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Public versus private airport behavior when concession revenues exist

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  • Czerny, Achim I.
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    Abstract

    The share of revenues from airport concession services among airports worldwide has reached an average level of roughly 50% today. Since concessions may exert downward pressure on the private aeronautical charge, the question is whether price regulation of private airports has become obsolete. The recent literature on airport concessions suggests that private airport pricing may still be excessive from the social viewpoint. This paper complements this literature by considering (i) two distinct types of concession services called retail services and car rentals, (ii) two-sided demand complementarity between aeronautical and concession services, and (iii) specific airport concession services that are welfare neutral in the sense that the surplus derived from concession services is independent of traveling activities. In this setting, airport price regulation can become obsolete, but concession services of the car-rental type can also increase the benefits of airport price regulation.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics of Transportation.

    Volume (Year): 2 (2013)
    Issue (Month): 1 ()
    Pages: 38-46

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    Handle: RePEc:eee:ecotra:v:2:y:2013:i:1:p:38-46

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    Web page: http://www.elsevier.com/locate/ecotra

    Related research

    Keywords: Airport privatization; Concessions; Retail services; Car rentals; Congestion;

    References

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    Cited by:
    1. Valentina Bracaglia & Tiziana D'Alfonso & Alberto Nastasi, 2014. "Multiproduct airport competition and e-commerce strategies," DIAG Technical Reports 2014-04, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    2. Xiao, Yibin & Fu, Xiaowen & Zhang, Anming, 2013. "Demand uncertainty and airport capacity choice," Transportation Research Part B: Methodological, Elsevier, vol. 57(C), pages 91-104.
    3. repec:aeg:report:2014-4 is not listed on IDEAS

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