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traffic demand is close to capacity even under good weather conditions: delays become long and schedule reliability deteriorates on days when weather conditions are less than ideal. One obvious way to deal with these problems, at least in the short and medium run, is through demand management . This term refers to any set of administrative and/or economic measures and regulations aimed at restraining the demand for access to an airport during certain parts of the day and/or of the year, when congestion might otherwise be experienced. Demand management is a proactive approach, in the sense that the associated measures and regulations are set months in advance and for extended periods (e.g., for six months at a time). This is different from the more dynamic (or reactive) air traffic flow management measures, such as delaying aircraft on the ground before takeoff or rerouting them when airborne, which are taken on a daily basis by ATM service providers (e.g., the FAA in the USA, EUROCONTROL in Europe) to address the specific demand/capacity relationships that prevail on any given day21 and to alleviate congestion on that particular day. Airport demand management is practiced very extensively outside the USA. The fun- damental mechanism used for this purpose is the Schedule Coordination (SC) process that has been developed by the International Air Transport Association (IATA) and is applied 20 See Chapters 12 and 13 for a more detailed discussion of airport capacity and congestion. 21 Demand management and air traffic flow management, far from being mutually exclusive, can work in a comple- mentary way, with demand management restricting demand to a priori reasonable levels (compared to the typical capacity of an airport) and air traffic flow management smoothing out everyday problems.




34 The International Institutional and Regulatory Environment almost universally with some local or regional variations. The description of this process provided below omits many important details that can be found in IATA (2005) or in de Neufville and Odoni (2003). The SC process classifies certain airports as fully coordinated . A fully coordinated airport is one where demand exceeds capacity during the relevant period22 and it is impossible to resolve the problem through voluntary co-operation between airlines (IATA,



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