End Uncertainty Over Ownership of Airport Slots says new IEA paper
Prof. Philip Booth FIA and Dr. Deborah Cooper FIA
Andrew Crockett - Financial Stability and International Financial Regulation / Sir John Cass Business School Financial Regulation Lecture
Embargoed for 28 March 2003
Authors Keith Boyfield, David Starkie, Tom Bass and Barry Humphreys in A Market in Airport Slots recognise that there are practical and political obstacles to meaningful reform. However, they argue that reform is essential. The current system impedes new entry into the air transport market, it prevents take-off and landing slots being used by airlines that value them most and it leads to greater congestion at Heathrow and Gatwick airports. As a minimum, the political authorities (both the UK government and the EU) need to determine who are the legitimate owners of take-off and landing slots. Is it the government, the airports or the airlines? Then a mechanism needs to be developed for the trading off slots – something which only happens covertly at the moment because it is not technically permitted. Only within such a framework can the practical issues be addressed.
The EU is continuing to delay reform of its regulations in this area, but the need to reform is urgent. Passenger numbers at Gatwick have increased from 19 million to 31 million in 10 years. Heathrow airport is operating 20% above capacity. There is pressure to expand both airports or build a further London airport. A rational system of pricing and trading of take off and landing rights is needed first.
Read the full paper here.