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Access pricing regulation in the U.S. domestic aviation industry

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  • Douglas C. Turner

    (University of Florida)

Abstract

I examine how regulatory preferences in setting a federal price cap on passenger facility charges (PFCs), the variable portion of an access price in the U.S. domestic aviation industry, have evolved over time. PFCs are a per-passenger charge paid by airlines to airports. Despite the fact that the PFC cap has declined in real terms since 2001, I find that regulators have given greater importance to airports since the turn of the century. There are a number of recent proposals to increase the price cap and, at a minimum, restore the cap to 2001 real levels. I find that a price cap decrease would instead be necessary to maintain the preferences of regulators in 2001.

Suggested Citation

  • Douglas C. Turner, 2022. "Access pricing regulation in the U.S. domestic aviation industry," Journal of Regulatory Economics, Springer, vol. 62(1), pages 24-46, December.
    • Handle: RePEc:kap:regeco:v:62:y:2022:i:1:d:10.1007_s11149-022-09453-8
    DOI: 10.1007/s11149-022-09453-8
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    More about this item

    Keywords

    Access pricing; Airports; Regulation; Regulatory preference;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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