IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v80y2019ic3.html
   My bibliography  Save this article

Multi-airport privatization in a Japanese region with trip-chain formation

Author

Listed:
  • Xu, Fangzhou
  • Hanaoka, Shinya
  • Onishi, Masamitsu

Abstract

This study investigates how multi-airport privatization in a tourism region would affect the regional air transport market. An optimization model is developed to formulate the objectives of the three stakeholders, namely airports, airlines, and travelers, to evaluate the market outcomes in different cases. Leisure trip-chain travelers are specifically considered in the presented model, as such a group-level privatization approach has a greater impact on the decisions of trip-chain travelers. As a case study, we select the Hokkaido region in Japan, which is planning to privatize seven airports as a group in 2020, and estimate demand, the profits of airports and airlines, the consumer surplus, and the total surplus in the cases of public operation, airport profit maximization, and single-till and dual-till approaches. The results show that (1) multi-airports privatization enables operator to coordinate airport charges among the group to improve the total surplus. The optimal pattern of airport charges can vary according to the proportion of potential leisure demand. (2) The positive impact of airports’ pricing coordination in a dual-till approach is more limited than that in a single-till approach. (3) Airport charges may not be coordinated in the case of airport profit maximization, even when potential leisure demand is very high; this decreases the consumer surplus and total surplus.

