Airport Slot Research Articles

The use of auctions for allocating airport access rights

This paper considers the challenge of managing congestion at an airport by restricting the total number of flight operations at that airport. It reviews historical evidence, economic theory and data analysis related to the challenge of airport congestion management. It argues that this evidence presents a strong case for the use of a market mechanism to control access and more specifically for the use of periodic auctions to allocate limited term slot leases. It then shows that the existing body of knowledge and practical experience with the use of combinatorial auctions lead naturally to highly viable auction designs for the airport slot context. It further provides analysis of a variety of specific issues related to the use of auctions in the context of airport slots.

Airport slots: Can regulation be coordinated with competition? Evidence from Dublin airport

Slot regulations have implications for airport efficiency and for competition in aviation; this paper analyses the relationship between slot regulation and aviation competition drawing on the experience of the application of the EU slot rules at Dublin airport. It concludes the best way to promote competition in aviation is to avoid choosing an administrative basis of slot allocation, especially when a new airport is being developed, opting instead for market-compatible mechanisms, whether slot trading or runway charges that are differentiated by scarcity value.

Airport Slot Allocation Problems

We study airport slot allocation problems during weather-induced congestion. These real-life matching problems are important to airlines as the costs of delays are significant compared to their profits. We introduce a new mechanism, Multiple Trading Cycles (MTC), to allocate landing slots. In contrast to the currently used mechanism, MTC is individually rational, Pareto efficient, strategy-proof, non-manipulable by postponing a flight cancellation, and respects property rights over slots. In addition, it is core-selecting when preferences are strict. The "You Request My House - I Get Your Turn" mechanism (Abdulkadiroglu and Sonmez, 1999) is a special case of MTC.

A Congestion Policy Game

This paper considers networks with two or three complementary airports. In each case, two airports independently choose between slot and pricing policies, where slot policies involve grandfather rules. We show that equilibrium policies involve slots when airport profits do not matter and pricing policies when airport profits matter. We further show that the equilibrium slot policies reach the first-best passenger quantities when congestion effects are absent. Otherwise, equilibrium slot policies will lead to excessive and equilibrium pricing policies to too low passenger quantities relative to the first best. Numerical examples indicate that slot policies can be beneficial relative to pricing policies when time valuations are low and vice versa when time valuations are high. The analysis formally distinguishes the sources for the different outcomes under slot and pricing policies by distinguishing between a variable effect and a distribution effect. The variable effect captures that decision variables are quantities in the case of slot policies and prices in the case of pricing policies. The distribution effect captures that airport slot allocation is based on grandfather rules.

SOSTA: An effective model for the Simultaneous Optimisation of airport SloT Allocation

In this paper, we propose SOSTA, an integer linear programming model for optimisation of the airport slot allocation process on the European scale. The main contribution of SOSTA is the simultaneous allocation of slots at all Europan airports, while applying the existing regulation and practices. Additionally, SOSTA considers aircraft rotations through the turnaround time constraints, which is another novel contribution. In an experimental analysis based on real data, we show the benefits of the simultaneous allocation, and the flexibility and capabilities of SOSTA, along with the extremely good computational performance.

Allocating Airport Slots

Allocating Airport Slots

Priority rules as a concept for the usage of scarce airport capacity

The limited capacity available at airports regularly leads to an imbalance between supply and demand at busier airports. It is the runway systems at such airports which often set limitations on the number of possible flight clearances. In addition, existing systems of regulation sometimes use strategic resource allocation as a condition for access to specific infrastructure, as for instance the airport slot allocation in accordance with EU Regulation 95/93 and its amendments in Europe. These regulation systems do indeed restrict the number of demanded slots to a level which the capacity can, on average, handle, but this alone cannot prevent unnecessary waiting times before customers are served. One reason for this can be temporary fluctuations in the capacity on offer (e.g. due to weather influences) and another is deviations from the forecast demand (e.g. due to delayed departures or short-notice changes to flight routes of an aircraft). Today’s system applies a first-in-first-out system in allocating runway capacity to demand in the form of planned flights. In order to treat all flights equally, deficits in utilization of the available slots are accepted. The concept presented in this Paper allows user-driven priorities to be set and true-to-schedule user behaviour to be promoted. It furthermore enables prioritization of high-profitability flights during clearance in cases where there are capacity deficits. We show which runway system prioritization is suitable in aviation to increase efficiency in resource utilization. We present KPIs which would be required by an airport to make this effect appropriately measurable.

