Empirical evidence on the impact of secondary slot trading on route-level efficiency: a study of London´s heathrow airport

Abstract

The existing airport slot allocation system, burdened by rising demand and limited infrastruc ture, promotes anti-competitive practices and economic inefficiencies. It allows incumbent air lines to operate inefficient "ghost flights" to retain slots, thereby deterring new entrants and keeping slot mobility low. This master's thesis investigates a market-based alternative. Employ ing quantitative analysis, it examines the effects of secondary slot trading on the efficiency of specific routes at London's Heathrow Airport from the summer of 2016 to the winter of 2019. The research indicates that secondary slot trading results in greater route-level concentration and potentially smaller aircraft sizes, suggesting negative competitive implications. Yet, it also points out that such trading significantly expands route networks, revealing a complex balance between market dynamism and the risk of monopolization, with further research needed to refine slot trading mechanisms.