Empirical assessment of competitive impacts of regulatory rules of airport slots redistribution View Homepage


Ontology type: schema:MonetaryGrant     


Grant Info

YEARS

2013-2015

FUNDING AMOUNT

N/A

ABSTRACT

One of the factors that generate the greatest losses of economic welfare in modern air transport is the lack of airport infrastructure. In a situation of shortage, congested airports are typically administered under a regime of allocation of "slots" - takeoff and landing schedules rigidly predetermined and distributed - which potentially creates barriers to entry of new airlines and has inductive effect of power market incumbents. There are rare possibilities for reallocation of airport slots endowed with attractive attributes for new rivals capable of actually enhancing the contestability of markets dominated by incumbents. Additionally, there is intense lobbying movements aiming at promoting regulatory capture of authorities. This paper aims to carry out an empirical study of the effects of airport congestion on the market power of firms, with special emphasis on the dominance of slots. By performing parameter estimation of a demand system based on discrete choice models of nested logit type and variants, we then develop simulations of the impact of regulatory reform on the allocation of airport infrastructure. In the simulations, we assume the hypotheses of the Bertrand-Nash type competitive equilibrium models. We then evaluate the effects and possibilities of a redistribution of slots in favor of airlines with smaller market share, focusing on metrics of relative market power. Some policy recommendations for the Brazilian air transportation will also be designed. (AU) More... »

URL

http://www.bv.fapesp.br/en/auxilios/82902/empirical-assessment-of-competitive-impacts-of-regulatory-rules-of-airport-slots-redistribution/

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