Using the Revenues from Airport Pricing

Publication Date: November 2007

Publisher: Reason Foundation

Author(s): David Z. Plavin

Research Area: Transportation

Type: Report

Abstract:

Federal officials have begun, at last, to look, seriously, at the possibility of using some form of airport pricing to allocate capacity and reduce congestion at the delay-plagued New York airports. The most commonly discussed alternative is congestion pricing, under which traditional weight-based landing fees could be supplemented or replaced by prices for landings and/or take offs, which would vary directly with the demand at particular times of day. The other alternative is slot auctions, which can produce very similar economic effects but for which clear legal authority is not readily apparent.

Congestion pricing in some form would be the most productive solution to the rampant over-scheduling and delays that characterize our congested airports, today. Until it is implemented, near-term congestion will only get worse, because the airlines want to be on the ground with the most flights in their base schedules when FAA moves to impose a "voluntary" schedule reduction on the incumbents.