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Airport slot allocation in Europe: economic efficiency and fairness

Author

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  • Lorenzo Castelli
  • Paola Pellegrini
  • Raffaele Pesenti

Abstract

One of the main principles of the current airport slot allocation mechanism in Europe is based on the existence of historical (also called grandfather) rights granted to airlines for using such slots. Through an experimental analysis, we quantitatively show that the system disutility (i.e. the sum of the costs of the individual airlines due to the imbalance between demand and capacity at airports) is higher when grandfather rights (GFRs) are present. Moreover, we consider the interdependence of slots at different airports and we introduce the possibility to fairly redistribute such costs among airlines through monetary compensations. Our results suggest that it is possible to remove GFRs without significantly penalising airlines which own them.

Suggested Citation

  • Lorenzo Castelli & Paola Pellegrini & Raffaele Pesenti, 2012. "Airport slot allocation in Europe: economic efficiency and fairness," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 6(1/2), pages 28-44.
  • Handle: RePEc:ids:ijrevm:v:6:y:2012:i:1/2:p:28-44
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Cavusoglu, Sabriye Sera & Macário, Rosário, 2021. "Minimum delay or maximum efficiency? Rising productivity of available capacity at airports: Review of current practice and future needs," Journal of Air Transport Management, Elsevier, vol. 90(C).
    3. Jorge, Diana & Antunes Ribeiro, Nuno & Pais Antunes, António, 2021. "Towards a decision-support tool for airport slot allocation: Application to Guarulhos (Sao Paulo, Brazil)," Journal of Air Transport Management, Elsevier, vol. 93(C).
    4. Alessandro Avenali & Tiziana D'Alfonso & Claudio Leporelli & Giorgio Matteucci & Alberto Nastasi & Pierfrancesco Reverberi, 2014. "A supervised market mechanism for efficient airport slot allocation," DIAG Technical Reports 2014-03, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    5. 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.
    6. 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.
    7. Pellegrini, Paola & Rodriguez, Joaquin, 2013. "Single European Sky and Single European Railway Area: A system level analysis of air and rail transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 57(C), pages 64-86.
    8. Jamie Fairbrother & Konstantinos G. Zografos & Kevin D. Glazebrook, 2020. "A Slot-Scheduling Mechanism at Congested Airports that Incorporates Efficiency, Fairness, and Airline Preferences," Transportation Science, INFORMS, vol. 54(1), pages 115-138, January.
    9. Dixit, Aasheesh Kumar & Shakya, Garima & Jakhar, Suresh Kumar & Nath, Swaprava, 2023. "Algorithmic mechanism design for egalitarian and congestion-aware airport slot allocation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).
    10. Adler, Nicole & Yazhemsky, Ekaterina, 2018. "The value of a marginal change in capacity at congested airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 154-167.
    11. Ye, Qing Chuan & Zhang, Yingqian & Dekker, Rommert, 2017. "Fair task allocation in transportation," Omega, Elsevier, vol. 68(C), pages 1-16.
    12. 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.
    13. Lambelho, Miguel & Mitici, Mihaela & Pickup, Simon & Marsden, Alan, 2020. "Assessing strategic flight schedules at an airport using machine learning-based flight delay and cancellation predictions," Journal of Air Transport Management, Elsevier, vol. 82(C).
    14. Ribeiro, Nuno Antunes & Jacquillat, Alexandre & Antunes, António Pais & Odoni, Amedeo R. & Pita, João P., 2018. "An optimization approach for airport slot allocation under IATA guidelines," Transportation Research Part B: Methodological, Elsevier, vol. 112(C), pages 132-156.
    15. Konstantinos G. Zografos & Michael A. Madas & Konstantinos N. Androutsopoulos, 2017. "Increasing airport capacity utilisation through optimum slot scheduling: review of current developments and identification of future needs," Journal of Scheduling, Springer, vol. 20(1), pages 3-24, February.
    16. Paola Pellegrini & Lorenzo Castelli & Raffaele Pesenti, 2011. "Metaheuristic algorithms for the simultaneous slot allocation problem," Working Papers 9, Department of Management, Università Ca' Foscari Venezia.
    17. Androutsopoulos, Konstantinos N. & Manousakis, Eleftherios G. & Madas, Michael A., 2020. "Modeling and solving a bi-objective airport slot scheduling problem," European Journal of Operational Research, Elsevier, vol. 284(1), pages 135-151.
    18. Ivanov, Nikola & Netjasov, Fedja & Jovanović, Radosav & Starita, Stefano & Strauss, Arne, 2017. "Air Traffic Flow Management slot allocation to minimize propagated delay and improve airport slot adherence," Transportation Research Part A: Policy and Practice, Elsevier, vol. 95(C), pages 183-197.
    19. Androutsopoulos, Konstantinos N. & Madas, Michael A., 2019. "Being fair or efficient? A fairness-driven modeling extension to the strategic airport slot scheduling problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 130(C), pages 37-60.
    20. 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.
    21. Pellegrini, Paola & Castelli, Lorenzo & Pesenti, Raffaele, 2012. "Secondary trading of airport slots as a combinatorial exchange," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(5), pages 1009-1022.
    22. repec:aeg:report:2014-3 is not listed on IDEAS
    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. Zografos, Konstantinos G. & Androutsopoulos, Konstantinos N. & Madas, Michael A., 2018. "Minding the gap: Optimizing airport schedule displacement and acceptability," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 203-221.

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    More about this item

    Keywords

    ATM; air traffic management; airport slot allocation; compensation mechanisms; SESAR; Single European Sky ATM Research Programme; grandfather rights; economic efficiency; fairness; historical rights; airport capacity; demand.;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory

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