Allocating airport slots: a role for the market?

The paper analyses the problem of allocating landing slots at congested airports from an economic perspective. First, it considers the implications of an absence of market clearing prices, after which it examines the arguments for and against a secondary market in slots particularly drawing upon evidence from US airports. It concludes that a secondary market in slots will encourage a more efficient use of scarce slots but will do little to increase service competition when capacity is scarce. In addition, it will not offset the incumbent’s advantage. To address the latter an increase in landing charges is required.