[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v94y2016icp495-513.html
   My bibliography  Save this article

Airport demand management: The operations research and economics perspectives and potential synergies

Author

Listed:
  • Gillen, David
  • Jacquillat, Alexandre
  • Odoni, Amedeo R.
Abstract
Airport demand management aims to mitigate air traffic congestion by limiting the imbalances between demand and capacity at busy airports through administrative measures (e.g., slot controls) or economic incentives (e.g., congestion pricing, slot auctions). This paper provides an integrated synthesis of the contributions of the fields of operations research/management science (OR/MS) and economics on the subject matter. From an operating standpoint, assessing the benefits of demand management requires estimates of airport capacity and models of airport on-time performance. From a managerial standpoint, the design of demand management mechanisms can be supported by decision-making models of flight scheduling. From an economic standpoint, the welfare impact of congestion pricing, slot controls and slot auctions depends on the market structure at the airport. This paper proposes an integrated framework that underscores the interdependencies between these operating, managerial and economic aspects to foster cross-disciplinary approaches toward more effective demand management policies at busy airports worldwide.

Suggested Citation

  • Gillen, David & Jacquillat, Alexandre & Odoni, Amedeo R., 2016. "Airport demand management: The operations research and economics perspectives and potential synergies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 495-513.
    • Handle: RePEc:eee:transa:v:94:y:2016:i:c:p:495-513
    DOI: 10.1016/j.tra.2016.10.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856415302640
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2016.10.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Brueckner, Jan K., 2005. "Internalization of airport congestion: A network analysis," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 599-614, September.
    2. Brueckner, Jan K. & Van Dender, Kurt, 2008. "Atomistic congestion tolls at concentrated airports? Seeking a unified view in the internalization debate," Journal of Urban Economics, Elsevier, vol. 64(2), pages 288-295, September.
    3. Zhang, Anming & Czerny, Achim I., 2012. "Airports and airlines economics and policy: An interpretive review of recent research," Economics of Transportation, Elsevier, vol. 1(1), pages 15-34.
    4. Verhoef, Erik T., 2010. "Congestion pricing, slot sales and slot trading in aviation," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 320-329, March.
    5. Czerny, Achim I., 2010. "Airport congestion management under uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 371-380, March.
    6. Rupp, Nicholas G., 2009. "Do carriers internalize congestion costs? Empirical evidence on the internalization question," Journal of Urban Economics, Elsevier, vol. 65(1), pages 24-37, January.
    7. Vikrant Vaze & Cynthia Barnhart, 2012. "Modeling Airline Frequency Competition for Airport Congestion Mitigation," Transportation Science, INFORMS, vol. 46(4), pages 512-535, November.
    8. Adler, Nicole, 2001. "Competition in a deregulated air transportation market," European Journal of Operational Research, Elsevier, vol. 129(2), pages 337-345, March.
    9. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
    10. Swaroop, Prem & Zou, Bo & Ball, Michael O. & Hansen, Mark, 2012. "Do more US airports need slot controls? A welfare based approach to determine slot levels," Transportation Research Part B: Methodological, Elsevier, vol. 46(9), pages 1239-1259.
    11. Daniel, Joseph I. & Harback, Katherine Thomas, 2008. "(When) Do hub airlines internalize their self-imposed congestion delays?," Journal of Urban Economics, Elsevier, vol. 63(2), pages 583-612, March.
    12. Basso, Leonardo J. & Zhang, Anming, 2010. "Pricing vs. slot policies when airport profits matter," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 381-391, March.
    13. Hamsa Balakrishnan & Bala G. Chandran, 2010. "Algorithms for Scheduling Runway Operations Under Constrained Position Shifting," Operations Research, INFORMS, vol. 58(6), pages 1650-1665, December.
    14. Pels, Eric & Verhoef, Erik T., 2004. "The economics of airport congestion pricing," Journal of Urban Economics, Elsevier, vol. 55(2), pages 257-277, March.
    15. 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.
    16. Madas, Michael A. & Zografos, Konstantinos G., 2008. "Airport capacity vs. demand: Mismatch or mismanagement?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(1), pages 203-226, January.
    17. Cynthia Barnhart & Douglas Fearing & Vikrant Vaze, 2014. "Modeling Passenger Travel and Delays in the National Air Transportation System," Operations Research, INFORMS, vol. 62(3), pages 580-601, June.
