The problem is that airlines are dealing with pass-through demand, and not solely “their” demand. If demand is inelastic — based on time of departure — then departure time demand may not change much. Business travelers are less flexible than leisure travelers, so at JFK and LGA, for example, I doubt that congestion pricing will change things much. I guess we’ll see!

Unless you charge $10M per slot.

Seriously, though, that’s exactly right. Even if you raise fees, will it be enough to slow business travel demand? Doubt it.

Well, sure, but that’s the whole point of congestion pricing–to reduce demand for flying during those times. Right now, landing fees at rush hours are relatively inelastic and demand is high, meaning that supply of slots is limited. Raise the price, and demand will be reduced. Logic dictates that if the congestion surcharge is set at the right level, airlines will reschedule or raise fares accordingly, with the eventual result of reducing congestion.

Thanks for a terrific blog!

While and infrequently served long haul city pair may have only a handful of takeoff/landing times that make sense. Most shorter haul pairs can be served at multiple times and airlines/passengers timing for say Buffalo to JFK might be more elastic.

Depending on how the pricing is done, especially if they actually limit the number of movements in a given period to an airport’s maximum and perhaps use a bidding mechanism, airlines will give people incentives to fly a bit earlier/later.