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Deregulation and Efficiency in Slot-Constrained Airports

Author

Listed:
  • Pierre Picard

    (DEM, Université du Luxembourg)

  • Alessandro Tampieri

    (University of Florence. IT)

  • Xi Wan

    (Nanjing Audit University, CN)

Abstract

We investigate the presence of inefficiency in slot allocation when a coordinator al- locates slots on destination markets served by monopoly and duopoly airlines, and the number of available peak-time slots is constrained by airport capacity. When an airport maintains regulated per-passenger fees, we observe the emergence of allocative inefficiency. Conversely, in scenarios where an airport has the autonomy to set fees, we find that, in line with empirical evidence, fee deregulation resolves these allocative inefficiencies by increasing per-passenger fees. However, the improvement in allocation efficiency may be counterbalanced by the rise in fees, potentially impacting overall welfare.

Suggested Citation

  • Pierre Picard & Alessandro Tampieri & Xi Wan, 2023. "Deregulation and Efficiency in Slot-Constrained Airports," DEM Discussion Paper Series 23-14, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:23-14
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    File URL: https://hdl.handle.net/10993/58875
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Slot allocation; Endogenous fee; Airport capacity.;
    All these keywords.

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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