Airline response to changing economics and policy

Industry strategists, government regulators, and the media have focused on addressing concerns over the performance of the air transportation system with respect to delays. One of the strategies proposed has been to limit the scheduled operations at an airport to a-priori feasible capacity limits. This approach has been criticized on the basis that it would reduce the number of markets served and increase airfares. This paper describes a comparison of the behavior of the air transportation system (e.g. markets served, airfares, delays, load factors, aircraft size) during the recent run-up in fuel prices at capacity-limited New York airports and non-slot controlled San Francisco and Philadelphia airports. The results indicate: i. Airfares change show a positive relationship to to changes in fuel prices 11. m. IV. Flights per day and Markets served show a positive relationship to changes in gross domestic product Flights per day and Markets served show a positive relationship to changes in airport capacity limits Delays and Cancellations change in proportion to Flights per day and Markets served The implications of these results are discussed in this paper.