Hub airport slot Re-allocation and subsidy policy to speed up air traffic recovery amid COVID-19 pandemic — case on the Chinese airline market

Meng Hou, Kun Wang, Hangjun Yang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

27 Citations (Scopus)

Abstract

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.

Original languageEnglish
Article number102047
Number of pages13
JournalJournal of Air Transport Management
Volume93
DOIs
Publication statusPublished - Jun 2021
Externally publishedYes

Keywords

  • Airport traffic recovery
  • COVID-19 pandemic
  • Hub and small airports
  • Slot liberalization
  • Subsidy

ASJC Scopus subject areas

  • Transportation
  • Strategy and Management
  • Management, Monitoring, Policy and Law
  • Law

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