Airport incentive programs: A European perspective
AbstractIn this paper we investigate current pricing practices at the 200 biggest airports in the European Union. Our analysis shows that airport incentive programs are, in general, a common tool of airport pricing as they are used at one third of all airports. We also find evidence on the presence of bilateral agreements between airport operators or regional authorities on one side and airlines on the other side which serve as a substitute for published incentive programs. Geographically, usage of the different tools varies substantially between different EU countries. A detailed assessment of the incentive schemes offered at German airports within our broader European sample reveals that the average level of landing and take-off, parking and positioning and passenger charges is generally reduced by more than 10%, at smaller airports even by up to 44%. Given the usually low profit margin of airlines and that airport charges account for up to 10% of total operating costs, these incentives can have an important influence on the economic viability of a route. Moreover, in an airline's multi-criteria-based assessment of potential market entries or route expansions, such incentive schemes might compensate selected weaknesses of an airport's strategic posture. --
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Bibliographic InfoPaper provided by University of Cologne, Department of Business Policy and Logistics in its series Working Paper Series with number 107.
Date of creation: 2011
Date of revision:
Air Transport; Airports; Pricing; Management; Regulation;
Other versions of this item:
- Robert Malina & Sascha Albers & Nathalie Kroll, 2012. "Airport Incentive Programmes: A European Perspective," Transport Reviews, Taylor and Francis Journals, vol. 32(4), pages 435-453, April.
- NEP-ALL-2012-07-29 (All new papers)
- NEP-CWA-2012-07-29 (Central & Western Asia)
- NEP-TRE-2012-07-29 (Transport Economics)
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