Search

This paper examines the federal legal requirements relating to airport ratemaking in the USA and demonstrates that establishing rates by ordinance or resolution is not only consistent with federal law, but also provides certain benefits to airport operators. Airport operators are permitted to establish rates and charges for the use of their airport by air carriers, by ordinance -- an agreement between the airport and the carriers serving the airport is not required. Rates established by ordinance must be fair, reasonable and not unjustly discriminatory and should be established on a compensatory basis; however, different methods may be used for recovering the airport's costs. Before establishing a new method for imposing rates and charges, and generally before establishing new rates periodically, an airport operator must consult with the air carriers using the airport. Although establishing rates and charges by ordinance is complicated and challenging, it provides necessary flexibility for airport operators and also establishes the baseline when seeking to negotiate an agreement with the air carriers operating at the airport. [ABSTRACT FROM AUTHOR]

Abstract: Chicago''s O’Hare airport is extremely congested, especially in the late afternoon and early evening. The paper uses a publicly available database to estimate the relationship between the number of flights wishing to depart and the delays they experience. This relationship is used to calculate congestion fees that provide airlines with incentives to move some flights out of the peak period and to slightly alter the scheduled departure time of other flights to avoid the rush of departures that occur on the hour. The very high fees at certain times of day point to the benefits that can be obtained from current plans to expand and reconfigure the airport to reduce delays in both good and bad weather. [Copyright &y& Elsevier]

This paper models and estimates congestion prices and capacity for large hub airports. The model includes stochastic queues, time-varying traffic rates, and endogenous, intertemporal adjustment of traffic in response to queuing delay and fees. Relative costs of queuing and schedule delays are estimated using data from Minneapolis-St. Paul. Simulations calculate equilibrium traffic patterns, queuing delays, schedule delays, congestion fees, airport revenues, airport capacity, and efficiency gains. The paper also investigates whether a dominant airline internalizes delays its aircraft impose. It tests game-theoretic specifications with atomistic, Nash-dominant, Stackelberg-dominant, and collusive-airline traffic. [ABSTRACT FROM AUTHOR]