For airline passengers growing weary of flight delays and terminal overcrowding, a new proposal intended to encourage air-travel during off-peak hours could mean that relief is around the corner.

According to transportation economists, air-traffic congestion is a result of the formula used by many local authorities to set airport take-off and landing fees. That formula allows fees to be based on aircraft weight but not on the volume of air traffic during take-off and landing. An idea that Transportation Secretary Norman Mineta and the Federal Aviation Administration are floating would allow airport fees to reflect peak-hour runway demand, thereby encouraging planes to use runways during off hours and discouraging them during the prime-time hours of mid-morning to early evening.

The problem with weight-based fees is that they encourage smaller planes to use runways during periods of heavy traffic, which delays larger planes and reduces efficiency. At New York’s LaGuardia Airport, which has the most flight delays in the nation, 41 percent of peak-hour aircraft carry 77 passengers or less. It’s relatively common at major airports for jumbo jets to circle, wasting fuel and time, while smaller planes land.

Peak-hour pricing, which bases fees according to demand, would relieve overcrowding and reduce flight delays, thereby allowing airlines to deliver passengers to their destinations more efficiently. The proposal being touted by Secretary Mineta would also discourage airlines from clogging runways by over-scheduling takeoffs and landings during peak hours.

Of course, decreasing the volume of peak-hour flights would cause ticket prices for these flights to rise. However, this would also act as an incentive for both airlines and passengers to schedule flights during off-peak hours. Those who value the peak-hour flights the most—business travelers and day-fliers—would pay the higher price and save time that is currently wasted waiting on runways or in terminals. Those who have more traveling flexibility can benefit by paying lower prices for flights scheduled during off-peak hours.

Peak-hour fees have become common in other industries; those who buy electric power, telephone service, and even movie tickets are already familiar with them. The fees make it easier for customers who absolutely need the service during peak hours and encourage consumers with a less-urgent need to wait for better and cheaper times.

Critics of peak-hour pricing argue that higher fees would crowd out small aircraft, decrease air travel to smaller communities, and consequently harm their economic development. Although this is a legitimate concern, it is a trade-off necessary to reduce flight delays and increase efficiency. Why delay a plane carrying three-hundred passengers flying from San Francisco to Los Angeles so that a plane carrying only fifty passengers flying from San Francisco to Sacramento will arrive on time?

Those same critics might also find that peak-hour pricing would spread air traffic around to many under-utilized airports. One of the reasons Los Angeles Airport (LAX) is so crowded is that travelers have an incentive to book flights on smaller planes out of LAX rather than use the Ontario, Burbank, Long Beach, or Orange County airports. Right now, Long Beach Airport offers only eleven commercial flights a day, although it has the capacity for many more. Peak-hour pricing would increase revenue at the smaller regional airports, while allowing LAX the ability to better accommodate major flights.

Others argue against demand reduction strategies such as peak-hour pricing by calling them unnecessary, and claim that increasing airport efficiency and easing overcrowding can be achieved simply by improving air-traffic control technology and building more runways. Although these proposals should help over the long-term, Secretary Mineta was correct when he recently stated that "market-based pricing may be one part of the puzzle toward reducing congestion at some key airports in the near term."

Indeed, congestion pricing and technology upgrades complement one another because the revenue from peak-hour fees can be used to enhance air-traffic control and expand airport facilities.

Although the Bush administration’s peak-hour pricing would reduce the current epidemic of flight delays and overcrowded airports, it also suggests ways to improve air travel overall. Currently, neither the FAA, nor the local officials with whom it shares direct control of municipal airports, has sufficient incentive to respond to customer demand or update air-traffic technology.

To better align the interests of airport managers with those of airline passengers, Secretary Mineta should explore other market-based approaches that would further improve air travel. These include auctioning take-off and landing slots, following Canada’s lead in privatizing air-traffic control, and even privatizing entire airports, as has been done successfully at London’s Heathrow Airport.