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Comparison of decentralized slot and pricing policies when airports are substitutes for non-local passengers

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  • Lang, Hao
  • Czerny, Achim I.

Abstract

Airport congestion and delays occur when a given infrastructure is heavily utilized. Delays can be controlled by allocating a limited number of permits to users (slot policies) or by increasing the user price (pricing policies). This study analyzes policy choices made by regions with congested airports and compares equilibrium outcomes. The main contribution is to analyze two scenarios in which non-locals consider congested airports as substitutes. The first concentrates on non-local origin–destination passengers, e.g., on leisure trips. The second concentrates on non-local transfer passengers flying, e.g., long distances. The local welfares of airport regions are distinguished from (i) the aggregate welfare of regions with congested airports, and (ii) the aggregate welfare across all regions including the origin regions of non-local passengers. The main policy insight is that the assessments of equilibrium outcomes and prices differ heavily depending on whether they are assessed from (i) the congested airports’ viewpoint, or (ii) the viewpoint of all regions, which creates conflicts of interest between airport groups.

Suggested Citation

  • Lang, Hao & Czerny, Achim I., 2023. "Comparison of decentralized slot and pricing policies when airports are substitutes for non-local passengers," Transportation Research Part A: Policy and Practice, Elsevier, vol. 171(C).
    • Handle: RePEc:eee:transa:v:171:y:2023:i:c:s0965856423000617
    DOI: 10.1016/j.tra.2023.103641
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    References listed on IDEAS

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    1. Lang, Hao & Czerny, Achim I., 2022. "Airport pricing versus (grandfathered) slots: A generalization," Economics of Transportation, Elsevier, vol. 29(C).
    2. Lin, Ming Hsin & Zhang, Anming, 2016. "Hub congestion pricing: Discriminatory passenger charges," Economics of Transportation, Elsevier, vol. 5(C), pages 37-48.
    3. Zhang, Anming & Czerny, Achim I., 2012. "Airports and airlines economics and policy: An interpretive review of recent research," Economics of Transportation, Elsevier, vol. 1(1), pages 15-34.
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    14. Czerny, Achim I. & Lang, Hao, 2019. "A pricing versus slots game in airport networks," Transportation Research Part B: Methodological, Elsevier, vol. 125(C), pages 151-174.
    15. Czerny, Achim I. & Zhang, Anming, 2014. "Airport congestion pricing when airlines price discriminate," Transportation Research Part B: Methodological, Elsevier, vol. 65(C), pages 77-89.
    16. Lin, Ming Hsin, 2020. "Congestion pricing and capacity for internationally interlinked airports," Transportation Research Part B: Methodological, Elsevier, vol. 142(C), pages 126-142.
    17. Lin, Ming Hsin & Zhang, Yimin, 2017. "Hub-airport congestion pricing and capacity investment," Transportation Research Part B: Methodological, Elsevier, vol. 101(C), pages 89-106.
    18. Lin, Ming Hsin, 2022. "Pricing regime choices for international airports: A rationale for the non-discrimination principle," Economics of Transportation, Elsevier, vol. 31(C).
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    More about this item

    Keywords

    Network; Airports; Slots; Congestion pricing; Transfer passengers; Discriminatory airport charges;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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