Subject category:
Ethics and Social Responsibility
Published by:
Harvard Kennedy School
Length: 20 pages
Share a link:
https://casecent.re/p/6892
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Abstract
The ability of commercial airlines to fly their planes means little without a space in which to land them. In some congested US airports, the times and spots for landing are known as 'landing slots' and have been assigned to airlines at the nation's four busiest airports since 1969. For the first decade of this slot system, assignments were made with little controversy by the airline industry committee. Airline deregulation, however, increased demand for slots in the 1980s and vastly increased pressure on the committees apportioning the slots. An idea emerged to resolve competing demands: the FAA could create a market for landing slots and allow demand to set the price and ration the resource. This case tells the story of Secretary of Transportation Elizabeth Dole's deliberations over whether to create a landing slot market. It describes options ranging from auction to 'grandfathering', allowing airlines that had based investment decisions on a stockpile of slots to avoid corporate disruption.
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Abstract
The ability of commercial airlines to fly their planes means little without a space in which to land them. In some congested US airports, the times and spots for landing are known as 'landing slots' and have been assigned to airlines at the nation's four busiest airports since 1969. For the first decade of this slot system, assignments were made with little controversy by the airline industry committee. Airline deregulation, however, increased demand for slots in the 1980s and vastly increased pressure on the committees apportioning the slots. An idea emerged to resolve competing demands: the FAA could create a market for landing slots and allow demand to set the price and ration the resource. This case tells the story of Secretary of Transportation Elizabeth Dole's deliberations over whether to create a landing slot market. It describes options ranging from auction to 'grandfathering', allowing airlines that had based investment decisions on a stockpile of slots to avoid corporate disruption.