Air Traffic Flow Management slot allocation to minimize propagated delay and improve airport slot adherence

In Europe, one of the instruments at the Network Manager’s (NM) disposal to tackle demand-capacity imbalance is to impose ground, i.e. Air Traffic Flow Management (ATFM), delays to flights. To compensate for anticipated delays and improve on-time performance, Aircraft Operators usually embed a buffer time in their schedules. The current practice for allocating ATFM delays does not take into account if flights have any remaining schedule buffer to absorb ATFM delay and reduce delay propagation to subsequent flights. Furthermore, the policy presently employed is to minimize ATFM delays, an order of magnitude of half a minute per flight, while propagated delays are approximately ten times higher. In this paper, we explore the possibility to control ATFM delay distribution in a way so as to minimize delay propagated to subsequent flights, but also to increase flights’ adherence to airport slots at coordinated airports. To this aim, we propose a two-level mixed-integer optimization model to solve en-route demand-capacity imbalance problem and further improve airport slot adherence. The rationales behind the research are drawn from practical experience, while the model proposed is compatible with the one currently being used by the NM, making it easy to implement. We test the model on two real-world case studies and conduct ex post analysis to test the effects of violation of model assumptions on results. The results show that it is possible to use the proposed methodology to lower delay propagated to subsequent flights and at the same time to improve airport slot adherence. In addition, they suggest that the current regulatory settings aiming to minimize ATFM delay minutes, as well as operational implementation thereof, are neither necessarily fully aligned with the desires and operating goals of Aircraft Operators, nor they improve the predictability of operations in the network.

Economics at the Antitrust Division 2015–2016: Household Appliances, Oil Field Services, and Airport Slots

This article provides an overview of economic analysis in three prominent merger investigations and litigations: Electrolux’s proposed acquisition of General Electric’s appliance division, Halliburton’s bid for Baker Hughes, and United Airline’s attempt to acquire additional airport slots at Newark Liberty International Airport. In each, the parties abandoned their proposed transaction after the Division had filed suit to block the acquisition. While we cannot recount all the analyses underpinning these outcomes, we hope to provide some insights into the challenges of enforcing antitrust law and the way in which economic analysis in particular is used to address those challenges.

Allocating Airport Slots - The History of Early Applied Experimental Research

The aviation industry changed dramatically in the wake of the Airline Deregulation Act of 1978. My paper looks at an element of this transformation – the policy according to which take off and landing slots were allocated at congested airports including a proposal to change this policy – an issue that affected millions of passengers annually. Caltech economists and experimentalists David Grether, Mark Isaac and Charles Plott were hired by the Civil Aviation Board to study the existing slot scheduling committees that used unanimity voting rule as well as alternative slot allocation mechanisms. I use their study to trace and depict the emerging practice of applied experimental research as a multilayered endeavor which involves an interplay among theoretical, empirical, and practical considerations (akin to economic modeling) that allows the experimenter to move from the naturally occurring phenomenon to its study in a laboratory only to return back with a policy recommendation. This demonstrates that applied experimental economics research went hand in hand with the emergence and rise of experimental economics in the 1980s.

System analysis of airport capacity and slot coordinatıon at Ataturk airport

ABSTRACT Airline service is a huge and complicated process that needs to be handled, basically in a routine operation an airline has to have numbers of services in different level such as ground handling, passenger/cargo terminal service, airport navigation service, customs service, security service etc. In aviation sector, on time and adequate service is priority for airlines. Airline operation must be handled with great timing effort because producing and consuming take place at the same time. Therefore, to arrange each task in a proper way, airport capacity should be planned, monitored and managed in advance by assigning time, park position and boarding/unloading process. Airport capacity is detected with the assessment of construction of facilities and other factors affecting the capacity. After release of capacity this acquired capacity is allocated to the demanders according to specific conditions and privileges. This paper has three stages in general: In the first stage of this paper, the theoretical research of airport slot coordination system has been examined empirically. In the second part, with the data acquired by study in practice airport coordination, slot, slot types, slot allocation and slot allocation types has been stated with tables. In the final part of the study, the categorization of slot allocation was discussed and evaluated by employees working at both airport and airline business by means of in-depth interview. With analyzing the obtained results, the slot coordination system used in Ataturk Airport has been identified and on the purpose of improvement of system some recommendations have been made. Keywords: Airport, airport slots, factors affecting airport capacity, airport slot coordination system, slot allocation JEL Classification: L93, R41, L98.

