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The Social Cost of Air Traffic Delays

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  • Ivaldi, Marc
  • de Villemeur, Etienne
  • Urdanoz, Miguel
  • Quinet, Emile

Abstract

The so-called buffer time or buffer delay allows airlines to control for excessive delays by introducing extra time in their schedule in addition to what is technically required. . We study the differences between unregulated markets - where airlines are free to fix their buffer times strategically - and a situation where a social planner would control for time schedules, and in particular the buffer time. To do so, we use a calibrated model of a network of three cities - one of them being a hub - served by a single airline. Welfare losses that follow from delays are relatively small as compared to the potential benefits that would follow from a decrease in ticket prices. The model thus advocates that, at least for the connections that are considered, fares rather than delays should be the focus of institutions aiming at enhancing passengers? welfare.

Suggested Citation

  • Ivaldi, Marc & de Villemeur, Etienne & Urdanoz, Miguel & Quinet, Emile, 2015. "The Social Cost of Air Traffic Delays," CEPR Discussion Papers 10386, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10386
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    Cited by:

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    More about this item

    Keywords

    Delays; Social optimum; Calibration;
    All these keywords.

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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