Document Type

Article

Publication Date

1-1-1986

Keywords

Federal Aviation Administration, Buy-Sell

Organizational Units

Sturm College of Law

Abstract

This article analyzes the economic and legal consequences of the FAA Buy-Sell Rule. As a background to this analysis, Part II briefly reviews the history and purposes of airline deregulation. Part III discusses airport access restrictions as a threat to free entry and, consequently, to airline deregulation. Parts IV and V review the economic and legal status of existing airport resources so that slot allocation may be viewed in the broader context of airport resources. (It will be shown, for example, that the Buy-Sell Rule fails to address entry at the most critical point of bottleneck, namely terminal space and gates.) Part VI surveys existing and proposed means of airport resource allocation so that alternative methods may be compared to Buy-Sell. Part VII reviews possible antitrust enforcement under Buy-Sell. Finally, Part VIII concludes that, while the benefits of Buy-Sell outweigh the disadvantages of existing methods, the threat of anticompetitive behavior under Buy-Sell is substantial and cannot be cured solely by antitrust enforcement. This article, therefore, proposes a modification to Buy-Sell that will reduce substantially the threat of anticompetitive behavior under Buy-Sell. This modification includes the integration of variable landing fees and a supplemental efficiency-bidding system in lieu of a lottery for recaptured slots.

Publication Statement

Copyright is held by the author. User is responsible for all copyright compliance.



Share

COinS