Entry patterns of low-cost carriers in Hong Kong and implications to the regional market

This study aims to provide a better understanding of Asia's low-cost carriers (LCCs) by empirically analysing their route entry patterns in Hong Kong. Two alternative models have been tested, namely a standard probit model and a generalized least squares estimation. Consistent findings from the two models suggest that LCCs in Asia have a preference for large markets with big populations, high incomes and high traffic volume. On the other hand, the dominance of incumbent full service airlines (FSAs), fierce route competition and the lack of secondary airports are not critical to the growth of LCCs. However, government regulations and airport access are main impediment factors. Despite the adoption of long-distance low-cost models by the region's airlines, geographic distance still plays an important role in LCCs' entry decisions. For the growth of low-cost travel and associated benefits in the tourism industry and overall economy, it is important for governments in the region to liberalize aviation markets, provide sufficient airport capacity, and promote efficient allocation of airport slots.

Airport slot coordination system: an implementation at Ataturk Airport

To realize the airline service process, an airline has to have numbers of services in different level such as ground handling, passenger/cargo terminal service, airport navigation service, customs service, security service etc. Because of the concept of the service, producing and consuming take place at the same time. Therefore, airport capacity should be planned, monitored and managed in advance by assigning time, park position and boarding/unloading process. Airport capacity is detected with the assessment of construction of facilities and other factors affecting the capacity. This acquired capacity is allocated to the demanders according to specific conditions and privileges. In the first stage of this paper, the theoretical research of airport slot coordination system has been examined. In the second part, with the data acquired by study in practice airport coordination, slot, slot types, slot allocation and slot allocation types has been stated with tables. In the final part of the study, the categorization of slot allocation has been discussed and evaluated by employees working at both airport and airline business by means of semi-structured interview. With analyzing the obtained results, the slot coordination system used in Ataturk Airport has been identified and on the purpose of improvement of system some recommendations have been made

Incentive-based Slot Allocation for Airports

The demand regulation for airport infrastructures is managed, depending on the location within the world, typically by slot allocation schemes. Slot allocation for the biggest part of the relevant airports is organized in accordance with the IATA Worldwide Slot Guidelines, IATA-WSG. In Europe, Regulation 95/93 including its amendments as local rule with relation to IATA-WSG builds the basis for airport slot allocation. Key element of the slot allocation according to this principle is the fragmentation of the declared capacity into time niches, better known as airport slots. A weak spot with this is the usage of the capacity estimation which has to cover a full scheduling season. Those having been allocated a slot are allowed to make use of the airport infrastructure in general. Demanding airlines without a slot for this airport may request spontaneously a free slot, if available. If not applicable, additional demand's requests are waived. This system limits the serviced demand and assures thereby a reliable level of service at service process stations, e.g. the runway, apron, or terminal. From a strategic point of view this capped demand may cause economic losses due to waived additional airport charges also in situations with capacity well above the average expected value, which was used to calculate the official declared capacity. A second problem with resource usage efficiency arises instead of conservative calculations regarding the available capacity by the variance in resource usage by slot holding airlines. Delayed use of infrastructure may cause excessive demand in later time frames, instead the slot allocation and its levelling effect. Knock-on delays affect the following turnarounds and may destabilize network-wide connections. Especially for the resilience of door-to-door managed networks, process stability is a key ingredient for success. Arrival and departure deviations in aviation may preclude sustainable co-modality by its variability. Both primary as well as secondary delays may jeopardize connections between different or same modes of transportation, and the affected passenger may be stranded at least at the mode's transfer point. By introducing an incentive to avoid primary delays and by foreclosing the propagation of secondary delays within networks, an increase in level of service like process stability or punctuality is realizable. The research topic was to evaluate possibilities to increase resource usage efficiency by changing the methods of slot allocation. Therefore, a priority-based system was created and verified by a simplified microscopic simulation model. Priorities were allocated in advance, representing different categories of resource availability estimation. A second extension to the system was given by a performance-based component. The preselected priority was allocated to the demanding aircraft with up-/downgrades depending on its own punctuality. Despite the increased data exchange volume needed to realize this resource allocation scheme in reality, benefits in resource efficiency and turnaround stability are clearly observable. Different priorities in scheduling are an incentive to schedule with different levels of availability of infrastructures already during strategic planning, whereas the vehicle-oriented performance-based prioritization in operations is suitable to avoid any secondary delay propagation and to increase the system's fairness.

Slot auction in an airport network with demand uncertainty

This paper investigates the effectiveness of airport slot auction by developing a two-stage model, which distributes slots among competing airlines using an ascending-bid multi-unit auction. Airlines assign different values to slots at peak and off-peak periods, and each carrier has its private (subjective) forecast of future demand. Conditional on the slots available to them, airlines compete in frequency, fare, and aircraft size over a congested airport network. The market outcome under such a scheme is benchmarked to those under an ex ante allocation and an ex post allocation by a social planner. Comparison results suggest that the auction-based scheme is inferior to the other two schemes when there is little fluctuation in demand, whereas the auction-based system is more effective when there is substantial demand uncertainty. Auctioning some grandfathered slots can improve social welfare but the marginal effect may diminish quickly.