Suggested Citation

  • Xu, Fangzhou & Hanaoka, Shinya & Onishi, Masamitsu, 2019. "Multi-airport privatization in a Japanese region with trip-chain formation," Journal of Air Transport Management, Elsevier, vol. 80(C), pages 1-1.
    • Handle: RePEc:eee:jaitra:v:80:y:2019:i:c:3
    DOI: 10.1016/j.jairtraman.2019.101690
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699719300341
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jairtraman.2019.101690?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chen, Ying-Hsiu & Lai, Po-Lin & Piboonrungroj, Pairach, 2017. "The relationship between airport performance and privatisation policy: A nonparametric metafrontier approach," Journal of Transport Geography, Elsevier, vol. 62(C), pages 229-235.
    2. Mantin, Benny, 2012. "Airport complementarity: Private vs. government ownership and welfare gravitation," Transportation Research Part B: Methodological, Elsevier, vol. 46(3), pages 381-388.
    3. Saraswati, Batari & Hanaoka, Shinya, 2014. "Airport–airline cooperation under commercial revenue sharing agreements: A network approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 17-33.
    4. Lin, Ming Hsin & Mantin, Benny, 2015. "Airport privatization in international inter-hub and spoke networks," Economics of Transportation, Elsevier, vol. 4(4), pages 189-199.
    5. Cruz, Carlos Oliveira & Sarmento, Joaquim Miranda, 2017. "Airport privatization with public finances under stress: An analysis of government and investor's motivations," Journal of Air Transport Management, Elsevier, vol. 62(C), pages 197-203.
    6. Oum, Tae H. & Adler, Nicole & Yu, Chunyan, 2006. "Privatization, corporatization, ownership forms and their effects on the performance of the world's major airports," Journal of Air Transport Management, Elsevier, vol. 12(3), pages 109-121.
    7. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
    8. Jin Y. Yen, 1971. "Finding the K Shortest Loopless Paths in a Network," Management Science, INFORMS, vol. 17(11), pages 712-716, July.
    9. Oum, Tae H. & Yan, Jia & Yu, Chunyan, 2008. "Ownership forms matter for airport efficiency: A stochastic frontier investigation of worldwide airports," Journal of Urban Economics, Elsevier, vol. 64(2), pages 422-435, September.
    10. Hsu, Chaug-Ing & Wen, Yuh-Horng, 2003. "Determining flight frequencies on an airline network with demand-supply interactions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 39(6), pages 417-441, November.
    11. Zhang, Anming & Zhang, Yimin, 2006. "Airport capacity and congestion when carriers have market power," Journal of Urban Economics, Elsevier, vol. 60(2), pages 229-247, September.
    12. Scotti, Davide & Malighetti, Paolo & Martini, Gianmaria & Volta, Nicola, 2012. "The impact of airport competition on technical efficiency: A stochastic frontier analysis applied to Italian airport," Journal of Air Transport Management, Elsevier, vol. 22(C), pages 9-15.
    13. Noruzoliaee, Mohamadhossein & Zou, Bo & Zhang, Anming, 2015. "Airport partial and full privatization in a multi-airport region: Focus on pricing and capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 45-60.
    14. Swan, William M. & Adler, Nicole, 2006. "Aircraft trip cost parameters: A function of stage length and seat capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 42(2), pages 105-115, March.
    15. Zhang, Anming & Zhang, Yimin, 2003. "Airport charges and capacity expansion: effects of concessions and privatization," Journal of Urban Economics, Elsevier, vol. 53(1), pages 54-75, January.
    16. Lin, Ming Hsin & Zhang, Yimin, 2017. "Hub-airport congestion pricing and capacity investment," Transportation Research Part B: Methodological, Elsevier, vol. 101(C), pages 89-106.
    17. Rico Galeana, Oscar Armando, 2008. "The privatisation of Mexican airports," Journal of Air Transport Management, Elsevier, vol. 14(6), pages 320-323.
    18. Li, Zhi-Chun & Lam, William H.K. & Wong, S.C. & Fu, Xiaowen, 2010. "Optimal route allocation in a liberalizing airline market," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 886-902, August.
    19. Bendinelli, William E. & Bettini, Humberto F.A.J. & Oliveira, Alessandro V.M., 2016. "Airline delays, congestion internalization and non-price spillover effects of low cost carrier entry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 85(C), pages 39-52.
    20. Oum, Tae H. & Adler, Nicole & Yu, Chunyan, 2006. "Privatization, Corporatization, Ownership Forms and their Effects on the Performance of the World’s Major Airports," 47th Annual Transportation Research Forum, New York, New York, March 23-25, 2006 208026, Transportation Research Forum.
    21. Zhang, Anming & Zhang, Yimin, 2010. "Airport capacity and congestion pricing with both aeronautical and commercial operations," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 404-413, March.
    22. Forsyth, Peter & Niemeier, Hans-Martin & Wolf, Hartmut, 2011. "Airport alliances and mergers – Structural change in the airport industry?," Journal of Air Transport Management, Elsevier, vol. 17(1), pages 49-56.
    23. David Starkie, 2008. "The Airport Industry in a Competitive Environment: A United Kingdom Perspective," OECD/ITF Joint Transport Research Centre Discussion Papers 2008/15, OECD Publishing.
