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Effects of Airports’ Slots Re-allocation: a Vertical Differentiation Approach

Author

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  • Cristina Barbot

    (CETE, Faculdade de Economia, Universidade do Porto)

Abstract

The promotion of a competition policy in air transport faces several obstacles. One of them is the absence of mobility airports’ slots. The European Commission has been preparing legislation on this matter, with the prime objective of encouraging an effective mobility that leads to a more efficient use of scarce airport capacity. This paper analyses the outcomes of such a policy, by means of a model that intends to capture the main features of airports’ market before and after slots re-allocation. Results show that the achievement of more efficiency depends on the criteria used for its assessment. In particular, welfare is lowered after the process of re-allocation. An empirical test of airlines’ pricing strategies is presented in the paper, confirming one of the model’s results, that airlines differentiate more prices between peak load and off peak hours in a more competitive environment.

Suggested Citation

  • Cristina Barbot, 2004. "Effects of Airports’ Slots Re-allocation: a Vertical Differentiation Approach," CEF.UP Working Papers 0401, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:cetedp:0401
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    More about this item

    Keywords

    slots re-allocation; peak load pricing;

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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