Effects of the use-it-or-lose-it rule on airline strategy and climate
Transportation Research Part D: Transport and Environment
; 115, 2023.
Article
in English
| Scopus | ID: covidwho-2242295
ABSTRACT
Grandfather rights require airlines to operate at least 80 % of their slots, if they are to keep them in the next scheduling period. To prevent losing slots, the airlines may operate slot-rescue flights, an airline strategy called slot hoarding. We model strategies of a monopolistic airline which chooses between long-haul and short-haul flights at a slot-coordinated airport. In cases of a binding use-it-or-lose-it rule, we observe a bias in the airline route network in favor of slot-rescue flights on short-haul distances. Slot-rescue flights reduce airline profits, but raise consumer surplus and airport profits. The overall effect of slot-rescue flights on welfare, however, remains ambiguous. Recently, slot hoarding and its climate impact have received considerable attention during the COVID-19 pandemic. We show that the environmental effects of slot-rescue flights are asymmetric. The climate damage of slot hoarding in the EU is reduced by the EU ETS, whereas CORSIA is rather ineffective. © 2022 Elsevier Ltd
Full text:
Available
Collection:
Databases of international organizations
Database:
Scopus
Type of study:
Experimental Studies
Language:
English
Journal:
Transportation Research Part D: Transport and Environment
Year:
2023
Document Type:
Article
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