This paper argues that the U.S. government, through a neutral agent, should actively market FAA airline slots at a profit rather than ceding full control to a free-market auction. The author presents three supporting arguments — addressing regulatory balance, taxpayer investment in infrastructure, and a middle-ground compromise — alongside three counter-arguments favoring pure market mechanisms. The paper then challenges those counter-arguments using data from Exhibit 2 of the Harvard Kennedy School case study, showing that smaller regional airlines and charters lost 91 slots at pacer airports, suggesting that monopolistic and oligopolistic forces undermined the theoretical benefits of market-based slot allocation.
The paper employs a classic argument-counterargument-rebuttal structure. By explicitly listing counter-arguments and then systematically dismantling them with case study evidence, the author demonstrates how to engage fairly with opposing positions while maintaining a clear thesis — a technique valued in policy analysis and persuasive academic writing.
The paper opens with a direct policy recommendation and its theoretical justification. It then presents three numbered supporting arguments followed by three numbered counter-arguments, maintaining symmetry. The final analytical section rebuts the counter-arguments using specific data, and an appendix summarizes the key quantitative evidence. This format mirrors a short policy brief or position paper typical of public administration coursework.
The United States government should not merely allow airline landing slots to be marketed — it should employ a neutral agent without formal ties to any airline to market those slots at a profit, generating revenue for the government during periods of economic recession (or at any time, for that matter). While the Federal Aviation Administration (FAA) has been accused of favoring regulatory approaches over non-regulatory ones, Alfred F. Kahn's concept of a "special kind of idiocy" applies here as well: it is counterproductive for the government to create a market and then be prohibited from controlling the sale of the product or service it produces ("Case Studies on Public Management," p. 2).
The following arguments support this recommendation:
First, while there may have been excessive regulation at the beginning of the Reagan administration, the pendulum has since swung considerably in the opposite direction. A recalibration is warranted.
Second, if the FAA were to relinquish control over such an important part of the nation's transportation system, consistency would demand a similar relinquishment over the road system — which is clearly impractical. The system is too interconnected to allow multiple competing companies to make overarching decisions without coordination. Because taxpayer money was used to build the network, taxpayers must retain a commanding presence in how slots within that system are distributed. This directly addresses the concern raised by Representative Norm Mineta (ibid, p. 1).
Third, this position represents a compromise between the previous slot allocation system and an outright free-market auction. It accommodates both ends of the spectrum: it employs market mechanisms while keeping the government fully engaged in regulating slot allocations. An ancillary benefit is a new revenue stream for the cash-strapped federal government during a prolonged recession.
The counter-arguments in favor of a pure market approach are as follows:
First, the market is the most effective mechanism for regulating supply and demand disparities. Artificial government intervention will only upset that natural balance.
Second, the market would not simply favor carriers with deep pockets at taxpayer expense. The FAA itself concluded that it would not be profitable for a large airline to operate a low-valued flight merely because it had the financial resources to do so (ibid, p. 5).
Third, an airline carrier that expects to offer high-valued flights but is short on cash should be able to borrow to finance the slots it needs. The ability of an airline to secure financing for equipment and slot purchases depends upon the expected profits from the intended use of those assets.
"Department of Transportation and Airport Landing Slots (TN)." Case Studies on Public Management. Kennedy School of Government, 2011. Web. 28 Feb. 2011. <http://www.ksgcase.harvard.edu/casetitle.asp?caseNo=781.2>.
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