A Practical Perspective on Airport Demand Management

Abstract

This paper presents a practical perspective on the subject of airport demand management, primarily in the context of policies that might be viable for the United States. It first summarizes a survey of airport demand management systems currently in use around the world. These systems rely on either a purely administrative procedure or, in a few cases, on hybrids of administrative and economic measures. It then describes briefly the US environment and uses a review of events at New York’s LaGuardia Airport (LGA) during 2000 and 2001 as a starting point for discussing the potential effectiveness of demand management measures in reducing delay costs and the magnitude of the externalities associated with airport congestion. Some of the “market-based“ demand management systems that were suggested in 2001 for adoption at LGA are also reviewed briefly. Based on these considerations, it is concluded that any demand management systems that may be adopted in the United States in the next several years will be hybrids of economic and administrative rules. They will use economic mechanisms as their primary instrument for allocating capacity, but will be supplemented by provisions aimed at maintaining connections to small communities, ensuring access by general aviation, new entrants, and smaller carriers, and encouraging continuity of service. Moreover, these systems will have rather complex rules, require significant resources for their implementation, and be supported by extensive technical analyses. Only a few, but important, airports appear to be good candidates. As long as the principal objective is congestion relief, these are airports that generally serve a large number of competing carriers with no dominant carrier present.