Airport Slots : International Experiences and Options for Reform

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 maynot be required if external delay costs are internalized by a dominant carrier at its hub.

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.



Contents
List of Figures ix
List of Tables xi
Acknowledgements xiii
Editors and Contributors xv
1 Introduction and Overview 1
Achim I. Czerny, Peter Forsyth, David Gillen and
Hans-Martin Niemeier
PART A: THE CURRENT SLOT ALLOCATION SYSTEM
2 How the Present (IATA) Slot Allocation Works 9
Claus Ulrich
3 Economic Perspectives on the Problem of Slot Allocation 21
Batool Menaz and Bryan Matthews
4 Airport Slots: A Primer 41
David Gillen
PART B: CONGESTION, SLOTS, AND PRICES
5 Setting the Slot Limits at Congested Airports 63
Peter Forsyth and Hans-Martin Niemeier
6 The Problem of Charging for Congestion at Airports: What is the
Potential of Modelling? 85
Milan Janic
7 Managing Congested Airports Under Uncertainty 111
Achim I. Czerny
8 Prices and Regulation in Slot Constrained Airports 127
Peter Forsyth and Hans-Martin Niemeier
PART C: AIRLINE STRATEGIES AND COMPETITION
9 Do Airlines Use Slots Efficiently? 151
Jörg Bauer
vi Airport Slots: International Experiences and Options for Reform
10 Slots and Competition Policy: Theory and International Practice 173
David Gillen and William G. Morrison
11 The Dilemma of Slot Concentration at Network Hubs 193
David Starkie
12 How the Market Values Airport Slots: Evidence from Stock Prices 205
David Gillen and Despina Tudor
13 Flight and Slot Valuations Under Alternative Market Arrangements 235
William Spitz
PART D: INTERNATIONAL EXPERIENCES
14 The Development of the Regulatory Regime of Slot Allocation in
the EU 251
Matthias Kilian
15 Slots, Property Rights and Secondary Markets: Efficiency and Slot
Allocation at US Airports 271
Daniel M. Kasper
PART E: AUCTIONS AND ALTERNATIVES
16 Auctions – What Can We Learn from Auction Theory for Slot
Allocation? 291
Kenneth Button
17 Formal Ownership and Leasing Rules for Slots 311
Erwin von den Steinen
PART F: REFORMING THE SLOTS SYSTEM
18 Extraction of Economic Rent Under Various Airport Slot
Allocation Approaches 321
Kenneth Button
19 The Slot Allocation Philosophy at the EU 345
Frederik Sørensen
20 Airport Slots: Perspectives and Policies 379
Peter Forsyth
Contents vii
Slots, Pricing and Airport Congestion: Some Key References 407
Appendix 411
Nathalie McCaughey; Peter Forsyth and David Starkie
Index 429