Effects of Airport Slot-Swap: An Analysis of the Delta/US Airways Deal

Yongjoon Park

No 20-11, Working Papers from NET Institute

Abstract: Carriers often exchange airport slots (a so-called slot swap) in order to expand their hub networks, but the exchange is often faced with competition-related concerns. In this study, I estimate an airline entry model that can analyze the effects of a slot swap on market competition, focusing on the deal between Delta and US Airways in 2011 at Ronald Reagan Washington Airport (DCA) and LaGuardia New York Airport (LGA). Counterfactual analysis suggests that a slot swap deal incentivizes carriers to change their network by actively adding/removing routes and hence has distributional effect on passengers in different routes. Also, remedies that force the exchanging party to give up some of their slots to rivals may increase consumer surplus, but excessive remedies may harm consumers.

Keywords: Airport Slot Swap; Endogenous Entry; Static Games; Airlines; Network Effects (search for similar items in EconPapers)
JEL-codes: C54 L13 L44 L93 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2020-09
New Economics Papers: this item is included in nep-com, nep-ind, nep-ore, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.netinst.org/Park_20-11.pdf (application/pdf)
no

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:2011

Access Statistics for this paper

More papers in Working Papers from NET Institute
Bibliographic data for series maintained by Nicholas Economides ().