Air transport liberalization and airport slot allocation: The case of the Northeast Asian transport market

Nicole Adler, Xiaowen Fu, Tae H. Oum, Chunyan Yu

Research output: Journal article publicationJournal articleAcademic researchpeer-review

47 Citations (Scopus)

Abstract

We develop a differentiated Bertrand high speed rail and airline network game which analyzes the effects of international air transport liberalization, regional open skies policies, domestic inter-modal competition and airport slot allocation. The model is applied to the transport market in Northeast Asia using a counter-factual approach, demonstrating the model's capability of evaluating practical policies utilizing market data observed on the routes under investigation. Our modeling results suggest that air transport liberalization will benefit both consumers and the aviation industry in the region albeit not necessarily on an equal basis across or within groups. Much of the welfare gains are derived from higher frequency after liberalization, which increases service quality, hence consumer utility. Open skies policies that include pure cabotage which permit carriers to compete in the domestic markets of a foreign country, will increase competition, frequency and reduce fares below current levels. Airport slot allocation policies play an important role in the realization and distribution of potential welfare gains related to liberalization. Therefore, government agencies should implement liberalization and airport slot allocation policies jointly.

Original languageEnglish
Pages (from-to)3-19
Number of pages17
JournalTransportation Research Part A: Policy and Practice
Volume62
DOIs
Publication statusPublished - 1 Jan 2014
Externally publishedYes

Keywords

  • Airlines
  • Competition
  • High-speed rail
  • Network game
  • North East Asia
  • Slot allocation

ASJC Scopus subject areas

  • Civil and Structural Engineering
  • Transportation
  • Management Science and Operations Research

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