Jefatura de Gabinete de Ministros
MINISTERIO DE SALUD
M. Cristina Galoppo
4. Preadjudicar a la oferente Indaltec S.A., por la suma de pesos catorce millones sesenta y nueve mil trescientos setenta y ocho con veintisiete centavos ($
In this section we examine situations where excess demand for slots exists and allocation of the slots appears to be inefficient. We start by defining what we mean by inefficiency.
4.4.1. Defining inefficiency
An allocation of slots is inefficient if an alternative allocation exists which would deliver more net benefits. The net benefits of allocating a slot are:
Total passengers’ willingness to pay for the flight – total paid in airfares + revenue to airline + revenue to airport – airline’s marginal costs and charges – airport’s marginal costs – net external costs.
Some of these items cancel, for example charges levied by the airport to the airline are revenues for the airport but charges for the airline (though they may also include taxes). Hence, the above expression can be written in a variety of forms. For example, total net benefits can also be expressed as
Benefits to passengers (net of airfares and other costs) + marginal profit to airline + marginal profit to airport – net external costs.25
The net benefits (or relative efficiency) of a particular allocation A relative to an allocation B is:
{Benefits to passengers of allocation A – benefits to passengers of allocation B}
+ {marginal profit to the airlines and airports resulting from allocation A – marginal profit to the airlines and airports resulting from allocation B}
- {net external costs caused by allocation A
- net external costs caused by allocation B}
We are not able to estimate the change in benefits, and hence the change in efficiency, directly because we do not have information on different airlines’ marginal costs for different types of services and have little information on revenue. Instead, we can make the
25 The economics terminology is that the benefits are the sum of the “consumer surplus” (passengers’ benefits) and
57 following observations, which identify how broad estimates of the size of benefits can be estimated.
•
Allocating a slot to a service with high airline revenues will be more efficient than allocating it to a service with low revenues, provided that the benefits of higher revenues are not outweighed by higher costs.•
An allocation to an airline which has an efficient cost base, all other things being equal, will be more efficient than an allocation to an airline which has an inefficient cost base. This does not necessarily mean that an airline with low costs will always be more efficient. Higher costs may be justified if they are a reflection of higher service quality which in turn delivers higher revenue and / or passengers’ benefits.•
We expect that a flight with more passengers will on average deliver more net benefits than a flight with fewer passengers. Total passengers’ benefits will typically be greater if there are more passengers, and airlines and airports’ profits are both strongly correlated to the number of passengers. Clearly a flight with a higher loading of passengers will usually have more net benefits than another otherwise identical flight. But an airline’s decision to accommodate more passengers will be a commercial one, and so on average more passengers should imply greater benefits even if there are more associated costs.26•
Similarly, we expect a flight with more seats to deliver more net benefits than a flight with fewer seats, on the basis that a larger plane is provided because more passengers are expected and are commercially justified.•
All other things being equal, allocating a slot to a flight causing less external costs (for example environmental costs) will be more efficient than allocating it to a flight with more external costs.In practice, we have not found it possible to obtain reliable data on airline revenues and costs on an airport by airport basis, or distinguishing between peak and off peak periods. Data on passenger numbers tends to be aggregate. We do have disaggregate data on numbers of seats.
4.4.2. Use of small aircraft
The use of small planes at times of excess demand may be an indicator of inefficient use of runway capacity, especially if the small number of passengers signals a relatively low total
26 This condition will always hold when comparing like with like. If comparing different types of service, for
example a small service for mainly business passengers and a larger service for mainly economy passengers, the correlation of benefits to number of passengers may break down.
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willingness to pay for the service.27 Some services operated by small planes may be very
profitable, but on average we expect services with small planes to be less profitable than those with larger planes. This is also supported by the evidence presented in Section 3.6, which shows that services operated by small planes account for a lower proportion of slots at airports which are more congested.
Figure 4.3 shows alternative analysis, namely size of aircraft across EU Category 1 airports, but restricted to times of the day where use of slots is constrained.28 This analysis reveals
that 8 per cent of these slots (around 3,300 slots per week in total) are used by aircraft with 50 or fewer seats; 16 per cent are used by aircraft with fewer than 100 seats. We have found that these statistics are only marginally affected by public service obligation flights (which often operate with small planes) because most of the airports in the sample have few or no PSO services. To illustrate this, the Figure shows the profile of seat sizes for Orly airport separately; Orly is unusual in that around 14 per cent of all slots are used for PSOs.29
Figure 4.3
Size of Passenger Aircraft During Slot Constrained Times, Summer 2002 Season
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 0 50 90 130 170 210 250 290 330 370 410 450 510
Number of seats per aircraft
P rop ort io n of a irc ra ft
All Airports ORY
27 This might not be the case if, for example, a high proportion of passengers were time-sensitive business users, or
were transferring to long-haul flights.
