Abstract
Most of the previous works ignore the fact that equilibrium flights in self-profit maximization scenario are totally different from that in joint profit (social welfare) maximization scenario and take price difference (flight fare difference) between the two scenarios as congestion price, which is a passenger-based method. Most of all, the function of congestion pricing is to alleviate congestion by making airlines reduce flights at peak time. Therefore, the equilibrium flights under self-profit maximization should be the same as the ones under joint profit maximization after congestion prices are tolled. Flight-based congestion pricing method is provided in our paper. The analysis suggests no role for congestion pricing when total real flight production of all airlines is less than the equilibrium flights under joint profit maximization scenario. Otherwise, congestion tolls should be levied to all airlines. Furthermore, congestion price can be determined by solving the corresponding equations system.
Published Version
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