Airport-airline Relationship, Competition and Welfare in a Multi-airport System The Case of New Beijing Daxing Airport

A game-theoretical model is developed in the context of the regulated multi-airport system (MAS), examining the regulator's policy in airport slot allocation and airlines' airport entry decisions. The regulator has a mixing objective to put different weights on passenger surplus and airports/airlines' profits. It can choose to intervene in airline allocation (that is, one-airport-one-airline rule) or not. It is found when the regulator does not intervene in airline allocation, airlines choose to enter both airports bringing about higher welfare. However, the regulator would intervene if it puts a sufficiently high weight on airports/airlines' profits.

Automated summary

This article examines the regulator's policy choices in airport slot allocation and airlines' entry decisions in a multi-airport system. It is found that the regulator would intervene in airline allocation if it places a strong emphasis on airports/airlines' profits.