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Non-aviation revenues and their implications for airport regulation

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  • Kratzsch, Uwe
  • Sieg, Gernot

Abstract

This paper analyzes a non-congested private airport that possesses market power in providing aeronautical services. We find that the profit-maximizing landing fee decreases in the degree of complementarity of aviation and non-aviation. Furthermore, our model implies that airports will not take advantage of their market power if non-aviation revenues, or the degree of complementarity of aviation and non-aviation, exceed a critical threshold. In this case, a dual-till regulation will be unnecessary. A single-till regulation, on the other hand, will always result in lower landing fees than laissez-faire.

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Bibliographic Info

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

Volume (Year): 47 (2011)
Issue (Month): 5 (September)
Pages: 755-763

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Handle: RePEc:eee:transe:v:47:y:2011:i:5:p:755-763

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Related research

Keywords: Airport pricing Airport regulation Dual-till Landing fee Non-aviation revenue Single-till;

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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. Yeo, Gi-Tae & Wang, Ying & Chou, Chien-Chang, 2013. "Evaluating the competitiveness of the aerotropolises in East Asia," Journal of Air Transport Management, Elsevier, vol. 32(C), pages 24-31.
  3. repec:aeg:report:2014-4 is not listed on IDEAS
  4. Kratzsch, Uwe & Sieg, Gernot, 2012. "No need to regulate airports with predominantly non-aeronautical revenues," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 52, pages 7.

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