Airport Capacity Allocation with Network Airlines

This study provides a theoretical framework to investigate the efficiency of different airport capacity allocation schemes under congestion externalities and imperfect competition. Its innovation is to consider an asymmetric market structure featuring a single dominant network carrier at its hub airport that endogenously differentiates its flights based on passenger benefits from network density. Based on a partial equilibrium analysis of the generic model, the investigation qualitatively evaluates the ambiguities on allocation efficiency, which arise with capacity allocation in a market that faces multiple distortions. In addition, a quantitative simulation comprehensively illustrates the market structures of the model, as well as selected outcomes concerning the allocation instruments. At the end, a brief summary helps to quickly access the main lessons of the extensive investigation; moreover, the conclusions are extended into implications for practice, which may be interesting for regulators, policymakers, and airline managers likewise. The author obtained a PhD in Management at the University of St. Gallen in 2016, and a MA in Economics at the University of Zurich in 2005. This book constitutes a revised version of the original PhD thesis; as an excerpt, the generic model and the theoretical results were awarded the annual Prize in European Aviation Economics and Management at the European Aviation Conference 2016 by the German Aviation Research Society (GARS).