IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v44y2010i3p330-357.html
   My bibliography  Save this article

An empirical analysis of airport slot trading in the United States

Author

Listed:
  • Fukui, Hideki

Abstract

The purpose of this paper is to examine whether the manipulative or strategic behaviors of slot-holding carriers have resulted in restricted market entry and service expansion by other carriers, especially rival carriers, at the four US airports that have secondary slot markets. Airport congestion and flight delays at many major airports have become a serious problem. It has been suggested that a secondary slot market is one of the most practical options for addressing airport congestion, which would increase the possibility of competitive entry and efficient use of scarce resources. A secondary slot market would work in the same manner as a congestion toll system or an auction system, provided that carriers' manipulative or strategic behaviors do not have serious effects on slot trading. However, the empirical effects of slot markets have not been investigated systematically. This paper examines empirically whether carriers' manipulative or strategic behaviors have impeded effective functioning of slot markets. Slot transfer data from four US airports between 1994 and 1999 were examined using regression analysis. Results of the analysis are mixed, suggesting that the most effective way of congestion management depends on conditions unique to each airport, and that subsequent interventions should reflect those conditions.

Suggested Citation

  • Fukui, Hideki, 2010. "An empirical analysis of airport slot trading in the United States," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 330-357, March.
  • Handle: RePEc:eee:transb:v:44:y:2010:i:3:p:330-357
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191-2615(09)00079-4
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Brueckner, Jan K & Spiller, Pablo T, 1994. "Economies of Traffic Density in the Deregulated Airline Industry," Journal of Law and Economics, University of Chicago Press, vol. 37(2), pages 379-415, October.
    2. Frank Berardino, 2009. "New US Airport Slot Policy in Flux," Journal of Transport Economics and Policy, University of Bath, vol. 43(2), pages 279-290, May.
    3. Adelman, M A, 1969. "Comment on the "H" Concentration Measure as a Numbers-Equivalent," The Review of Economics and Statistics, MIT Press, vol. 51(1), pages 99-101, February.
    4. Brueckner, Jan K., 2009. "Price vs. quantity-based approaches to airport congestion management," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 681-690, June.
    5. Christopher Mayer & Todd Sinai, 2003. "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil," American Economic Review, American Economic Association, vol. 93(4), pages 1194-1215, September.
    6. Severin Borenstein, 1988. "On the Efficiency of Competitive Markets for Operating Licenses," The Quarterly Journal of Economics, Oxford University Press, vol. 103(2), pages 357-385.
    7. J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LP, edition 2, number long2, March.
    8. Douglas W. Caves & Laurits R. Christensen & Michael W. Tretheway, 1984. "Economies of Density versus Economies of Scale: Why Trunk and Local Service Airline Costs Differ," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 471-489, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lay Eng Teoh & Hooi Ling Khoo, 2016. "Fleet Planning Decision-Making: Two-Stage Optimization with Slot Purchase," Journal of Optimization, Hindawi, vol. 2016, pages 1-12, June.
    2. Kenneth Button, 2020. "Studying the empirical implications of the liberalization of airport markets," Competition and Regulation in Network Industries, , vol. 21(3), pages 223-243, September.
    3. Fukui, Hideki, 2019. "How do slot restrictions affect airfares? New evidence from the US airline industry," Economics of Transportation, Elsevier, vol. 17(C), pages 51-71.
    4. Kappes, Jan Willem & Merkert, Rico, 2013. "Barriers to entry into European aviation markets revisited: A review and analysis of managerial perceptions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 57(C), pages 58-69.
