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Airport charges and marginal costs for Spanish airports before the process of partial privatization

Author

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  • Núñez-Sánchez, Ramón
  • Hidalgo-Gallego, Soraya
  • Martínez-San Román, Valeriano

Abstract

Airport pricing is considered as one of the most relevant issues for policymakers. According transport policy, pricing schemes should be at least partially based on marginal costs. This article aims at comparing the most relevant aeronautical airport charges with their corresponding marginal costs for the Spanish airports in the period before the partial privatization process. To that end, we have built very detailed airport charge variables, and then, have estimated a flexible short-run variable cost function system using a panel of thirty-five airports over a 6-year period. The results show that the evolution of aeronautical airport charges does not follow the trend of marginal costs. Moreover, these charges are set above the shortrun marginal costs with the exception of the smallest and insular airports. Finally, we find the existence of non-neutral technological change and excess of capacity for the Spanish airports.

Suggested Citation

  • Núñez-Sánchez, Ramón & Hidalgo-Gallego, Soraya & Martínez-San Román, Valeriano, 2019. "Airport charges and marginal costs for Spanish airports before the process of partial privatization," MPRA Paper 92973, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92973
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    References listed on IDEAS

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    1. Czerny, Achim I. & Zhang, Anming, 2015. "How to mix per-flight and per-passenger based airport charges," Transportation Research Part A: Policy and Practice, Elsevier, vol. 71(C), pages 77-95.
    2. Voltes-Dorta, Augusto & Lei, Zheng, 2013. "The impact of airline differentiation on marginal cost pricing at UK airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 55(C), pages 72-88.
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    More about this item

    Keywords

    airport pricing; cost function; airport regulation; Spanish airports;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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