James D. Reitzes, Brendan McVeigh, Nicholas Powers
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.
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