Research Themes

Theme 4: Infrastructure

In 2000 and 2001, many of the industry leaders that we interviewed described airport and air traffic control system capacity as possibly the most important long-term constraint on the growth of the air transportation system. Although air traffic congestion was reduced after 9/11, it is essential to remember that prospects for a sizable future increase of capacity at major airports are not good. With the return of air traffic to pre-9/11 levels and beyond, long flight delays, cancellations and near-gridlock conditions have become endemic phenomena once again. In addition, the availability of capacity and the efficiency and cost of airport operations play a critical role in shaping the strategies of individual airlines. The following summarizes some of our accomplishments in this area and plans for future work.

Airport Demand Management: Our work on airport demand management has generated widespread interest in the aviation and academic communities over the past three years. The Ph.D. thesis of Terence Fan (completed September 2003) has advanced greatly the state of knowledge in this area and has produced practical results valuable to aviation decision-makers: a thorough survey and critical assessment of demand management practices worldwide; a detailed analysis of the impacts of demand management actions taken by the Port Authority of New York and New Jersey and the FAA in their efforts to reduce congestion at LaGuardia Airport in 2000 and 2001; and a description of a set of "hybrid policies" that combine administrative measures with a set of economic incentives, which can be applied at airports in the United States. We continue to pursue this topic with a focus on the many and complex implementation issues associated with airport demand management, such as the computation of appropriate congestion fees, exemptions for certain flights serving public policy goals, and potential rebates to airlines as economic incentives for the efficient use of airport slots.

Impact of Flight Delays on Passengers and Perceived Level of Service: The Ph.D. thesis of Stephane Bratu (2003) examines the relationship between flight delays as reported by the airlines and the impact of these delays as perceived by airline passengers. The thesis breaks new ground by showing that the flight delay statistics published by the US Department of Transportation and the FAA may seriously underestimate the true impacts on passenger level of service. For example, passenger delays increase disproportionately as aircraft load factors increase, due to the decreased ability of passengers to re-book missed connections. And, compared to hubs with large “banks” (or waves) of flights, hubs with smoother, i.e., less peaked, schedules can result in shorter actual connection times, particularly when flight delays are relatively long. This work provides a means for understanding the impacts on passengers of alternative airline scheduling practices at their major hubs.

Privatization and Economic Regulation of Airports: Privatization is a trend that has swept airports outside the United States during the past 10 years. By the end of 2001, 178 airports had been privatized all over the world. In his Master’s thesis (2002) Rafael Enriquez performed the most extensive survey to date of the many forms of privatization that have emerged. One of the main findings is that there are inherent conflicts and disadvantages to some of these schemes, especially some types of public-private partnerships, that have already led to serious difficulties. Another finding is that privatization is contributing to an increasingly tense relationship between airports and airlines, with the latter complaining about alleged monopolistic pricing practices by the former. This has led to a concurrent international trend, the emergence of increasingly sophisticated economic regulation of airport charges by governments. As a result, we may be entering a period of conflict between economically hard-pressed airlines and relatively prosperous airport operators.

US Airport Economics: In his Master’s thesis (2002) Victor Rivas performed a study of operating and capital revenues and expenditures at the 31 busiest airports in the United States. These airports handled 74% of all US passenger enplanements in 2000. The analysis provides a wealth of observations on aggregate trends, as well as detailed case studies of three diverse airports (Boston, Dallas/Fort Worth, and Baltimore/Washington). Trends demonstrate clearly the growing importance to airports of non-aeronautical revenues (from concessions, car parking, automobile rentals, etc.) and of passenger facility charges, which are supplanting federal grants in supporting airport capital programs. US airports also rely increasingly on “outsourcing” for the provision of a wide range of facilities and services.

Links to the various themes: