Bill Blatts: Auction Charges for Airport Landing Slots. A presentation at the TheIU.org 2013 Conference 'Economics for Conscious Evolution', London, UK, July 2013.
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Bill Blatts: Auction Charges for Airport Landing Slots
1. Auction Charges for Airport
Landing Slots
For presentation to the
International Union for
Land Value Taxation
London Conference, July,
2013
2. Total Rank %
Passengers Change Change
1 Hartsfield–Jackson Atlanta International Airport Atlanta, Georgia, United States 95,462,867 3.30%
2 Beijing Capital International Airport Chaoyang, Beijing, China 81,929,689 4.50%
3 London Heathrow Airport Hillingdon, London, United Kingdom 70,038,857 0.90%
4 Tokyo International Airport Ōta, Tokyo, Japan 67,788,722 1 8.30%
5 O'Hare International Airport Chicago, Illinois, United States 67,091,391 1 0.40%
6 Los Angeles International Airport Los Angeles, California, United States 63,687,544 3.00%
7 Paris Charles de Gaulle Airport Roissy, Tremblay, Mitry-Mory, Île-de-France,France 61,611,934 1.10%
8 Dallas-Fort Worth International Airport Dallas-Fort Worth, Texas, United States 58,591,842 1.40%
9 Soekarno-Hatta International Airport Cengkareng, Tangerang, Banten, Indonesia 57,730,732 3 14.40%
10 Dubai International Airport Garhoud, Dubai, United Arab Emirates 57,684,550 3 13.20%
11 Frankfurt Airport Frankfurt, Hesse, Germany 57,520,001 2 1.90%
12 Hong Kong International Airport Chek Lap Kok, Hong Kong, China 56,064,248 2 5.20%
13 Denver International Airport Denver, Colorado, United States 53,156,278 2 0.60%
14 Suvarnabhumi Airport Bang Phli, Samut Prakan, Thailand 53,002,328 2 10.60%
15 Singapore Changi Airport Changi, East Region, Singapore 51,181,804 3 10.00%
16 Amsterdam Schiphol Airport Haarlemmermeer, North Holland, Netherlands 51,035,590 2 2.60%
17 John F. Kennedy International Airport Queens, New York City, New York, United States 49,293,587 3.10%
18 Guangzhou Baiyun International Airport Huadu, Guangzhou, Guangdong, China 48,548,430 1 7.80%
19 Madrid Barajas Airport Madrid, Spain 45,175,501 4 9.00%
20 Atatürk International Airport Istanbul, Turkey 44,992,420 10 20.10%
21 Shanghai Pudong International Airport Pudong, Shanghai, China 44,880,164 8.30%
22 San Francisco International Airport San Mateo County, California, United States 44,431,894 8.60%
23 McCarran International Airport Las Vegas, Nevada, United States 41,666,527 4 0.50%
24 Charlotte Douglas International Airport Charlotte, North Carolina, United States 41,226,035 2 5.60%
25 Phoenix Sky Harbor International Airport Phoenix, Arizona, United States 40,452,009 2 0.30%
Rank Airport Location
3. Total Rank %
Cargo ChangeChange
(Metric
Tonnes)
1 Hong Kong International Airport Chek Lap Kok, Hong Kong 4,062,261 2.20%
2 Memphis International Airport Memphis, Tennessee, United States 3,916,535 2.50%
3 Shanghai Pudong International Airport Pudong, Shanghai, China 2,939,157 5.30%
4 Incheon International Airport Seoul National Capital Area, South Korea 2,456,724 1 3.30%
5 Stevens Anchorage International Airport Anchorage, Alaska, United States 2,449,551 1 3.70%
6 Dubai International Airport Dubai, United Arab Emirates 2,267,365 3.10%
7 Louisville International Airport Louisville, Kentucky, United States 2,187,766 1 0.90%
8 Paris-Charles de Gaulle Airport Central, France 2,150,950 1 6.50%
9 Frankfurt Airport Frankfurt, Hesse, Germany 2,066,432 2 6.70%
10 Narita International Airport Narita, Chiba, Kantō, Honshū, Japan 2,006,173 3.10%
11 Miami International Airport Miami, Florida, United States 1,929,889 1 4.90%
