Airport Slots International Experiences and Options for Reform

Over the past several decades, commercial air traffic has been growing at a far greater rate than airport capacity, causing airports to become increasingly congested. How can we accommodate this increased traffic and at the same time alleviate traffic delays resulting from congestion? The response outside the US has been to set a maximum number of slots and use administrative procedures to allocate these among competing airlines, with the most important consideration being 'grandfather rights' to existing carriers. The United States, on the other hand, has used administrative procedures to allocate slots at only four airports. In all other cases, flights have been handled on a first-come, first-served basis, with aircraft queuing for the privilege of landing or taking off from a congested airport. While recognizing the advantages of slot systems in lessening delays, economists have criticized both approaches as being sub-optimal, and have advocated procedures such as slot auctions, peak-load pricing and slot trading to better utilize congested airports. Edited by an international team of air transport economists and drawing on an impressive list of contributors, Airport Slots provides an extremely comprehensive treatment of the subject. It considers the methods currently used to allocate slots and applies economic analysis to each. The book then explains various schemes to increase public welfare by taxing or pricing congestion, and describes alternate slot-allocation schemes, most notably slot auctions. In addition, Airport Slots outlines the complexities involved in slot-allocation methods, including the requirement for multiple slots - a take-off slot at London Heathrow is useless unless there is a landing slot available at Frankfurt for a London Frankfurt flight. Finally, the book explores the economic pitfalls of slot-allocation schemes; for example, controls may not be required if external delay costs are internalized by a dominant carrier at its hub. Airport Slots provides a valuable contribution to the debate on how best to limit airport congestion. The book's comprehensive treatment of the subject matter provides the reader with a 'one-stop' volume to explore airport congestion and slot-allocation schemes, offering valuable insights to academics and practitioners alike.

Contents: Introduction and overview, Achim I. Czerny, Peter Forsyth, David Gillen and Hans-Martin Niemeier; Part A The Current Slot Allocation System: How the present (IATA) slot allocation works, Claus Ulrich; Economic perspectives on the problem of slot allocation, Batool Menaz and Bryan Matthews; Airport slots: a primer, David Gillen. Part B Congestion, Slots, and Prices: Setting the slot limits at congested airports, Peter Forsyth and Hans-Martin Niemeier; The problem of charging for congestion at airports: what is the potential of modelling?, Milan Janic; Managing congested airports under uncertainty, Achim I. Czerny; Prices and regulation in slot constrained airports, Peter Forsyth and Hans-Martin Niemeier. Part C Airline Strategies and Competition: Do airlines use slots efficiently? Jörg Bauer; Slots and competition policy: theory and international practice, David Gillen and William G. Morrison; The dilemma of slot concentration at network hubs, David Starkie; How the market values airport slots: evidence from stock prices, David Gillen and Despina Tudor; Flight and slot valuations under alternative market arrangements, William Spitz. Part D International Experiences: The development of the regulatory regime of slot allocation in the EU, Matthias Kilian; Slots, property rights and secondary markets: efficiency and slot allocation at US airports, Daniel M. Kasper. Part E Auctions and Alternatives: Auctions - what can we learn from auction theory for slot allocation?, Kenneth Button; Formal ownership and leasing rules for slots, Erwin von den Steinen. Part F Reforming the Slots System: Extraction of economic rent under various airport slot allocation approaches, Kenneth Button; The slot allocation philosophy at the EU, Frederik Sørensen; Airport slots: perspectives and policies, Peter Forsyth; References; Appendix, Natalie McCaughey, Peter Forsyth and David Starkie; Index.

Professional Reference

Achim I. Czerny is a Research Associate at the Workgroup for Infrastructure Policy of Berlin University of Technology, Berlin, Germany. Professor Peter Forsyth is a Lecturer at the Department of Economics at Monash University, Victoria, Australia. David Gillen is YVR Professor of Transportation Policy, Operations and Logistics Division at the Sauder School of Business, University of British Columbia, Vancouver, Canada. Professor Dr Hans-Martin Niemeier is a Lecturer at the Department of Nautical Sciences and International Economics at the University of Applied Science, Bremen, Germany.