TY - JOUR
T1 - Hub airport slot Re-allocation and subsidy policy to speed up air traffic recovery amid COVID-19 pandemic — case on the Chinese airline market
AU - Hou, Meng
AU - Wang, Kun
AU - Yang, Hangjun
N1 - Funding Information:
All the co-authors declare that we do not have any copyright issue with this paper. The paper has not been submitted or published in other journals. We also do not see any conflict of interest involved in this submission. All the related financial support from related research funds have been appropriate acknowledged.
Funding Information:
We are very grateful to two anonymous referees whose comments have led to a significant improvement of the paper. Financial supports from National Natural Science Foundation of China research fund ( 71901065 ) and the Program for Young Excellent Talents (19YQ01) of University of International Business and Economics are highly appreciated.
Publisher Copyright:
© 2021 Elsevier Ltd
PY - 2021/6
Y1 - 2021/6
N2 - With international air travels largely banned around the world amid the global COVID-19 pandemic, many gateway and hub airports have more ideal slots available for reallocation. Airport traffic recovery replaces airport congestion to become the primary challenge of major airports around the world. With the pandemic well controlled domestically in China, the government liberalizes the hub airport slots for those previously forbidden services to the small/regional airports. This paper thus analytically examines the effect of this slot liberalization. The government subsidy to the small airports has also been considered. It is found that the slot liberalization can speed up airport traffic recovery for both hub and small airports. The hub airport slot liberalization leads to a lower level of minimum subsidy to sustain the survival of the small airports. Given any fixed level of subsidy to the small airport, both the total airport traffic and social welfare would improve with the slot liberalization at the hub airport. When the government can adjust the level of subsidy after liberalizing the hub airport slots, the subsidy could be excessive, if the government emphasizes too much on airport traffic recovery. This would, however, harm the overall social welfare.
AB - With international air travels largely banned around the world amid the global COVID-19 pandemic, many gateway and hub airports have more ideal slots available for reallocation. Airport traffic recovery replaces airport congestion to become the primary challenge of major airports around the world. With the pandemic well controlled domestically in China, the government liberalizes the hub airport slots for those previously forbidden services to the small/regional airports. This paper thus analytically examines the effect of this slot liberalization. The government subsidy to the small airports has also been considered. It is found that the slot liberalization can speed up airport traffic recovery for both hub and small airports. The hub airport slot liberalization leads to a lower level of minimum subsidy to sustain the survival of the small airports. Given any fixed level of subsidy to the small airport, both the total airport traffic and social welfare would improve with the slot liberalization at the hub airport. When the government can adjust the level of subsidy after liberalizing the hub airport slots, the subsidy could be excessive, if the government emphasizes too much on airport traffic recovery. This would, however, harm the overall social welfare.
KW - Airport traffic recovery
KW - COVID-19 pandemic
KW - Hub and small airports
KW - Slot liberalization
KW - Subsidy
UR - http://www.scopus.com/inward/record.url?scp=85102571857&partnerID=8YFLogxK
U2 - 10.1016/j.jairtraman.2021.102047
DO - 10.1016/j.jairtraman.2021.102047
M3 - Journal article
AN - SCOPUS:85102571857
SN - 0969-6997
VL - 93
JO - Journal of Air Transport Management
JF - Journal of Air Transport Management
M1 - 102047
ER -