    18. Dimitris Bertsimas & Sarah Stock Patterson, 1998. "The Air Traffic Flow Management Problem with Enroute Capacities," Operations Research, INFORMS, vol. 46(3), pages 406-422, June.
    19. Christopher Mayer & Todd Sinai, 2003. "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil," American Economic Review, American Economic Association, vol. 93(4), pages 1194-1215, September.
    20. Hansen, Mark, 2002. "Micro-level analysis of airport delay externalities using deterministic queuing models: a case study," Journal of Air Transport Management, Elsevier, vol. 8(2), pages 73-87.
    21. Peter B. Vranas & Dimitris J. Bertsimas & Amedeo R. Odoni, 1994. "The Multi-Airport Ground-Holding Problem in Air Traffic Control," Operations Research, INFORMS, vol. 42(2), pages 249-261, April.
    22. S.J. Rassenti & V.L. Smith & R.L. Bulfin, 1982. "A Combinatorial Auction Mechanism for Airport Time Slot Allocation," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 402-417, Autumn.
    23. Brueckner, Jan K. & Lin, Ming Hsin, 2016. "Convenient flight connections vs. airport congestion: Modeling the ‘rolling hub’," International Journal of Industrial Organization, Elsevier, vol. 48(C), pages 118-142.
    24. Hugo E. Silva & Erik T. Verhoef, 2011. "Optimal Pricing of Flights and Passengers at Congested Airports: The Efficiency of Atomistic Charges," Tinbergen Institute Discussion Papers 11-179/3, Tinbergen Institute, revised 28 Mar 2013.
    25. Ater, Itai, 2012. "Internalization of congestion at US hub airports," Journal of Urban Economics, Elsevier, vol. 72(2), pages 196-209.
    26. Cynthia Barnhart & Amr Farahat & Manoj Lohatepanont, 2009. "Airline Fleet Assignment with Enhanced Revenue Modeling," Operations Research, INFORMS, vol. 57(1), pages 231-244, February.
    27. Martin L. Weitzman, 1974. "Prices vs. Quantities," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(4), pages 477-491.
    28. Dimitris Bertsimas & Michael Frankovich & Amedeo Odoni, 2011. "Optimal Selection of Airport Runway Configurations," Operations Research, INFORMS, vol. 59(6), pages 1407-1419, December.
    29. Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, vol. 63(2), pages 327-370, March.
    30. Dimitris Bertsimas & Guglielmo Lulli & Amedeo Odoni, 2011. "An Integer Optimization Approach to Large-Scale Air Traffic Flow Management," Operations Research, INFORMS, vol. 59(1), pages 211-227, February.
    31. Cynthia Barnhart & Dimitris Bertsimas & Constantine Caramanis & Douglas Fearing, 2012. "Equitable and Efficient Coordination in Traffic Flow Management," Transportation Science, INFORMS, vol. 46(2), pages 262-280, May.
    32. Morrison, Steven A. & Winston, Clifford, 2008. "The effect of FAA expenditures on air travel delays," Journal of Urban Economics, Elsevier, vol. 63(2), pages 669-678, March.
    33. Zhang, Anming & Zhang, Yimin, 2006. "Airport capacity and congestion when carriers have market power," Journal of Urban Economics, Elsevier, vol. 60(2), pages 229-247, September.
    34. Hansen, Mark, 1990. "Airline competition in a hub-dominated environment: An application of noncooperative game theory," Transportation Research Part B: Methodological, Elsevier, vol. 24(1), pages 27-43, February.
    35. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-271, May.
    36. W. Tom Whalen & Dennis W. Carlton & Ken Heyer & Oliver Richard, 2007. "Proposal For A Market-Based Solution to Airport Delays," EAG Competition Advocacy Papers 200714, Department of Justice, Antitrust Division.
    37. Tasos Nikoleris & Mark Hansen, 2012. "Queueing Models for Trajectory-Based Aircraft Operations," Transportation Science, INFORMS, vol. 46(4), pages 501-511, November.
    38. Czerny, Achim I. & Zhang, Anming, 2011. "Airport congestion pricing and passenger types," Transportation Research Part B: Methodological, Elsevier, vol. 45(3), pages 595-604, March.
    39. Silva, Hugo E. & Verhoef, Erik T., 2013. "Optimal pricing of flights and passengers at congested airports and the efficiency of atomistic charges," Journal of Public Economics, Elsevier, vol. 106(C), pages 1-13.
    40. Gregory Dobson & Phillip J. Lederer, 1993. "Airline Scheduling and Routing in a Hub-and-Spoke System," Transportation Science, INFORMS, vol. 27(3), pages 281-297, August.
    41. Vikrant Vaze & Cynthia Barnhart, 2012. "An assessment of the impact of demand management strategies for efficient allocation of airport capacity," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 6(1/2), pages 5-27.
    42. Brueckner, Jan K., 2009. "Price vs. quantity-based approaches to airport congestion management," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 681-690, June.
    43. Alexandre Jacquillat & Amedeo R. Odoni, 2015. "An Integrated Scheduling and Operations Approach to Airport Congestion Mitigation," Operations Research, INFORMS, vol. 63(6), pages 1390-1410, December.
