Auctioning Airspace

30 Pages Posted: 27 Nov 2018 Last revised: 21 Dec 2018

See all articles by Brent Skorup

Brent Skorup

George Mason University - Mercatus Center

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Date Written: November 14, 2018


The commercialization of air taxis and autonomous passenger drones will one day congest urban airspace. Operators expect that, once flights are autonomous and the cost of service falls, high traffic urban “vertiports” could see hundreds of air taxi takeoffs and landings per hour. Low altitude airspace—between 200 feet and 5000 feet above ground level—offers a relatively blank slate to explore new regulatory models for air traffic management and avoid command-and-control mistakes made in the past in aviation. Regulators’ current proposals would centralize air taxi traffic management into a single system to coordinate air taxi traffic, but this approach likely creates technology lock-in and unduly benefits the initial operators at the expense of later innovators. To facilitate the development of this transportation market, regulators should consider demarcating aerial travel corridors and auctioning exclusive use licenses to operators for use of those corridors, much as regulators auction radio spectrum licenses and offshore wind energy sites. Exclusive rights to routes would allow transfer and sale to more efficient operators and would also give operators the certainty they need to finance the substantial capital investments.

Keywords: VTOL, eVTOL, air taxi, airspace, auction, property, UTM, drone, air transportation, commons, regulation, license, autonomous

JEL Classification: K23, L51, L93, L98, Q0, R48

Suggested Citation

Skorup, Brent, Auctioning Airspace (November 14, 2018). Mercatus Research Paper, Available at SSRN: or

Brent Skorup (Contact Author)

George Mason University - Mercatus Center ( email )

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