Advanced Search
MyIDEAS: Login to save this article or follow this journal

The dilemma between capacity expansions and multi-airport systems: Empirical evidence from the industry's cost function

Contents:

Author Info

  • Martín, Juan Carlos
  • Voltes-Dorta, Augusto
Registered author(s):

    Abstract

    This paper explores the problematic of airport capacity expansions from the perspective of the airport financial management, using the operating costs as the variable of interest. The objective is to provide empirical evidence on the financial advantages of expanding capacity against the operation of multi-airport systems (MAS) under the presence of significant returns to scale in airport operations. This is done by comparing the actual operating costs of the MAS with the predicted costs that correspond to the aggregated level of output and input prices. Predictions are obtained from a multi-output specification of the industry's cost function, estimated with a broad database of international airports. The results indicate the presence of non-exhausted scale economies at the current levels of production. Hence, the atomization of air traffic always increases operating costs at a system level. In the last section, the degree of economic inefficiency of five European MAS is calculated. These results also provide revealing conclusions about the size of the industry's minimum efficient scale. Furthermore, the use of data on American MAS allows us to separate the inefficiency costs derived from the atomization of air traffic from those related to the individual airports' inefficient behavior.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/pii/S1366554510001134
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Transportation Research Part E: Logistics and Transportation Review.

    Volume (Year): 47 (2011)
    Issue (Month): 3 (May)
    Pages: 382-389

    as in new window
    Handle: RePEc:eee:transe:v:47:y:2011:i:3:p:382-389

    Contact details of provider:
    Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description

    Order Information:
    Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/bibliographic
    Web: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/bibliographic

    Related research

    Keywords: Airports' cost function Scale economies Multi-airport system Stochastic frontier;

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

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

    Cited by:
    1. De Nicola, Arianna & Gitto, Simone & Mancuso, Paolo, 2013. "Airport quality and productivity changes: A Malmquist index decomposition assessment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 58(C), pages 67-75.
    2. Voltes-Dorta, Augusto & Lei, Zheng, 2013. "The impact of airline differentiation on marginal cost pricing at UK airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 55(C), pages 72-88.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:47:y:2011:i:3:p:382-389. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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