Airport regulation: tackling congestion and environmental problems

This paper deals with alternative policy options for tackling congestion and environmental problems in the German airport sector. The starting point of the discussion is the planned privatisation of several airports in Germany, which is normally justified on productive efficiency grounds. However, when designing an appropriate airport policy, allocative efficiency must also be regarded, which means the efficient usage of existing facilities and timely investment in new capacity. Airport charges must not only reflect operational costs of infrastructure supply but also take account of the social costs of airport usage. This paper shows the inefficiency of the current regulatory rules for solving congestion and environmental problems and proposes alternative solutions, taking into account the need for planning stability not only for the airlines but also for the airports, which is a prerequisite for lowering the transaction costs of the air transport and infrastructure system.

Congestion pricing vs. slot constraints to airport networks

Congestion has become a problem for many airports throughout the world. Two different policy options to control congestion are analyzed in this paper: slot constraints and congestion pricing. In particular, our model takes into account that the airline industry is characterized by significant demand uncertainty. Furthermore, due to the network character of the airline industry, the demand for airport capacities normally is complementary. We show that this favors the use of slot constraints compared to congestion pricing from a social point of view. In contrast, for monopolistic airports, prices as instruments constitute a dominant choice. --Slots,uncertainty,monopolistic airports,regulation

Airport safety, capacity and investment

Paper presented at SurTech 2002, The Aviation Surveillance Technologies ConferenceThe title ‘Airport Safety, Capacity and Investment’ could potentially cover an enormous range of topics and approaches. Techniques used include probabilistic risk analysis, queueing theory, operational research, and cost benefit analysis (CBA). The aim here is both to give an impression of the whole subject and to focus on a few key topics. Surveillance technology plays an important part in delivering safety and capacity, but has to be seen in the larger system picture, particularly when investment is contemplated

Proposal For A Market-Based Solution to Airport Delays

With the clamor rising over airport delays and with both the Congress and the Administration considering remedies, this paper advocates the use of market mechanisms, specifically slot auctions, to promote efficient usage of airport capacity, reduce airport delays, and, more generally, promote competition.

Extended Definition of Capacity in Airport Systems

Nowadays the main airports throughout the world are suffering because their capacity are getting close to saturation due to the air traffic which is still increasing besides the economic crisis and oil prices. In addition, the forecasts predict an increase in air traffic of at least 3.6% until 2020. This situation makes very important to come up with solutions to alleviate capacity congestions in the main airports throughout the world. Capacity has been perceived traditionally as the factor to be addressed in airport systems and it is faced through a technical perspective. In this paper we propose to change the mind-set and view capacity of airport systems taking other factors than pure technical ones. The discussion is illustrated with the example of Schiphol Airport

Airport slot allocation

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Regulating privatized infrastructures and airport services

For a World Bank Institute course on transport privatization, the authors cover basic issues associated with the regulation of privatized airport infrastructure and services: 1) Economic characteristics of airport. Three types of activities are carried out in airports: essential operational services (aeronautical and non-aeronautical), handling services (aeronautical and non-aeronautical), and commercial activities. Demand for basic airport services is directly influenced by trip purpose. The two types of airline customers (business and leisure travelers) need different levels of flexibility and tend to travel at different times. Analyzing airport capacity (practical and saturation) under peak demand is essential to airport success. Among other important issues: runway cost, level and volume of service, pollution, congestion, and air traffic control. 2) Recent trends in the airport industry. The movement toward privatization may involve public ownership and private operation, including joint ventures; partial or majority divestiture; management contracts; and BOT (build-operate-transfer) schemes and variants, including BOOT (build-own-operate-transfer) schemes and LDO (lease-develop-operate) schemes. Or it may involve private ownership and operation. 3) Price regulation. Topics covered include traditional pricing policies'price regulation through an RPI-X formula; charges for congestion, noise, and other externalities; investment plans; and design of the regulatory system. 4) Regulation of quality in the industry. Topics covered: regulation of services to passengers (as measured by targets for check-in queues, immigration queues, baggage reclaim queues, concourse crowding, shopping, parking, and so on); fault repair times; average levels of passenger boarding and disembarkation and baggage delivery; safety; and investment obligation. 5) Performance indicators in the industry. Topics covered: strategic indicators and other financial indicators (including revenues), as well as indicators of cost, productivity, and quality of service.Transport and Trade Logistics,Public Sector Economics&Finance,Banks&Banking Reform,Environmental Economics&Policies,Decentralization,Roads&Highways,Airports and Air Services,Public Sector Economics&Finance,Banks&Banking Reform,Transport and Trade Logistics

On the Factors that Affect Airline Flight Frequency and Aircraft Size

This paper assesses the determinants of aircraft size and frequency of flights on airline routes by considering market demographics, airport characteristics, airline characteristics and route characteristics. The paper shows that frequency and aircraft size increase with population, income, and runway length. An increase in the proportion of managerial workers in the labor force or the proportion of population below the age of 25 results in greater frequency with the use of small planes. Slot constrained airports and an increase in the number of nearby airports lead to lower flight frequency with the use of smaller planes. Hubs and low cost carriers are associated with larger plane sizes and higher frequency, while regional airline ownership leads to higher frequency and the use of smaller planes. An increase in distance between the endpoints leads to lower frequency with the use of larger planes. As airport delay rises, airlines reduce frequency and use smaller planes, though when airport cancellations rise, flight frequency increases with the use of larger planes. This finding suggests airlines utilize frequency and aircraft size to hedge against flight cancellations.Airline; Frequency; Aircraft size; Markets