There is a good, but incomplete proposal for landing slot auctions at Chicago O’Hare at AW&ST, June 6, p.31. (Subscription required)

It includes the following:

• Rolling auctions annually for 5 year rights
• Forced reauction so that every airline must participate
• Peak time pricing
• Same price regardless of plane size

One thing that is not decided is “who should get the increased revenues that [the Justice Dept.’s] regime would likely generate or what should be done with them.”

My proposal is that the money go to the current rights holder for existing rights and the airport for new rights. That includes the auction winners. I.e., the rights would be resold and the former owner would get the proceeds. This gives the airport the right incentive to make improvements that allow more landings. It also turns the rights into capital assets. We might see better stewardship of them.

We might also see less screaming from existing rights holders because if they get the money, they are no worse off than under the current system. (Unless they were going to go bankrupt and stiff their creditors.)