| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5127011 | Transportation Research Part B: Methodological | 2017 | 18 Pages |
â¢Hub-airport congestion pricing and capacity investmentareexamined.â¢Movement-basedper-flight and discriminatoryper-passengerchargesreachfirst-best.â¢Weight-basedflight charges ormarginal-cost pricing on passengersare second-best.â¢Public hubs under/overinvestinrunway capacityunder second-best airportcharges.â¢Private hubs overinvestwhen theirper-flight charges are movement-related.
This study examines hub-airport congestion pricing and capacity investment using a simple hub-spoke network model, in which hub-carrier scheduling causes both schedule delays and congestion delays. The “fixed-proportion assumption” is removed. We find the following. (i) A public hub airport requires both per-flight charges, which must be movement-related but cannot be weight-related, and discriminatory per-local and per-connecting passenger charges to reach the first-best outcome. (ii) Either weight-related per-flight charges or the marginal-operating-cost (MOC) pricing on local and/or connecting passengers cannot reach the first-best. (iii) First-best charges can lead capacity investment to be socially efficient. However, weight-related per-flights charges result in under-investment, whereas the MOC pricing results in over-investment in runway capacity. (iv) Private hubs that charge positive movement-related per-flight charges subsidize passengers through per-passenger charges. Finally, (v) movement-related per-flight charges lead private hubs to overinvest, whereas weight-related per-flight charges lead to either over- or under-investment.
