Competitive Effects of Exchanges or Sales of Airport Landing Slots

Competitive Effects of Exchanges or Sales of Airport Landing Slots We investigate the competitive effects of exchanges or sales of airport landing slots, using a model where airlines allocate their slot endowments across routes consistent with a Cournot–Nash equilibrium. With symmetric endowments, an increase in the number of slot-holding airlines raises social welfare and consumer surplus. Under asymmetric slot endowments, larger slot holders serve “thin” demand routes that are not served by smaller slot holders. Transfers of slots from larger to smaller slot holders increase social welfare and consumer surplus; however, fewer routes may be served. These results may be reversed if airlines face substantial route-level fixed costs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Competitive Effects of Exchanges or Sales of Airport Landing Slots

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Publisher
Springer US
Copyright
Copyright © 2014 by Springer Science+Business Media New York
Subject
Economics / Management Science; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-014-9438-8
Publisher site
See Article on Publisher Site

Abstract

We investigate the competitive effects of exchanges or sales of airport landing slots, using a model where airlines allocate their slot endowments across routes consistent with a Cournot–Nash equilibrium. With symmetric endowments, an increase in the number of slot-holding airlines raises social welfare and consumer surplus. Under asymmetric slot endowments, larger slot holders serve “thin” demand routes that are not served by smaller slot holders. Transfers of slots from larger to smaller slot holders increase social welfare and consumer surplus; however, fewer routes may be served. These results may be reversed if airlines face substantial route-level fixed costs.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Aug 27, 2014

References

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