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Public Interest Comment on Proposed Amendment to the Policy Regarding the Establishment of Airport Rates and Charges

Jerry Ellig, Mark Adams

April 2, 2008

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Highlights

The Regulation

The U.S. Department of Transportation has proposed a new rule that would change the way most airports charge for runway use in three ways:

• Airports would be permitted to combine existing weight-based fees with a fee for the congestion each airline imposes on other users.
• Operators with multiple airports could shift fees onto flights at the most congested airports.
• Operators of congested airports could include the costs of airfield projects under construction in their fees.

Our Findings

• Delays caused by congestion impose substantial costs on airlines and passengers alike.
• A significant proportion of this cost could be avoided if airports were allowed to charge carriers for the congestion they impose on other runway users.
• When congestion pricing is combined with increased investment, passengers and carriers are the main beneficiaries.
• By creating incentives for airlines to use existing capacity more efficiently, congestion pricing will not lead to a major reduction in available seating.

Recommendations

• The DOT should proceed with the proposed rule changes.
• The Department should require airports to compare the new fees with the social costs of congestion at that airport, and adjust their pricing accordingly.