12 Singapore Changi Airport Changi, East Region, Singapore 1,898,850 1 3.00%
13 Beijing Capital International Airport Chaoyang, Beijing, China 1,787,027 1 6.00%
14 Los Angeles International Airport Los Angeles, California, United States 1,688,351 1 3.70%
15 Taiwan Taoyuan International Airport Dayuan, Taoyuan, Taiwan, Republic of China 1,577,728 3.10%
16 London Heathrow Airport Greater London, United Kingdom 1,556,203 0.70%
17 O'Hare International Airport Chicago, Illinois, United States 1,512,186 1 3.00%
18 Amsterdam Airport Schiphol Haarlemmermeer, North Holland, Netherlands 1,511,824 1 2.40%
19 Suvarnabhumi Airport Greater Bangkok,Thailand 1,345,487 1 1.80%
20 John F. Kennedy International Airport New York City, New York, United States 1,283,663 1 5.50%
21 Guangzhou Baiyun International Airport Baiyun, Guangzhou, Guangdong, China 1,246,467 5.60%
22 Indianapolis International Airport Indianapolis, Indiana, United States 932,105 2.70%
23 Tokyo International Airport Ōta, Tokyo, Kantō, Honshū, Japan 909,684 3.60%
24 Shenzhen Bao'an International Airport Bao'an District, Shenzhen, Guangdong, China 854,901 3.50%
25 Leipzig/Halle Airport Leipzig, Germany 846,092 2 13.70%
26 Doha International Airport Doha, Qatar 844,532 1 4.50%
27 Newark Liberty International Airport Newark, New Jersey, United States 743,762 1 7.50%
28 Cologne Bonn Airport Cologne, Germany 730,054 1 0.50%
29 Kansai International Airport Izumisano/Sennan/Tajiri, Osaka, Japan 723,148 1 2.70%
30 Kuala Lumpur International Airport Sepang, Selangor, Malaysia 702,227 0.10%
Rank Airport Location
WORLD'S BUSIEST AIRPORTS BY CARGO TRAFFIC
4. Total Rank
Movements Change
1 Hartsfield–Jackson Atlanta International Airport ATLANTA GA, US 923 996 2.7%
2 O'Hare International Airport CHICAGO IL, US 878 798 0.4%
3 Los Angeles International Airport LOS ANGELES CA, US 702 895 5.4%
4 Dallas/Fort Worth International Airport DALLAS/FORT WORTH TX, US 646 803 0.8%
5 Denver International Airport DENVER CO, US 628 796 0.2%
6 Charlotte/Douglas International Airport CHARLOTTE NC, US 539 842 1 2.0%
7 Beijing Capital International Airport BEIJING, CN 533 257 1 3.0%
8 McCarran International Airport LAS VEGAS NV, US 531 538 1 5.1%
9 George Bush Intercontinental Airport HOUSTON TX, US 517 262 3 2.7%
10 Paris-Charles de Gaulle Airport PARIS, FR 514 059 2.8%
11 Frankfurt Airport FRANKFURT, DE 487 162 4.9%
12 London Heathrow Airport LONDON, GB 480 931 1 5.7%
13 Phoenix Sky Harbor International Airport PHOENIX AZ, US 461 989 2 2.8%
14 Philadelphia International Airport PHILADELPHIA PA, US 448 129 2 2.7%
15 Detroit Metropolitan Wayne County Airport DETROIT MI, US 443 028 1 2.1%
16 Amsterdam Airport Schiphol AMSTERDAM, NL 437 083 4 8.6%
17 Minneapolis–Saint Paul International Airport MINNEAPOLIS MN, US 436 506 1 0%
18 Barajas Airport MADRID, ES 429 390 1 1.0%
19 Toronto Pearson International Airport TORONTO ON, CA 428 764 1 2.5%
20 Newark Liberty International Airport NEWARK NJ, US 410 024 1 2.9%
21 Munich Airport MUNICH, DE 409 956 1 5.1%
22 John F. Kennedy International Airport NEW YORK NY, US 408 730 1 2.5%
23 San Francisco International Airport SAN FRANCISCO CA, US 403 564 4.2%
24 Miami International Airport MIAMI FL, US 394 572 4.9%
25 Tokyo International Airport| TOKYO, JP 379 670 4 10.8%
26 Logan International Airport BOSTON MA, US 368 987 2 4.6%
27 LaGuardia Airport NEW YORK NY, US 366 597 1.2%
28 Salt Lake City International Airport SALT LAKE CITY UT, US 358 002 2 1.3%
29 Mexico City International Airport MEXICO CITY, MX 350 032 1 3.0%
