Opinion ID: 150469
Heading Depth: 3
Heading Rank: 1

Heading: Excess Demand

Text: Excess demand arises when demand for a good or service at the prevailing price exceeds the supply, which results in would-be buyers having to queue. In the air transportation system, the buyers are airlines, the service is allowing an aircraft to land at a particular airport, and the price is the landing fee the airport charges the airline for landing. The delays in landing are manifestations of there being a queue. In an ordinary market, supply and price adjust to eliminate excess demand, but this is no ordinary market. Airports cannot readily increase the supply of landing slots because building more runways takes years and at some airports is not feasible at all. See Policy Regarding Airport Rates and Charges, 73 Fed.Reg. 3310, 3312/3 (proposed Jan. 17, 2008). Nor may airports freely increase the price as demand increases; the amount an airport may charge as a landing fee is constrained by the oversight of the DOT and by several federal statutory restrictions. Adding to the difficulty of managing congestion, the volume of air traffic varies significantly both throughout the day and from one airport to another. Not all airports suffer from significant congestion, even at the most desirable times (or rush hours). Addressing this variation in the demand for landings requires giving airports some flexibility in rate-setting.