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(De)regulation of the European Ramp Handling Market – Lessons to Be Learned from an Institutional Perspective?

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Author Info
Johannes Fuhr () (Workgroup for Infrastructure Policy (WIP), Technische Universität Berlin)

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Abstract

Ten years have passed since the European Commission obliged its member states to open their national handling markets to competition. This paper analyzes whether the policy has allowed airlines to design efficient contractual and organizational solutions with their ramp handling suppliers. Applying transaction cost economics as the lens of analysis, we propose that the award of temporary limited operating licenses to new entrants results in inferior economic performance. The presented econometric results on the duration of 42 ramp handling contracts and a qualitative case study on the award practices at German airports are largely supportive of this proposition.

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File URL: http://www.cni.tu-berlin.de/fileadmin/documents/RePEc/cni/working_paper/fuhr_deregulation_ramp_handling_cni_wp_no_2006-08.pdf
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Publisher Info
Paper provided by Center for Network Industries and Infrastructure (CNI) in its series Working Papers with number 2006-08.

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Length: 46 pages
Date of creation: 2006
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Handle: RePEc:cni:wpaper:2006-08

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Web page: http://www.cni.tu-berlin.de
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Related research
Keywords: Transaction cost contract deregulation air transport ramp handling

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Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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  1. Masten, Scott E & Meehan, James W, Jr & Snyder, Edward A, 1991. "The Costs of Organization," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(1), pages 1-25, Spring.
  2. Riordan, Michael H. & Williamson, Oliver E., 1985. "Asset specificity and economic organization," International Journal of Industrial Organization, Elsevier, vol. 3(4), pages 365-378, December. [Downloadable!] (restricted)
  3. Joskow, Paul L, 1985. "Vertical Integration and Long-term Contracts: The Case of Coal-burning Electric Generating Plants," Journal of Law, Economics and Organization, Oxford University Press, vol. 1(1), pages 33-80, Spring.
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  4. Keith J. Crocker & Kenneth J. Reynolds, 1993. "The Efficiency of Incomplete Contracts: An Empirical Analysis of Air Force Engine Procurement," RAND Journal of Economics, The RAND Corporation, vol. 24(1), pages 126-146, Spring. [Downloadable!] (restricted)
  5. Crocker, Keith J & Masten, Scott E, 1996. "Regulation and Administered Contracts Revisited: Lessons from Transaction-Cost Economics for Public Utility Regulation," Journal of Regulatory Economics, Springer, vol. 9(1), pages 5-39, January.
  6. Johannes Fuhr & Thorsten Beckers, 2006. "Vertical Governance between Airlines and Airports - A Transaction Cost Analysis," Review of Network Economics, Concept Economics, vol. 5(4), pages 386-412, December. [Downloadable!]
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  7. Yvrande-Billon, Anne & Menard, Claude, 2005. "Institutional constraints and organizational changes: the case of the British rail reform," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 675-699, April. [Downloadable!] (restricted)
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