Airport capacity and congestion when carriers have market power

Anming Zhang; Yimin Zhang

doi:10.1016/j.jue.2006.02.003

Airport capacity and congestion when carriers have market power

Anming Zhang
, Yimin Zhang

City University of Hong Kong

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

174 Citations (Scopus)

Abstract

Several authors recently pointed out that congestion pricing has no (or only partial) place at an airport when carriers have market power, since carriers themselves will internalize congestion. This article investigates the impact of such self-internalization on the airport, as this would effectively deprive the airport of an important source of funds for its capacity investment. We find that airline market structure has no impact on airport capacity and congestion for a welfare-maximizing airport that receives public subsidy, while somewhat surprisingly, both a private airport and a budget-constrained public airport would tend to over-invest in capacity when carriers have market power. © 2006 Elsevier Inc. All rights reserved.

Original language	English
Pages (from-to)	229-247
Journal	Journal of Urban Economics
Volume	60
Issue number	2
DOIs	https://doi.org/10.1016/j.jue.2006.02.003
Publication status	Published - Sept 2006

Bibliographical note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

Funding

We are very grateful to two anonymous referees, Yuichiro Yoshida and especially Jan Brueck-ner for their perceptive and helpful comments on earlier version(s) of the paper. We also thank participants of the International Symposium on Spatial Economics and Transportation in Sendai, Japan, and the 9th Air Transport Research Society World Conference for helpful comments. Financial support from the Social Science and Humanities Research Council of Canada (SSHRC) is gratefully acknowledged.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 11 Sustainable Cities and Communities

Research Keywords

Airports
Capacity investment and financing
Congestion toll
Market power

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10.1016/j.jue.2006.02.003

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Cite this

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abstract = "Several authors recently pointed out that congestion pricing has no (or only partial) place at an airport when carriers have market power, since carriers themselves will internalize congestion. This article investigates the impact of such self-internalization on the airport, as this would effectively deprive the airport of an important source of funds for its capacity investment. We find that airline market structure has no impact on airport capacity and congestion for a welfare-maximizing airport that receives public subsidy, while somewhat surprisingly, both a private airport and a budget-constrained public airport would tend to over-invest in capacity when carriers have market power. {\textcopyright} 2006 Elsevier Inc. All rights reserved.",

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AB - Several authors recently pointed out that congestion pricing has no (or only partial) place at an airport when carriers have market power, since carriers themselves will internalize congestion. This article investigates the impact of such self-internalization on the airport, as this would effectively deprive the airport of an important source of funds for its capacity investment. We find that airline market structure has no impact on airport capacity and congestion for a welfare-maximizing airport that receives public subsidy, while somewhat surprisingly, both a private airport and a budget-constrained public airport would tend to over-invest in capacity when carriers have market power. © 2006 Elsevier Inc. All rights reserved.

KW - Airports

KW - Capacity investment and financing

KW - Congestion toll

KW - Market power

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DO - 10.1016/j.jue.2006.02.003

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JF - Journal of Urban Economics

IS - 2

ER -

Airport capacity and congestion when carriers have market power

Abstract

Bibliographical note

Funding

UN SDGs

Research Keywords

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