    44. Nikolas Pyrgiotis & Amedeo Odoni, 2016. "On the Impact of Scheduling Limits: A Case Study at Newark Liberty International Airport," Transportation Science, INFORMS, vol. 50(1), pages 150-165, February.
    45. Manoj Lohatepanont & Cynthia Barnhart, 2004. "Airline Schedule Planning: Integrated Models and Algorithms for Schedule Design and Fleet Assignment," Transportation Science, INFORMS, vol. 38(1), pages 19-32, February.
    46. Carlin, Alan & Park, Rolla Edward, 1970. "Marginal Cost Pricing of Airport Runway Capacity," American Economic Review, American Economic Association, vol. 60(3), pages 310-319, June.
    47. Steven A. Morrison & Clifford Winston, 2007. "Another Look at Airport Congestion Pricing," American Economic Review, American Economic Association, vol. 97(5), pages 1970-1977, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dixit, Aasheesh & Jakhar, Suresh Kumar, 2021. "Airport capacity management: A review and bibliometric analysis," Journal of Air Transport Management, Elsevier, vol. 91(C).
    2. Cavusoglu, Sabriye Sera & Macário, Rosário, 2021. "Minimum delay or maximum efficiency? Rising productivity of available capacity at airports: Review of current practice and future needs," Journal of Air Transport Management, Elsevier, vol. 90(C).
    3. Jacquillat, Alexandre & Odoni, Amedeo R., 2018. "A roadmap toward airport demand and capacity management," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 168-185.
    4. Silva, Hugo E. & Verhoef, Erik T. & van den Berg, Vincent A.C., 2014. "Airlines’ strategic interactions and airport pricing in a dynamic bottleneck model of congestion," Journal of Urban Economics, Elsevier, vol. 80(C), pages 13-27.
    5. Silva, Hugo E. & Verhoef, Erik T., 2013. "Optimal pricing of flights and passengers at congested airports and the efficiency of atomistic charges," Journal of Public Economics, Elsevier, vol. 106(C), pages 1-13.
    6. Guo, Huanxiu & Jiang, Changmin & Wan, Yulai, 2018. "Can airfares tell? An alternative empirical strategy for airport congestion internalization," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 648-661.
    7. Zhang, Anming & Czerny, Achim I., 2012. "Airports and airlines economics and policy: An interpretive review of recent research," Economics of Transportation, Elsevier, vol. 1(1), pages 15-34.
    8. Ribeiro, Nuno Antunes & Jacquillat, Alexandre & Antunes, António Pais & Odoni, Amedeo R. & Pita, João P., 2018. "An optimization approach for airport slot allocation under IATA guidelines," Transportation Research Part B: Methodological, Elsevier, vol. 112(C), pages 132-156.
    9. Noto, Claudio, 2020. "Airport slots, secondary trading, and congestion pricing at an airport with a dominant network airline," Research in Transportation Economics, Elsevier, vol. 79(C).
    10. Sunhyung Lee & Zexuan Liu & Haojun Yu, 2021. "Heterogeneous price effects and increased price dispersion from quantity‐based congestion management," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1378-1402, July.
    11. 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.
    12. Alexandre Jacquillat & Amedeo R. Odoni, 2015. "An Integrated Scheduling and Operations Approach to Airport Congestion Mitigation," Operations Research, INFORMS, vol. 63(6), pages 1390-1410, December.
    13. Brueckner, Jan K., 2009. "Price vs. quantity-based approaches to airport congestion management," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 681-690, June.
    14. Lin, Ming Hsin & Zhang, Anming, 2016. "Hub congestion pricing: Discriminatory passenger charges," Economics of Transportation, Elsevier, vol. 5(C), pages 37-48.
    15. Jiang, Changmin & Zhang, Anming, 2015. "Airport congestion pricing and terminal investment: Effects of terminal congestion, passenger types, and concessionsAuthor-Name: Wan, Yulai," Transportation Research Part B: Methodological, Elsevier, vol. 82(C), pages 91-113.
    16. Czerny, Achim I., 2010. "Airport congestion management under uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 371-380, March.
    17. 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.
    18. Miranda, Victor A.P. & Oliveira, Alessandro V.M., 2018. "Airport slots and the internalization of congestion by airlines: An empirical model of integrated flight disruption management in Brazil," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 201-219.
    19. Czerny, Achim I. & Lang, Hao, 2019. "A pricing versus slots game in airport networks," Transportation Research Part B: Methodological, Elsevier, vol. 125(C), pages 151-174.
    20. Lang, Hao & Czerny, Achim I., 2022. "Airport pricing versus (grandfathered) slots: A generalization," Economics of Transportation, Elsevier, vol. 29(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:94:y:2016:i:c:p:495-513. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.