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Airport Congestion and Ineficiency in Slot Allocation

Author

Listed:
  • Pierre M. Picard

    (CREA, Université de Luxembourg)

  • Alessandro Tampieri

    (CREA, Université de Luxembourg)

  • Xi Wan

    (CREA, Université de 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.

Suggested Citation

  • Pierre M. Picard & Alessandro Tampieri & Xi Wan, 2015. "Airport Congestion and Ineficiency in Slot Allocation," DEM Discussion Paper Series 15-10, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:15-10
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    File URL: https://hdl.handle.net/10993/25187
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Slot allocation; Airport congestion; Vertical differentiation;
    All these keywords.

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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