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Do Airlines that Dominate Traffic at Hub Airports Experience Less Delay?

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Author Info
Joseph I. Daniel () (Department of Economics,University of Delaware)
Katherine Thomas Harback (Mitre Corporation)
Abstract

The desirability of airport congestion pricing largely depends on whether dominant airlines otherwise fail to internalize their self-imposed congestion delays. Brueckner (2002) and Mayer and Sinai (2003) find (weak) statistically significant evidence of internalization. We replicate and extend these models by refining their measures of delay and controlling for fixed and random airport effects. For twenty-seven large US airports, we estimate every flight’s congestion delay attributable to its operating time. These time-dependent queuing delays result from traffic rates temporarily exceeding airport capacity, and are precisely the delays susceptible to peak-load congestion pricing. As modified, the models reject the internalization hypothesis.

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File URL: http://www.lerner.udel.edu/economics/WorkingPapers/2005/UDWP2005-09.pdf
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Publisher Info
Paper provided by University of Delaware, Department of Economics in its series Working Papers with number 05-09.

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Length: 56 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:dlw:wpaper:05-09

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Postal: Purnell Hall, Newark, Delaware 19716
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Web page: http://www.lerner.udel.edu/economics/
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Related research
Keywords: Hub-and-spoke airline networks simulated annealing commercial aviation airline competition airline mergers airfares

Find related papers by JEL classification:
H2 - Public Economics - - Taxation, Subsidies, and Revenue
L5 - Industrial Organization - - Regulation and Industrial Policy
L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
D6 - Microeconomics - - Welfare Economics

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  1. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December. [Downloadable!] (restricted)
  2. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1990. "Economics of a bottleneck," Journal of Urban Economics, Elsevier, vol. 27(1), pages 111-130, January. [Downloadable!] (restricted)
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  3. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May. [Downloadable!] (restricted)
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