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Empirical assessment of competitive impacts of regulatory rules of airport slots redistribution

Abstract

One of the factors that generate the greatest losses of economic welfare in modern air transport is the lack of airport infrastructure. In a situation of shortage, congested airports are typically administered under a regime of allocation of "slots" - takeoff and landing schedules rigidly predetermined and distributed - which potentially creates barriers to entry of new airlines and has inductive effect of power market incumbents. There are rare possibilities for reallocation of airport slots endowed with attractive attributes for new rivals capable of actually enhancing the contestability of markets dominated by incumbents. Additionally, there is intense lobbying movements aiming at promoting regulatory capture of authorities. This paper aims to carry out an empirical study of the effects of airport congestion on the market power of firms, with special emphasis on the dominance of slots. By performing parameter estimation of a demand system based on discrete choice models of nested logit type and variants, we then develop simulations of the impact of regulatory reform on the allocation of airport infrastructure. In the simulations, we assume the hypotheses of the Bertrand-Nash type competitive equilibrium models. We then evaluate the effects and possibilities of a redistribution of slots in favor of airlines with smaller market share, focusing on metrics of relative market power. Some policy recommendations for the Brazilian air transportation will also be designed. (AU)

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Scientific publications (13)
(References retrieved automatically from Web of Science and SciELO through information on FAPESP grants and their corresponding numbers as mentioned in the publications by the authors)
SANTOS, LUCA J.; OLIVEIRA, ALESSANDRO V. M.; ALDRIGHI, DANTE MENDES. Testing the differentiated impact of the COVID-19 pandemic on air travel demand considering social inclusion. JOURNAL OF AIR TRANSPORT MANAGEMENT, v. 94, JUL 2021. Web of Science Citations: 0.
OLIVEIRA, ALESSANDRO V. M.; NARCIZO, RODOLFO R.; CALIARI, THIAGO; MORALES, MAURICIO A. V.; PRADO, RAFAEL. Estimating fuel-efficiency while accounting for dynamic fleet management: Testing the effects of fuel price signals and fleet rollover. TRANSPORTATION RESEARCH PART D-TRANSPORT AND ENVIRONMENT, v. 95, JUN 2021. Web of Science Citations: 0.
DE OLIVEIRA, RENAN P.; OLIVEIRA, ALESSANDRO V. M. Financial distress, survival network design strategies, and airline pricing: An event study of a merger between a bankrupt FSC and an LCC in Brazil. JOURNAL OF AIR TRANSPORT MANAGEMENT, v. 92, MAY 2021. Web of Science Citations: 0.
DE OLIVEIRA, RENAN P.; OLIVEIRA, ALESSANDRO V. M.; LOHMANN, GUI. A Network-Design Analysis of Airline Business Model Adaptation in the Face of Competition and Consolidation. TRANSPORTATION SCIENCE, v. 55, n. 2, p. 532-548, MAR-APR 2021. Web of Science Citations: 0.
EUFRASIO, ANA BEATRIZ R.; ELLER, ROGERIA A. G.; OLIVEIRA, ALESSANDRO V. M. Are on -time performance statistics worthless? An empirical study of the flight scheduling strategies of Brazilian airlines. TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW, v. 145, JAN 2021. Web of Science Citations: 2.
OLIVEIRA, RENAN P.; OLIVEIRA, ALESSANDRO V. M.; LOHMANN, GUI; BETTINI, HUMBERTO F. A. J. The geographic concentrations of air traffic and economic development: A spatiotemporal analysis of their association and decoupling in Brazil. JOURNAL OF TRANSPORT GEOGRAPHY, v. 87, JUL 2020. Web of Science Citations: 0.
MARQUES JUNIOR, CARLOS HIGINO; GOMES ELLER, ROGERIA DE ARANTES; OLIVEIRA, ALESSANDRO V. M. Are passengers less willing to pay for flying turboprops? An empirical test of the ``turbo aversion hypothesis{''}. JOURNAL OF AIR TRANSPORT MANAGEMENT, v. 73, p. 58-66, OCT 2018. Web of Science Citations: 0.
MIRANDA, VICTOR A. P.; OLIVEIRA, ALESSANDRO V. M. Airport slots and the internalization of congestion by airlines: An empirical model of integrated flight disruption management in Brazil. TRANSPORTATION RESEARCH PART A-POLICY AND PRACTICE, v. 116, p. 201-219, OCT 2018. Web of Science Citations: 3.
OLIVEIRA, MARCUS V. R.; OLIVEIRA, ALESSANDRO V. M. What drives effective competition in the airline industry? An empirical model of city-pair market concentration. TRANSPORT POLICY, v. 63, p. 165-175, APR 2018. Web of Science Citations: 2.
BETTINI, HUMBERTO F. A. J.; SILVEIRA, JOSE MARIA F. J.; OLIVEIRA, ALESSANDRO V. M. Estimating strategic responses to the march of a low cost carrier to primary airports. TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW, v. 109, p. 190-204, JAN 2018. Web of Science Citations: 1.
VARELLA, RAFAEL R.; FRAZAO, JESSICA; OLIVEIRA, ALESSANDRO V. M. Dynamic pricing and market segmentation responses to low-cost carrier entry. TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW, v. 98, p. 151-170, FEB 2017. Web of Science Citations: 6.
BETTINI, HUMBERTO F. A. J.; OLIVEIRA, ALESSANDRO V. M. Two-sided platforms in airport privatization. TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW, v. 93, p. 262-278, SEP 2016. Web of Science Citations: 3.
ROLIM, PAULA S. W.; BETTINI, HUMBERTO F. A. J.; OLIVEIRA, ALESSANDRO V. M. Estimating the impact of airport privatization on airline demand: A regression-based event study. JOURNAL OF AIR TRANSPORT MANAGEMENT, v. 54, p. 31-41, JUL 2016. Web of Science Citations: 3.

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