Liberalization and efficiency in slot-constrained airports

Pierre M. Picard, Alessandro Tampieri and Xi Wan

Transport Policy, 2025, vol. 163, issue C, 14-26

Abstract: We investigate the presence of inefficiency in slot allocation when an airport allocates slots in destination markets served by monopoly and duopoly airlines, with the number of available peak-time slots 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 liberalization 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: 2025
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DOI: 10.1016/j.tranpol.2024.12.015

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