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Auction of landing slots could at least help pay for infrastructure

August 24, 2008

Articles from the New York Sun indicate that there’s serious interest in auctioning landing slots at the New York area airports. Mayor Bloomberg and the Bush Administration are in favor, Port Authority less enthused. No mention of what they’d be worth, but a US DOT official said

[T]he whole point of the auctions was to generate the proceeds necessary to build out an upgraded infrastructure at participating airports.

which implies that they’re not expecting to even cover the full cost of existing infrastructure, let alone the rent (that is, what the site and the right to operate an airport would be worth if the airport didn’t exist). The earlier article notes that it would incentivize carriers to operate larger aircraft, presumably providing more capacity.

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One comment

  1. I did some cursory research the other day for a post I was writing about the UK Competition Commission’s recommendation that BAA (British Airports Authority as was) sell one or more of their three London airports which turned up research done by Deloitte when the “open skies” agreement came in suggesting that British Airways’ slot portfolio (I think meaning at Heathrow alone) could be worth up to £2bn (compared with their overall market cap of £2.7bn.

    The report is referenced in that post of mine if you’re interested. It did mention that there were only a few airports in the US I think where there would be an economic rent because of oversupply of capacity.



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