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Scarcity, Market Power, and Prices at Slot-constrained Airports: Evidence from Mexico City

Author

Listed:
  • Almudena Arcelus
  • Ryan Booth
  • Aaron M. Fix
  • Jee-Yeon K. Lehmann
  • Federico G. Mantovanelli
  • Robert S. Pindyck

Abstract

Many of the world’s major airports are both slot-constrained, meaning that demand for take-offs and landings exceeds airport capacity at certain time periods, and concentrated, meaning that a single airline operates a large share of take-offs and landings. Slot constraints and slot concentration can each lead to higher average fares, but for different reasons that may require different policy prescriptions. In this article, we demonstrate how policy makers can differentiate between the effects of scarcity and concentration on prices, and we apply our methodology to a recent investigation into the allocation of take-off and landing slots at Mexico City’s airport.

Suggested Citation

  • Almudena Arcelus & Ryan Booth & Aaron M. Fix & Jee-Yeon K. Lehmann & Federico G. Mantovanelli & Robert S. Pindyck, 2019. "Scarcity, Market Power, and Prices at Slot-constrained Airports: Evidence from Mexico City," Journal of Transport Economics and Policy, University of Bath, vol. 53(2), pages 119-11-134.
    • Handle: RePEc:tpe:jtecpo:2019:53:2:119--134
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