The Social Cost of Air Traffic Delays

29 Pages Posted: 2 Feb 2015

See all articles by Etienne Billette de Villemeur

Etienne Billette de Villemeur

Lille University; CNRS - Lille Economics & Managment - UMR 9221

Marc Ivaldi

Toulouse School of Economics; Centre for Economic Policy Research (CEPR)

Emile Quinet

Ecole Nationale des Ponts et Chaussées (ENPC) - Centre d'Enseignement et de Recherche en Analyse Socio-Economique (CERAS)

Miguel Urdanoz

University of Toulouse 1 - Toulouse School of Economics (TSE)

Date Written: February 2015

Abstract

The so-called buffer time or buffer delay allows airlines to control for excessive delays by introducing extra time in their schedule in addition to what is technically required. . We study the differences between unregulated markets - where airlines are free to fix their buffer times strategically - and a situation where a social planner would control for time schedules, and in particular the buffer time. To do so, we use a calibrated model of a network of three cities - one of them being a hub - served by a single airline. Welfare losses that follow from delays are relatively small as compared to the potential benefits that would follow from a decrease in ticket prices. The model thus advocates that, at least for the connections that are considered, fares rather than delays should be the focus of institutions aiming at enhancing passengers’ welfare.

Keywords: calibration, delays, social optimum

JEL Classification: L50, L93, R41

Suggested Citation

Billette de Villemeur, Etienne and Billette de Villemeur, Etienne and Ivaldi, Marc and Quinet, Emile and Urdanoz, Miguel, The Social Cost of Air Traffic Delays (February 2015). CEPR Discussion Paper No. DP10386, Available at SSRN: https://ssrn.com/abstract=2559327

Etienne Billette de Villemeur (Contact Author)

CNRS - Lille Economics & Managment - UMR 9221 ( email )

Lille
France

Lille University ( email )

Lille
France

Marc Ivaldi

Toulouse School of Economics ( email )

Manufacture des Tabacs
21 Allee de Brienne bat. F
Toulouse Cedex, F-31000
France
+33 5 61 12 8592 (Phone)
+33 5 61 12 8637 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Emile Quinet

Ecole Nationale des Ponts et Chaussées (ENPC) - Centre d'Enseignement et de Recherche en Analyse Socio-Economique (CERAS) ( email )

28, rue des Saints-Peres
75007 Paris
France

Miguel Urdanoz

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

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