Hub-airport congestion pricing and capacity investment

Ming Hsin Lin (First Author), Yimin Zhang (Participant Author)

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16 Citations (Web of Science)


This study examines hub-airport congestion pricing and capacity investment using a simple hub-spoke network model, in which hub-carrier scheduling causes both schedule delays and congestion delays. The “fixed-proportion assumption” is removed. We find the following. (i) A public hub airport requires both per-flight charges, which must be movement-related but cannot be weight-related, and discriminatory per-local and per-connecting passenger charges to reach the first-best outcome. (ii) Either weight-related per-flight charges or the marginal-operating-cost (MOC) pricing on local and/or connecting passengers cannot reach the first-best. (iii) First-best charges can lead capacity investment to be socially efficient. However, weight-related per-flights charges result in under-investment, whereas the MOC pricing results in over-investment in runway capacity. (iv) Private hubs that charge positive movement-related per-flight charges subsidize passengers through per-passenger charges. Finally, (v) movement-related per-flight charges lead private hubs to overinvest, whereas weight-related per-flight charges lead to either over- or under-investment.
Original languageEnglish
Pages (from-to)89-106
JournalTransportation Research Part B: Methodological
Publication statusPublished - 2017

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  • Capacity investment
  • Hub-airport congestion pricing
  • Hub-carrier scheduling
  • Movement-/weight-related charge
  • Profit-maximizing hub airport
  • Schedule and congestion delay

Indexed by

  • ABDC-A*
  • Scopus
  • SSCI


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