This paper considers airport congestion management policies in the presence of business and leisure passengers. The study captures that the internalization of airport congestion costs depends on the average time valuation of incremental passengers, which is lower than the average time valuation of all passengers under realistic assumptions about demand elasticities and time valuations. The main contribution is to show that uncertain leisure-passenger demand favors the use of pricing policies while uncertain business-passenger demand favors the use of permit policies, for example, in the form of airport slots. The result is based on the use of linear functional forms and additive demand shocks.
Dr. Achim I. Czerny is Associate Professor at the Department of Logistics and Maritime Studies (LMS), Hong Kong Polytechnic University, and Director of a new academic program in Aviation Management and Logistics. Previously he was employed as a researcher at the VU University of Amsterdam, Department of Spatial Economics, and an Assistant Professor of Regulatory Economics at the WHU – Otto Beisheim School of Management. He studied Economics at the TU Berlin and holds a doctoral degree in Economics from the TU Berlin. Czerny’s research interests cover the full range of topics in transportation economics. He was the head of the local organizing committee of the International Transportation Economics Association (ITEA) school and conference hosted by LMS in 2018, a member of the Scientific Advisory Board of the European Aviation Conference, and board member of the German Aviation Research Society (GARS). He has published numerous research papers in transportation journals and economics journals. He was awarded with the Best Overall Paper Prize of the ITEA Conference on Transportation Economics (Kuhmo Nectar) 2014 (with Anming Zhang) and the Certificate of Excellence in Reviewing from Transportation Research Part B for the year 2013.