The Allocation of Landing Rights by Unanimity among Competitors

Abstract

During the late 1960s congestion of ten leading to long delays was common at major U.S. airports. To handle this problem the FAA set quotas on the number of flights per hour, and the CAB established committees of airline representatives to allocate the scarce landing rights among competing carriers. Currently the committee process has become a focal point of controversy: industry spokesmen have advocated that the system be expanded nationwide to handle developing congestion problems while others have attacked the committee process as being possibly anti-competitive and thus inconsistent with the goals of airline deregulation. This paper contains a description of the committee process, a theoretical model of the process, an analysis of the economic efficiency of the process, and a suggested alternative mechanism.