> * Someone else can come along and outbid you for it auction-style.*
Maybe I misunderstand your model, but which entity would run the auction? And who gets to collect the winning bids?
In the previous post, I assumed the whole market was to be a thing between the airspace participants while the air traffic authority just keep track who has blocked which part of the airspace. Would the authority now also conduct the auctions?
> That way, anyone squatting will have to pay handsomely to do so.
I'm not an economist, but I don't see why the squatters couldn't have deep pockets.
Squatting for political/strategic reasons might be done by airlines themselves - who might have large enough war chests to play games. (If the goal is to keep certain competitors out, they might not even need to win the auctions - driving up the price enough so that continued bidding becomes unviable would be enough)
If squatting for profit is viable, there might appear speculators who use credit/investor money to stay in the aucton.
> While there is no shortage of airspace, most bids would probably be fractions of a cent anyway.
My suspicion is that, just like land on the ground, different areas of airspace would have vastly different value. For drone/airtaxi/etc participants, airspace above big cities would probably be very valuable - while long-distance flights need to choose the best route, while taking distance across the globe, jetstreams, weather, distance to nearest airports, etc into account.