Dominant carrier performance and international liberalization – The case of Northeast Asia

This study investigates the links between domestic market regulation, dominant airline performance, and international market liberalization in Northeast Asia (NEA). The study focuses on China, where substantial regulations are still present in the aviation market, particularly in areas such as route entry, airport slot allocation, input supply, and aviation support services. These regulations limit the ability of entrant airlines to compete in hub airports, and allow dominant airlines to strengthen their market power and achieve substantial growth at the expense of their competitors. Current Chinese regulations assist major state-owned carriers by suppressing domestic competition, particularly in markets linked to hub airports. If national policy in China continues to be guided by requirements created to support the dominant airlines, in the short term there will be limited liberalization on routes linked with hub airports. Promoting LCC services in the region is one practical alternative for the short term which could prevent major disruption to network carriers. This investigation suggests that Chinese airlines would be less resistant to bilateral liberalization with ASEAN, Oceanian or European nations than they would with other regions, as they are well positioned in these markets, and may be able to develop their hub airports into Asia's gateways to Europe. In the long term, however, there is no substitute for full liberalization if NEA governments want their nations to fully benefit from enabling their carriers and hub airports to achieve global competitiveness.

Effect of slot trading on route-level competition: Evidence from experience in the UK

This paper examines the effect of airport slot trading on route-level competition using data on slot trades in the UK. The estimation results suggest that the slot trades among partner carriers contributed to slightly increased competition measured in terms of the number of competitors per route, whereas the slot trades between rival carriers had a negative effect on the number of competitors at the route level. The results suggest that carriers seem to have used the slots obtained from their rivals not to compete with each other but to strengthen their dominance on their existing routes. This behavior is considered to be derived from the bilateral nature of slot trading, which facilitates mutual forbearance among competitors. To cope with the potential anticompetitive effect of mutual forbearance, it would be worthwhile to explore slot-trading schemes that make it harder for carriers to take advantage of multimarket contact as well as alternative methods of primary slot allocation.

An incentive pricing mechanism for efficient airport slot allocation in Europe

We define a supervised market mechanism to deal with the airport slot allocation problem. This mechanism is based on the principles underlying the AIP model for regulation of radio spectrum. Incentive prices for airport slots should reflect an estimate of the marginal value of each slot to end users. We compute this value by assessing the downgrade in the provision of the air transport service, both in terms of quantity (i.e. number of transported passengers) and quality (i.e. passenger travel times), should access to any given slot be denied. Incentive prices consider interdependencies among slots at different airports. We argue that, in principle, incentive prices may better align private and social decisions over the use of slots compared with the outcomes of pure market interactions (such as auctions and trading).

The untolled problems with airport slot constraints

This paper examines the efficiency and practicality of airport slot constraints using a deterministic bottleneck model of landing and takeoff queues. It adapts this congestion pricing model to determine the optimal timing and quantity of slot permits for any number of slot windows. Aircraft choose their optimal operating times subject to the slot constraints, and airport queues adjust endogenously. The number and length of slot windows affects the congestion levels and efficiency gains. The atomistic bottleneck model is extended to include self-internalizing dominant traffic and atomistic fringe traffic. The model raises questions about the implementation of slot constraints that do not arise in standard congestion models. The theory explains (Daniel׳s, 2011) empirical findings that slot-constraints at Toronto are ineffective and suggests that recent proposals for slot constraints at US airports would be similarly ineffective. Effective slot constraints require many narrow slot windows, making slot auctions or markets difficult to implement.

Air transport liberalization and airport slot allocation: The case of the Northeast Asian transport market

We develop a differentiated Bertrand high speed rail and airline network game which analyzes the effects of international air transport liberalization, regional open skies policies, domestic inter-modal competition and airport slot allocation. The model is applied to the transport market in Northeast Asia using a counter-factual approach, demonstrating the model’s capability of evaluating practical policies utilizing market data observed on the routes under investigation. Our modeling results suggest that air transport liberalization will benefit both consumers and the aviation industry in the region albeit not necessarily on an equal basis across or within groups. Much of the welfare gains are derived from higher frequency after liberalization, which increases service quality, hence consumer utility. Open skies policies that include pure cabotage which permit carriers to compete in the domestic markets of a foreign country, will increase competition, frequency and reduce fares below current levels. Airport slot allocation policies play an important role in the realization and distribution of potential welfare gains related to liberalization. Therefore, government agencies should implement liberalization and airport slot allocation policies jointly.