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Liberalization and efficiency in slot-constrained airports

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  • Picard, Pierre M.
  • Tampieri, Alessandro
  • Wan, Xi

Abstract

We investigate the presence of inefficiency in slot allocation when an airport allocates slots in destination markets served by monopoly and duopoly airlines, with the number of available peak-time slots 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 liberalization 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

  • Picard, Pierre M. & Tampieri, Alessandro & Wan, Xi, 2025. "Liberalization and efficiency in slot-constrained airports," Transport Policy, Elsevier, vol. 163(C), pages 14-26.
    • Handle: RePEc:eee:trapol:v:163:y:2025:i:c:p:14-26
    DOI: 10.1016/j.tranpol.2024.12.015
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    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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