Airport Choice in a Constraint World: Discrete Choice Models and Capacity Constraints

The purpose of this paper is to present a new approach to model capacity constraints in discrete choice with at least some capacity-related variables missing, like e.g. the price of a commodity. Airport choice models often do not contain air fares because of measurement difficulties as air fares are often not included in passenger surveys and thus essential information regarding ticket price is lost to the researcher. Since air fares vary more across ticket categories at an airport than a ticket category varies across different airports, air fare related information cannot be reconstructed in many cases by the researcher. However, capacity constraints are becoming increasingly more important and thus including capacity constraints in airport choice models is reasonable. The model approach is based on individual utility maximisation and thus fits into the discrete choice framework. Furthermore, nonlinear programming is employed to find a feasible solution regarding capacity constraints. Thereby, detailed statements on how limited airport capacity changes traveller behaviour with regard to airport choice on the level of individual air travellers and airports are possible. The paper concludes with an empirical example to demonstrate the methodology and show the impact of limited airport capacity on airport choice of air travellers.