NCPA - National Center for Policy Analysis

Airline Hub System Contributes To Delays

April 26, 2001

A combination of airport management practices and the development of the hub system has resulted in major airports that are heavily dominated by a single carrier: Delta in Atlanta, Northwest in Detroit, TWA in St. Louis, etc. These airlines dominate particular airports because of airport management practices and regulatory actions that have effectively stifled competition, says journalist M. Stanton Evans.

If the system had grown up through free market arrangements in response to consumer preference, it might be defensible. However, says Evans, most of the evidence shows it has come about for very different reasons.

So how does a major airline come to dominate an airport? According to reports and studies by the Department of Transportation (DOT) and National Research Council (NRC), there are three main factors:

  • Financing measures, which give incumbent carriers the power to veto or slow airport expansion or improvements that might allow for effective competition.
  • Leasing arrangements that consign a huge percentage of available gates to these same carriers on an "exclusive" or -- more recently -- "preferential" basis.
  • Allocation of landing slots at certain major airports by federal fiat, rather than market pricing, often to these same carriers, so that their dominant position is made even more secure.

Statistics show passenger complaints about delays at the nation's busiest airports have more than doubled between 1998 and 2000 -- from 7,980 to 17,381. Given the state of the nation's air travel system, the likelihood is that the situation will get still worse in the days to come.

Source: M. Stanton Evans, "Airport 2000: How to Break the Gridlock," Consumers' Research, November 2000.

 

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