The costs of peak-load demand: an application to Gran Canaria airport

Abstract

Many airports suffer from peak-load demand problems. To meet unconstrained demand at peak periods, they often invest in extra capacity that may be under used at other times. We use data from the airport in Gran Canaria to illustrate that costs associated with the peak-load problem are not only those related to the new investment. This paper provides a methodology for analyzing the costs arisen due to the peak-load demand, to explore alternative airport policies and to illustrate the problem of congestion at airport terminals. The results suggest that a situation in which airports differentiate charges by peak and off-peak days would be much desirable.