28 We have used a proxy for slot constraint: those hours where the number of slots scheduled exceed 90 per cent of
the hourly slot capacity (and we have also included Orly airport which has a binding annual constraint). This measure is conservative because there will be other times of slot constraint, for example where a directional runway capacity threshold is met, which are not included in this measure. All EU Category 1 Airports where this threshold is met have been included, 19 airports in total, with the exception of Germany and Finland for which we do not have the necessary data. We have also excluded night flights. Only passenger aircraft are shown.
29 If the analysis excludes Orly, we find that 7 per cent of slots at constrained times are used by aircraft with 50 or
fewer seats, 16 per cent are used by aircraft with 100 or fewer seats. The equivalent figures for Orly alone are 10 per cent and 15 per cent respectively.
59 The structure of airport charges influences aircraft size. Landing charges for many airports are highly differentiated by aircraft weight so that smaller aircraft pay less. BAA found that the number of small aircraft used at Heathrow fell sharply after landing charges were reformed in the mid 1980s so that they were a flat rate for all sizes of aircraft at peak times. The number of movements under 16 tonnes fell from 3.5 per cent in 1984/85 to 0.01 per cent in 1992/93.30 Our data suggest that this effect has persisted. For example, in the Summer
2002 season there were only around 40 (0.6 per cent) scheduled movements a week at Heathrow operated by aircraft with 50 or fewer seats (7am to 7pm local time). The equivalent statistic for Madrid, another very congested airport, is 500 movements a week (12 per cent of scheduled movements). In common with many airports, Madrid’s landing charges are highly differentiated by aircraft weight.
4.4.3. High frequency services
Several airport operators drew our attention to another possible indicator of inefficient use of slots, based on the relationship between service frequency and the size of aircraft used for the service.
Düsseldorf Airport and others have examined the relationship between service frequency and aircraft size with the aim of increasing aircraft size and hence airport revenue. Under OPUS (Optimisation Programme for Using Slots), they propose prohibiting use of slots for high frequency services with small aircraft. Such services are identified using the size- frequency-ratio, which is defined as follows:
SFR = {average number of seats offered by an airline X on a route Y per departure} divided by {average number of departures by airline X on a route Y per day}
The ratio would apply within a certain frequency range (for example for services with between five and eight departures a day), and may vary by airport and type of service (for example domestic, intra-European etc).
Figure 4.4 shows the average number of seats per service on high frequency services at EU Category 1 airports which are slot constrained.31 According to the proponents of OPUS, the
use of small planes to operate such services is indicative of inefficient use of slots for which there is excess demand.
The small number of services with more than 200 seats per movement operate to both long haul and short haul destinations. Services with small aircraft tend to operate over shorter distances, sometimes competing with rail services, and are a mixture of domestic and
30 M R Toms (1994), “Charging for Airports: The New BAA Approach”, Journal of Air Transport Management.
31 We define “high frequency” services as those for which there are at least five flights a day in each direction
operated by a single airline. The services shown are those from or to highly congested airports, or are between pairs of moderately or highly congested airports; the classification of these categories is given in Section 3.
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international flights. The very high frequency services tend to be domestic, typically competing with rail services.
The Figure also shows a SFR of 25, applied for up to 8 frequencies a day. It is interesting to note that most high frequency services from EU Category 1 airports would fail to comply with a SFR of 25 or 30, say, which are values used for illustrative purposes by Frankfurt Airport.
Figure 4.4
High Frequency Services at EU Category 1 Airports
0 50 100 150 200 250 300 5 10 15 20 25 30
Services per day
A ver ag e n u m b er o f seat s p er p la n e
Although a market mechanism might lead to the use of larger aircraft in general, it is by no means clear that application of the OPUS approach would come near to replicating the effects of market mechanisms, and its impact would depend on the particular value of the SFR that was applied. Unlike OPUS, market mechanisms would allocate capacity on the basis of willingness to pay, and would might result in increases in frequencies, without the use of larger aircraft, on routes where users placed a high value on service frequency.
4.4.4. High external costs
The use of airport capacity may also be inefficient if the services that use the airport produce high external costs, for example as a result of excessive noise or pollution.
This may be the case because existing slot allocation mechanisms do not take environmental costs caused by particular types of services into account. The main mechanism, grandfathering of slots, does not provide for the withdrawal of grandfather rights if slots are used by environmentally unfriendly services. The environmental performance of airlines is
61 of course influenced by other legislation (for example Council Directive 92/14 banning all Chapter 2 aircraft from European airports after April 2002), but this does not involve changes to the allocation of slots.
Regulation 95/93 does not provide for the use of environmental criteria in the allocation of pool slots by coordinators, although local rules could in theory provide for this. In Member States where environmental criteria are taken into account, this is usually done by setting airport capacity in environmental terms (for example, setting overall annual limits on movements or on the amount of noise produced), rather than taking environmental criteria into account in the slot allocation process itself.