    5. Gong, Zhenwei & Zhang, Fangni & Liu, Wei & Graham, Daniel J., 2023. "On the effects of airport capacity expansion under responsive airlines and elastic passenger demand," Transportation Research Part B: Methodological, Elsevier, vol. 170(C), pages 48-76.
    6. Valdes, Victor & Gillen, David, 2018. "The consumer welfare effects of slot concentration and reallocation: A study of Mexico City International Airport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 256-269.
    7. Sheng, Dian & Li, Zhi-Chun & Xiao, Yi-bin & Fu, Xiaowen, 2015. "Slot auction in an airport network with demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 82(C), pages 79-100.
    8. Noto, Claudio, 2020. "Airport slots, secondary trading, and congestion pricing at an airport with a dominant network airline," Research in Transportation Economics, Elsevier, vol. 79(C).
    9. Ng, Kam To & Fu, Xiaowen & Lee, Jaewoon & Yamaguchi, Katsuhiro & Zhu, Chuanyan, 2023. "The Effects of Bankruptcy on Airline Yield and Frequency: The case of the duopolistic domestic market in Japan," Transport Policy, Elsevier, vol. 142(C), pages 28-36.
    10. Pellegrini, Paola & Bolić, Tatjana & Castelli, Lorenzo & Pesenti, Raffaele, 2017. "SOSTA: An effective model for the Simultaneous Optimisation of airport SloT Allocation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 99(C), pages 34-53.
    11. Hou, Meng & Wang, Kun & Yang, Hangjun, 2021. "Hub airport slot Re-allocation and subsidy policy to speed up air traffic recovery amid COVID-19 pandemic --- case on the Chinese airline market," Journal of Air Transport Management, Elsevier, vol. 93(C).
    12. Fu, Xiaowen & Lei, Zheng & Liu, Shaoxuan & Wang, Kun & Yan, Jia, 2020. "On-time performance policy in the Chinese aviation market - An innovation or disruption?," Transport Policy, Elsevier, vol. 95(C), pages 14-23.
    13. Huubinh B. Le & Jules O. Yimga, 2023. "Slot Divestitures and Price Competition at Reagan National and LaGuardia," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(4), pages 321-340, June.
    14. Sheng, Dian & Li, Zhi-Chun & Fu, Xiaowen, 2019. "Modeling the effects of airline slot hoarding behavior under the grandfather rights with use-it-or-lose-it rule," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 48-61.
    15. Lindsey, Robin & Santos, Georgina, 2020. "Addressing transportation and environmental externalities with economics: Are policy makers listening?," Research in Transportation Economics, Elsevier, vol. 82(C).
    16. Nuno Antunes Ribeiro & Alexandre Jacquillat & António Pais Antunes, 2019. "A Large-Scale Neighborhood Search Approach to Airport Slot Allocation," Transportation Science, INFORMS, vol. 53(6), pages 1772-1797, November.
    17. Fukui, Hideki, 2014. "Effect of slot trading on route-level competition: Evidence from experience in the UK," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 124-141.
    18. Xiao, Yi-bin & Fu, Xiaowen & Oum, Tae H. & Yan, Jia, 2017. "Modeling airport capacity choice with real options," Transportation Research Part B: Methodological, Elsevier, vol. 100(C), pages 93-114.
    19. de Palma, André & Lindsey, Robin, 2020. "Tradable permit schemes for congestible facilities with uncertain supply and demand," Economics of Transportation, Elsevier, vol. 21(C).
    20. Zhang, Shengrun & Fuellhart, Kurt & Yang, Wendong & Tang, Xiaowei & Witlox, Frank, 2019. "Factors shaping non-stop airline services in the transatlantic air transport market: 2015–2017," Journal of Transport Geography, Elsevier, vol. 80(C).
    21. Avenali, Alessandro & D'Alfonso, Tiziana & Leporelli, Claudio & Matteucci, Giorgio & Nastasi, Alberto & Reverberi, Pierfrancesco, 2015. "An incentive pricing mechanism for efficient airport slot allocation in Europe," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 27-36.
    22. Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2022. "Ghostbusters: Hunting abnormal flights in Europe during COVID-19," Transport Policy, Elsevier, vol. 127(C), pages 203-217.
    23. Miranda, Victor A.P. & Oliveira, Alessandro V.M., 2018. "Airport slots and the internalization of congestion by airlines: An empirical model of integrated flight disruption management in Brazil," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 201-219.
    24. Till Kösters & Marlena Meier & Gernot Sieg, 2023. "Effects of the use-it-or-lose-it rule on airline strategy and climate," Working Papers 36, Institute of Transport Economics, University of Muenster.