    24. Se-il Mun & Yusuke Teraji, 2012. "The Organisation of Multiple Airports in a Metropolitan Area," Journal of Transport Economics and Policy, University of Bath, vol. 46(2), pages 221-237, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Brito, Igor R.S. & Oliveira, Alessandro V.M. & Dresner, Martin E., 2021. "An econometric study of the effects of airport privatization on airfares in Brazil," Transport Policy, Elsevier, vol. 114(C), pages 338-349.
    2. Antwi, Collins Opoku & Fan, Chong-jun & Ihnatushchenko, Nataliia & Aboagye, Michael Osei & Xu, Hangyu, 2020. "Does the nature of airport terminal service activities matter? Processing and non-processing service quality, passenger affective image and satisfaction," Journal of Air Transport Management, Elsevier, vol. 89(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brito, Igor R.S. & Oliveira, Alessandro V.M. & Dresner, Martin E., 2021. "An econometric study of the effects of airport privatization on airfares in Brazil," Transport Policy, Elsevier, vol. 114(C), pages 338-349.
    2. Li, Zhi-Chun & Tu, Ningwen & Fu, Xiaowen & Sheng, Dian, 2022. "Modeling the effects of airline and high-speed rail cooperation on multi-airport systems: The implications on congestion, competition and social welfare," Transportation Research Part B: Methodological, Elsevier, vol. 155(C), pages 448-478.
    3. Álvarez-Sanjaime, Óscar & Cantos-Sánchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2020. "A three-stage competition game in an air transport network under asymmetric valuation of flight frequencies," Economics of Transportation, Elsevier, vol. 21(C).
    4. Choo, Yap Yin & Corbo, Leonardo & Wang, Kun, 2018. "Joint impact of airline market structure and airport ownership on airport market power and profit margin," Transport Policy, Elsevier, vol. 72(C), pages 67-78.
    5. Lin, Ming Hsin, 2013. "Airport privatization in congested hub–spoke networks," Transportation Research Part B: Methodological, Elsevier, vol. 54(C), pages 51-67.
    6. Dixit, Aasheesh & Jakhar, Suresh Kumar, 2021. "Airport capacity management: A review and bibliometric analysis," Journal of Air Transport Management, Elsevier, vol. 91(C).
    7. Rolim, Paula S.W. & Bettini, Humberto F.A.J. & Oliveira, Alessandro V.M., 2016. "Estimating the impact of airport privatization on airline demand: AÂ regression-based event study," Journal of Air Transport Management, Elsevier, vol. 54(C), pages 31-41.
    8. Littlechild, Stephen, 2018. "Economic regulation of privatised airports: Some lessons from UK experience," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 100-114.
    9. Álvarez-SanJaime, Óscar & Cantos-Sanchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2021. "The effect of cooperative infrastructure fees on high-speed rail and airline competition," Transport Policy, Elsevier, vol. 112(C), pages 125-141.
    10. Aguirre, Julio & Mateu, Pedro & Pantoja, Chrissie, 2019. "Granting airport concessions for regional development: Evidence from Peru," Transport Policy, Elsevier, vol. 74(C), pages 138-152.
    11. Noruzoliaee, Mohamadhossein & Zou, Bo & Zhang, Anming, 2015. "Airport partial and full privatization in a multi-airport region: Focus on pricing and capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 45-60.
    12. Zhang, Anming & Czerny, Achim I., 2012. "Airports and airlines economics and policy: An interpretive review of recent research," Economics of Transportation, Elsevier, vol. 1(1), pages 15-34.
    13. Kenneth Button, 2020. "Studying the empirical implications of the liberalization of airport markets," Competition and Regulation in Network Industries, , vol. 21(3), pages 223-243, September.
    14. Sheng, Dian & Li, Zhi-Chun & Xiao, Yi-bin & Fu, Xiaowen, 2015. "Slot auction in an airport network with demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 82(C), pages 79-100.
    15. Akio Kawasaki, 2017. "Airport Privatization Competition Including Domestic Airline Markets," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 29(1), pages 2-17, March.
    16. Akio Kawasaki, 2013. "Airport privatization competition including domestic airline networks," Working Papers e064, Tokyo Center for Economic Research.
    17. Bringmann, Katja & De Langhe, Katrien & Kupfer, Franziska & Sys, Christa & Van de Voorde, Eddy & Vanelslander, Thierry, 2018. "Cooperation between airports: A focus on the financial intertwinement of European airport operators," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 59-71.
    18. Bettini, Humberto F.A.J. & Oliveira, Alessandro V.M., 2016. "Two-sided platforms in airport privatization," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 262-278.
    19. Graham, Prof Anne, 2020. "Airport privatisation: A successful journey?," Journal of Air Transport Management, Elsevier, vol. 89(C).
    20. Lin, Ming Hsin & Mantin, Benny, 2015. "Airport privatization in international inter-hub and spoke networks," Economics of Transportation, Elsevier, vol. 4(4), pages 189-199.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jaitra:v:80:y:2019:i:c:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-air-transport-management/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.