30 Guangzhou Baiyun International Airport GUANGZHOU, CN 349 259 - 6.1%
Rank Airport Location Change
WORLD'S BUSIEST AIRPORTS BY AIRCRAFT MOVEMENTS
7. Background: Airport Landing Slots
•
Four High-Density Rule airports in the US use
slot allocation as a way of rationing time
– Kennedy, Laguardia, O’Hare, Ronald Reagan
– All other airports have unallocated slots
– e.g. Laguardia has one arrival runway with 32
arrivals per hour
– Airlines control their own gates and schedules but
the FAA controls landing slots
– No man but he can have a right to what that is
16. Why schedule landing slots?
•
Unregulated, airlines may schedule operations
that exceed the safe arrival/departure rate of
an airport.
•
Airlines want as many flights as possible at
popular airports.
•
Airlines worry that they need to have a
stronghold at an airport in case slots become
regulated.
17. IATA Allocation Current System
•
Airlines own their time slots as property.
•
Airline annual reports list them as an asset.
•
Current holders of slots can sell or lease them,
but must return them if they are used less
than 80% of the time.
•
Airlines can exchange time slots
•
Slots are limited for takeoffs and landings per
hour or half hour.
18. UK airlines to value landing slots
as assets on balance sheets
•
Deloitte put the capital value of a pair landing
slots in 2012 at up to Heathrow at £25 to £30
million, followed by deGaulle, Gatwick and
Frankfurt depending on time of day.
•
At Heathrow there were a total of 9,562
landing slots last summer, 99% held by legacy
flag carriers, i.e., established airlines.
•
British Airways held 41%, BMI held 11%, and
Virgin Atlantic 3%.
19. Auctioning Airport Slots - 1
•
Slots are scarce at Heathrow and Gatwick
•
Lack of runway capacity means carriers don’t
schedule movements at the best times.
– Only carriers that afford to should use peak times.
•
Auctions allow mid-size carriers growth.
•
Auctions time slots should pair takeoff &
landing.
•
Peak slots go to airlines willing to pay, leading
to more efficient allocation.
20. Auctioning Airport Slots – 2
•
Auctions could be by the week or by season.
– Divide the week into 15 or 30 minute windows.
•
Bundle rights to use runway with stands
(gates) and terminal capacity.
– Bid must state aircraft size, destination, terminal
choice and passenger loads.
•
Create simultaneous multiple round auctions.
•
Allow a secondary market for trading slots.
•
Higher prices would favor large air carriers.
21. What money is involved?
•
Auction advocates mostly stress efficiency and
productivity.
•
FAA estimated in a 1989 paper that the
additional time costs to passengers and
additional operating costs to carriers was over
$5 Billion dollars in the US alone.
•
The cost is likely to be at least double today.
22. Current Airport Charge System
•
Slots are sold when congestion is sufficient
that auction sales are necessary – on a first-
come, first-served basis.
•
Charges are also priced on the basis of the
aircraft weight on the the runway. Light-
weight planes can tie up traffic forcing large
planes to wait.
•
Runway wear is a function of the square of the
weight on the tarmac of each wheel.
23. Charging Auction Rent for Time
Slots
•
Comports with all the principles of charges for
public goods. Prices should really be user fees.
•
Airport time slot auctions would be efficient,
non-distortionary, administratively simpler,
easily understandable, and even progressive.
•
Time slot auctions would give a moral ground
to the pricing system that now is lacking.
•
Time slot auctions are ecologically sound.