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Factors Explaining Charges in European Airports: Competition, Market Size, Private Ownership and Regulation

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Author Info

  • Germá Bel
  • Xavier Fageda

Abstract

This paper examines factors determining airport charges. Using data for 100 large airports in Europe, we find that they charge higher prices when they move more passengers. Additionally, competition from other transport modes and nearby airports imposes some discipline on the pricing behavior of airports. Low-cost carriers and airlines with a high market share seem to have a stronger countervailing power. We also find that private airports not regulated charge higher prices than public or regulated airports. Finally, the regulation mechanism does not seem to influence substantially the level of airport charges.

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File URL: http://documentos.fedea.net/pubs/dt/2009/dt-2009-31.pdf
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Bibliographic Info

Paper provided by FEDEA in its series Working Papers with number 2009-31.

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Date of creation: Nov 2009
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Handle: RePEc:fda:fdaddt:2009-31

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Web page: http://www.fedea.net

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References

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  1. David Starkie, 2001. "Reforming UK Airport Regulation," Journal of Transport Economics and Policy, London School of Economics and University of Bath, London School of Economics and University of Bath, vol. 35(1), pages 119-135, January.
  2. Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2003. "Inefficiencies and scale economies of European airport operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, Elsevier, vol. 39(5), pages 341-361, September.
  3. Severin Borenstein & Nancy L. Rose, 2007. "How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry," NBER Working Papers 13452, National Bureau of Economic Research, Inc.
  4. Germà Bel & Xavier Fageda, 2005. "Preventing competition because of “solidarity”: Rhetoric and reality of airport investments in Spain," Public Economics, EconWPA 0511012, EconWPA.
  5. Basso, Leonardo J., 2008. "Airport deregulation: Effects on pricing and capacity," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 26(4), pages 1015-1031, July.
  6. Marques, Rui Cunha & Brochado, Ana, 2008. "Airport regulation in Europe: Is there need for a European Observatory?," Transport Policy, Elsevier, vol. 15(3), pages 163-172, May.
  7. Bazargan, Massoud & Vasigh, Bijan, 2003. "Size versus efficiency: a case study of US commercial airports," Journal of Air Transport Management, Elsevier, Elsevier, vol. 9(3), pages 187-193.
  8. Xiaowen Fu & Mark Lijesen & Tae H. Oum, 2006. "An Analysis of Airport Pricing and Regulation in the Presence of Competition Between Full Service Airlines and Low Cost Carriers," Journal of Transport Economics and Policy, London School of Economics and University of Bath, London School of Economics and University of Bath, vol. 40(3), pages 425-447, September.
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Cited by:
  1. Bilotkach, Volodymyr & Clougherty, Joseph A. & Mueller, Juergen & Zhang, Anming, 2011. "Regulation, Privatization, and Airport Charges: Panel Data Evidence from European Airports," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8618, C.E.P.R. Discussion Papers.
  2. Hangjun Yang & Anming Zhang, 2011. "Price-cap regulation of congested airports," Journal of Regulatory Economics, Springer, Springer, vol. 39(3), pages 293-312, June.

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