Air Traffic Control Regulation with Union Bargaining

25 Pages Posted: 4 Sep 2015

See all articles by Thomas Blondiau

Thomas Blondiau

Center for Economic Studies - KU Leuven

Amihai Glazer

University of California, Irvine - Department of Economics

Stef Proost

KU Leuven - Department of Economics

Date Written: August 2015

Abstract

This paper studies the behavior of the air traffic control (ATC) centers in the EU. We investigate the functioning of the European ATC sector with a union bargaining model. In this model, working conditions are the outcome of a bargaining game between the public air traffic control agency and the unions of air traffic controllers. We use this framework to understand the behavior of the ATC centers for wage formation, their reactions to a price-cap, adoption of new technologies, congestion pricing, effect of vertical disintegration, competition and the possible success of mergers between different national ATC centers. The theory is able to explain the slow progress in ATC performance in a unionized environment. We also test the theoretical model and estimate its parameters. The empirical analysis is based on actual ATC performance data.

Keywords: Air transport control, public utilities, price control, union bargaining

JEL Classification: L93, R48, J51, L51, L44, L33

Suggested Citation

Blondiau, Thomas and Glazer, Amihai and Proost, Stef V., Air Traffic Control Regulation with Union Bargaining (August 2015). Available at SSRN: https://ssrn.com/abstract=2655612 or http://dx.doi.org/10.2139/ssrn.2655612

Thomas Blondiau (Contact Author)

Center for Economic Studies - KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Amihai Glazer

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States
949-854-6563 (Phone)
949-824-2182 (Fax)

Stef V. Proost

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium
016 32 66 35 (Phone)
016 32 67 96 (Fax)

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