    25. Ghafelebashi, Ali & Razaviyayn, Meisam & Dessouky, Maged, 2021. "Congestion Reduction via Personalized Incentives," Institute of Transportation Studies, Working Paper Series qt5b82168n, Institute of Transportation Studies, UC Davis.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Claudio Agostini, 2005. "El Mercado de Transporte Aéreo: Lecciones para Chile de una Revisión de la Literatura," ILADES-UAH Working Papers inv163, Universidad Alberto Hurtado/School of Economics and Business.
    3. Yanhao Wei, 2018. "Airline networks, traffic densities, and value of links," Quantitative Marketing and Economics (QME), Springer, vol. 16(3), pages 341-370, September.
    4. Fageda, Xavier & Flores-Fillol, Ricardo, 2016. "How do airlines react to airport congestion? The role of networks," Regional Science and Urban Economics, Elsevier, vol. 56(C), pages 73-81.
    5. Swaroop, Prem & Zou, Bo & Ball, Michael O. & Hansen, Mark, 2012. "Do more US airports need slot controls? A welfare based approach to determine slot levels," Transportation Research Part B: Methodological, Elsevier, vol. 46(9), pages 1239-1259.
    6. Oliveira, Marcus V.R. & Oliveira, Alessandro V.M., 2018. "What drives effective competition in the airline industry? An empirical model of city-pair market concentration," Transport Policy, Elsevier, vol. 63(C), pages 165-175.
    7. Fukui, Hideki, 2014. "Effect of slot trading on route-level competition: Evidence from experience in the UK," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 124-141.
    8. Roucolle, Chantal & Seregina, Tatiana & Urdanoz, Miguel, 2020. "Measuring the development of airline networks: Comprehensive indicators," Transportation Research Part A: Policy and Practice, Elsevier, vol. 133(C), pages 303-324.
    9. Doi, Naoshi, 2014. "Mutual influence across routes using a common airport: The case of the domestic market in Japan," Journal of Air Transport Management, Elsevier, vol. 40(C), pages 132-136.
    10. James Reitzes & Brendan McVeigh & Nicholas Powers & Samuel Moy, 2015. "Competitive Effects of Exchanges or Sales of Airport Landing Slots," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(2), pages 95-125, March.
    11. Achim I. Czerny & Anming Zhang, 2010. "Airport Congestion Pricing and Passenger Types," WHU Working Paper Series - Economics Group 10-01, WHU - Otto Beisheim School of Management.
    12. Lin, Ming Hsin & Zhang, Anming, 2016. "Hub congestion pricing: Discriminatory passenger charges," Economics of Transportation, Elsevier, vol. 5(C), pages 37-48.
    13. Dixit, Aasheesh & Jakhar, Suresh Kumar, 2021. "Airport capacity management: A review and bibliometric analysis," Journal of Air Transport Management, Elsevier, vol. 91(C).
    14. Betancor, Ofelia & Carmona, Miguel & Macário, Rosário & Nash, Chris, 2005. "Operating Costs," Research in Transportation Economics, Elsevier, vol. 14(1), pages 85-124, January.
    15. Xia, Wenyi & Zhang, Anming, 2016. "High-speed rail and air transport competition and cooperation: A vertical differentiation approach," Transportation Research Part B: Methodological, Elsevier, vol. 94(C), pages 456-481.
    16. Anming Zhang & Yimin Zhang & Joseph A. Clougherty, 2011. "Competition and Regulation in Air Transport," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 35, Edward Elgar Publishing.
    17. Bilotkach, Volodymyr & Fageda, Xavier & Flores-Fillol, Ricardo, 2013. "Airline consolidation and the distribution of traffic between primary and secondary hubs," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 951-963.
    18. Brueckner, Jan K. & Pels, Eric, 2005. "European airline mergers, alliance consolidation, and consumer welfare," Journal of Air Transport Management, Elsevier, vol. 11(1), pages 27-41.
    19. Gaggero, Alberto A. & Luttmann, Alexander, 2023. "The determinants of hidden-city ticketing: Competition, hub-and-spoke networks, and advance-purchase requirements," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 173(C).
    20. Brueckner, Jan K & Whalen, W Tom, 2000. "The Price Effects of International Airline Alliances," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 503-545, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:44:y:2010:i:3:p:330-357. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.