TY - JOUR
T1 - Introducing competition through auctions in the air traffic control market
AU - Adler, Nicole
AU - Hanany, Eran
AU - Proost, Stef
N1 - Publisher Copyright:
© 2018, SESAR Joint Undertaking. All rights reserved.
PY - 2018
Y1 - 2018
N2 - We focus on the potential outcomes of introducing competition for the market in air traffic control in Europe. We develop a two-stage, network congestion auction game in which multiple air navigation service providers bid to serve Member State airspaces. Airlines subsequently choose their optimal flight paths such that they minimize their operating costs. The individual Member States set up simultaneous auctions in which they specify minimum service levels and the rules of the auction, such as the right to increase charges as a function of service levels. The winners of the auctions are the service providers that bid and commit to the lowest per km charge. The results suggest that introducing competition for the market via outsourcing service provision may reduce charges by up to half the current levels provided there are sufficient bidders. It would also appear that auctioning the service may lead to defragmentation of the European system as companies win multiple auctions.
AB - We focus on the potential outcomes of introducing competition for the market in air traffic control in Europe. We develop a two-stage, network congestion auction game in which multiple air navigation service providers bid to serve Member State airspaces. Airlines subsequently choose their optimal flight paths such that they minimize their operating costs. The individual Member States set up simultaneous auctions in which they specify minimum service levels and the rules of the auction, such as the right to increase charges as a function of service levels. The winners of the auctions are the service providers that bid and commit to the lowest per km charge. The results suggest that introducing competition for the market via outsourcing service provision may reduce charges by up to half the current levels provided there are sufficient bidders. It would also appear that auctioning the service may lead to defragmentation of the European system as companies win multiple auctions.
KW - Auctions
KW - Competition for the market
KW - Ownership form
UR - http://www.scopus.com/inward/record.url?scp=85079027101&partnerID=8YFLogxK
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AN - SCOPUS:85079027101
SN - 0770-1268
JO - SESAR Innovation Days
JF - SESAR Innovation Days
T2 - 8th SESAR Innovation Days, SIDs 2018
Y2 - 3 December 2018 through 7 December 2018
ER -