The Congestion Pricing Solution ...

... is back in the airport news, with an eye on New York’s airports. Last Friday’s Wall Street Journal, in an editorial entitled “Airport Solutionsâ€, suggests that “economics offers a better way to manage scarcity: Use prices to ration capacity at peak times.†We’ve been here before. Back in the 1980s we called it “peak period pricing†and the poster airports in that era were Boston and Denver (Stapleton). Those initiatives, however, were more focused on pushing general aviation out of the commercial airport to open up ground capacity for the airlines. Back then, GA groups fought vehemently to thwart the initiatives, with the support of DOT/FAA. This time, however, it’s DOT/FAA leading the charge. The groundwork for the change was laid several years back when the Transportation Department changed its argument and opened the door for congestion pricing, with the caveat that it be revenue-neutral. Subsequently, Boston Logan received support from FAA for a new runway that in time could be allowed to incorporate congestion pricing once certain activity levels were reached. The door was now cracked open. But the delays, customer complaints, and significant media focus on New York’s airports, and their ripple effect through the system, are accelerating change. The WSJ cites a Reason Foundation simulation that indicates the implementation of congestion pricing at New York’s airports would result in the carriers rescheduling some 15 percent of peak period flights. Of note is the fact that both the airlines and the Port Authority of New York & New Jersey, which operates the New York airports, oppose the move. The belief in this corner is that ultimately the answer lies in technology and investment – reinventing the air traffic control system and ongoing dollars pumped into airport infrastructure. Larger airports would add that they would like to have more control on the management of their airport systems – but one can of worms at a time. The Wall Street Journal concludes: “The price mechanism allocates supply in all kinds of crazy markets. Why not at airports?†In the short term, maybe. Long term, it’s not that simple. Thanks for reading. jfi