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International Hub and Non-Hub Airports Pricing

Authors: Ming Hsin Lin;

International Hub and Non-Hub Airports Pricing

Abstract

This study investigates congestion pricing of an international congested hub links foreign non-hub airports. The hub serves its home country’s dominant hub carrier and foreign airlines. Under symmetric non-hub airports and duopoly airline competition, we find the following: (i) To maximize its home country’s welfare, the int’l hub levies: a per-flight charge that includes “quarter” of congestion delay cost; a positive per-transfer passenger charge; a positive (a negative, resp.) per-departing passenger charge when the percentage of foreign passengers is large (small, resp.). (ii) To maximize a foreign country’s welfare, its non-hub airport levies: a per-flight charge that also include “quarter” of congestion delay cost even the non-hub itself suffer no congestion; an uniform per-departing charge on nonstop and one-stop passengers which can only correct the two markets inefficiencies in a weighted average level. (iii) The sum of the locally optimal per-flight charges, each maximizes the home country’ and foreign country’s welfare, respectively and non-cooperatively, is the same as the globally optimal per-flight charges under coordination. (iv) a non-hub’s discriminatory charges on nonstop and one-stop departing passengers can not only improve the non-hub country’s welfare but also maximize global welfare.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
1
Average
Average
Average
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