Ability of commercial airlines to fly their aircraft does not mean much without a space in which to land them. In some congested airports in the U.S., the time and place to plant known as "landing slots" and were assigned to the airline in four countries busiest airports in 1969. During the first decade of the slot system, appointments were made with little controversy Committee airline industry.
Air traffic, however, the increased demand for slots in 1980 and significantly increased the pressure on the apportionment committee slots. The idea came to resolve the competing demands: FAA can create a market for landing slots and allow demand to set the price and ration resources. This case tells the story of Secretary of Transportation Elizabeth Dole debate over whether to create a market for landing slot. He describes the options ranging from the auction "grandfather clause" that allows the airlines, which are based investment decisions on reserves slots to avoid corporate failure. The case raises questions about the legitimacy of the market to allocate resources where the problems, in addition to pure efficiency are important. It illustrates, too, the difficulties in the development of policies that will allow for the transition from one system to another. It has been used in the intermediate microeconomics program to illustrate market operations issues. There is an epilogue to this case. HKS Case Number 781.0. "Hide
by Joseph Kalt, Vlad Jenkins, Jose Gomez-Ibanez, John Mayer 20 pages. Publication Date: January 1, 1987. Prod. #: HKS818-PDF-ENG
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