Airport congestion pricing and passenger types

Airport congestion pricing and passenger types

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Article ID: iaor20112238
Volume: 45
Issue: 3
Start Page Number: 595
End Page Number: 604
Publication Date: Mar 2011
Journal: Transportation Research Part B
Authors: ,
Keywords: airport operations, congestion, price discrimination
Abstract:

We consider a public and congested airport served by airlines that may have market power, and two types of travelers with different relative values of time. We find that in the absence of passenger‐type‐based price discrimination by airlines, it can be useful to increase the airport charge so as to protect passengers with a great relative time value from excessive congestion caused by passengers with a low relative time value. As a result, the socially efficient airport charge can be substantially higher than what we learned from the recent literature on congestion pricing with non‐atomistic airlines.

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