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Congestion pricing of Canadian airports

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  • Joseph I. Daniel
Abstract
Under congestion pricing, Canadian airports would annually save between $72 and $105 million. Social costs per landing and takeoff decrease about $300 at Toronto and Vancouver and $50 at Calgary and Montreal. Slot constraints fail to eliminate this airport congestion. Congestion prices are lower on average than existing weight-based prices. Current airport capacity accommodates at least five more years of traffic growth before congestion reaches current levels. Substantial welfare gains occur even if dominant airlines already internalize their self-imposed delays. This article calculates equilibrium congestion pricing schedules, traffic rates, queuing delays, layover times, and connection times by time of day.

Suggested Citation

  • Joseph I. Daniel, 2011. "Congestion pricing of Canadian airports," Canadian Journal of Economics, Canadian Economics Association, vol. 44(1), pages 290-324, February.
    • Handle: RePEc:cje:issued:v:44:y:2011:i:1:p:290-324
    DOI: 10.1111/j.1540-5982.2010.01633.x
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    Cited by:

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    3. Noruzoliaee, Mohamadhossein & Zou, Bo & Zhang, Anming, 2015. "Airport partial and full privatization in a multi-airport region: Focus on pricing and capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 45-60.
    4. Dixit, Aasheesh Kumar & Shakya, Garima & Jakhar, Suresh Kumar & Nath, Swaprava, 2023. "Algorithmic mechanism design for egalitarian and congestion-aware airport slot allocation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).
    5. Lin, Ming Hsin & Zhang, Yimin, 2017. "Hub-airport congestion pricing and capacity investment," Transportation Research Part B: Methodological, Elsevier, vol. 101(C), pages 89-106.
    6. Czerny, Achim I. & Zhang, Anming, 2014. "Airport peak-load pricing revisited: The case of peak and uniform tolls," Economics of Transportation, Elsevier, vol. 3(1), pages 90-101.
    7. Daniel, Joseph I, 2014. "The untolled problems with airport slot constraints," Economics of Transportation, Elsevier, vol. 3(1), pages 16-28.
    8. Ater, Itai, 2012. "Internalization of congestion at US hub airports," Journal of Urban Economics, Elsevier, vol. 72(2), pages 196-209.
    9. Hu, Rong & Chen, Lin & Zheng, Lijun, 2018. "Congestion pricing and environmental cost at Guangzhou Baiyun International Airport," Journal of Air Transport Management, Elsevier, vol. 70(C), pages 126-132.
    10. Li, Zhi-Chun & Huang, Hai-Jun & Yang, Hai, 2020. "Fifty years of the bottleneck model: A bibliometric review and future research directions," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 311-342.
    11. Dixit, Aasheesh & Kumar, Patanjal & Jakhar, Suresh Kumar, 2022. "Effectiveness of carbon tax and congestion cost in improving the airline industry greening level and welfare: A case of two competing airlines," Journal of Air Transport Management, Elsevier, vol. 100(C).
    12. Czerny, Achim I. & Zhang, Anming, 2014. "Airport congestion pricing when airlines price discriminate," Transportation Research Part B: Methodological, Elsevier, vol. 65(C), pages 77-89.
    13. Ugirumurera, Juliette & Severino, Joseph & Ficenec, Karen & Ge, Yanbo & Wang, Qichao & Williams, Lindy & Chae, Junghoon & Lunacek, Monte & Phillips, Caleb, 2021. "A modeling framework for designing and evaluating curbside traffic management policies at Dallas-Fort Worth International Airport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 153(C), pages 130-150.

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    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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