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Passenger facility charge vs. airport improvement program funds: A dynamic network DEA analysis for U.S. airport financing

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  • Chang, Young-Tae
  • (Kevin) Park, Hyosoo
  • Zou, Bo
  • Kafle, Nabin

Abstract

Passenger Facility Charge (PFC) and the Airport Improvement Program (AIP) are two major sources to finance U.S. airports. This paper develops a novel dynamic network DEA framework to investigate the substitutability between PFC and AIP funds. We find that the studied U.S. airports can substitute PFC for 8–35% of the current AIP funds and contribute significantly to the proposed plan of the US congress to cut AIP funding. In addition, the amount of PFC-for-AIP funds substitution negatively correlates with the productive efficiency of airports. The findings send an important message for future policy reforms on U.S. airport financing.

Suggested Citation

  • Chang, Young-Tae & (Kevin) Park, Hyosoo & Zou, Bo & Kafle, Nabin, 2016. "Passenger facility charge vs. airport improvement program funds: A dynamic network DEA analysis for U.S. airport financing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 88(C), pages 76-93.
    • Handle: RePEc:eee:transe:v:88:y:2016:i:c:p:76-93
    DOI: 10.1016/j.tre.2016.02.001
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    6. Christopher L. Atkinson, 2020. "The Federal Aviation Administration Airport Improvement Program: Who Benefits?," Public Organization Review, Springer, vol. 20(4), pages 789-805, December.
    7. Shi‐Xiao Wang & Wen‐Min Lu & Shiu‐Wan Hung, 2020. "Improving innovation efficiency of emerging economies: The role of manufacturing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 503-519, June.
    8. Li, Max Z. & Ryerson, Megan S., 2019. "Reviewing the DATAS of aviation research data: Diversity, availability, tractability, applicability, and sources," Journal of Air Transport Management, Elsevier, vol. 75(C), pages 111-130.
    9. Yu, Ming-Miin & Rakshit, Ipsita, 2023. "Assessing the dynamic efficiency and technology gap of airports under different ownerships: A union dynamic NDEA approach," Omega, Elsevier, vol. 119(C).
    10. Yu, Ming-Miin & Chen, Li-Hsueh & Chiang, Hui, 2017. "The effects of alliances and size on airlines’ dynamic operational performance," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 197-214.
    11. Sergi, S. Bruno & D’Aleo, Vittorio & Arbolino, Roberta & Carlucci, Fabio & Barilla, David & Ioppolo, Giuseppe, 2020. "Evaluation of the Italian transport infrastructures: A technical and economic efficiency analysis," Land Use Policy, Elsevier, vol. 99(C).
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