Public versus private airport behavior when concession revenues exist
The share of revenues from airport concession services among airports worldwide has reached an average level of roughly 50% today. Since concessions may exert downward pressure on the private aeronautical charge, the question is whether price regulation of private airports has become obsolete. The recent literature on airport concessions suggests that private airport pricing may still be excessive from the social viewpoint. This paper complements this literature by considering (i) two distinct types of concession services called retail services and car rentals, (ii) two-sided demand complementarity between aeronautical and concession services, and (iii) specific airport concession services that are welfare neutral in the sense that the surplus derived from concession services is independent of traveling activities. In this setting, airport price regulation can become obsolete, but concession services of the car-rental type can also increase the benefits of airport price regulation.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Graham, Anne, 2009. "How important are commercial revenues to today's airports?," Journal of Air Transport Management, Elsevier, vol. 15(3), pages 106-111.
- David Starkie, 2001. "Reforming UK Airport Regulation," Journal of Transport Economics and Policy, University of Bath, vol. 35(1), pages 119-135, January.
- Pels, Eric & Verhoef, Erik T., 2004.
"The economics of airport congestion pricing,"
Journal of Urban Economics,
Elsevier, vol. 55(2), pages 257-277, March.
- Eric Pels & Erik Verhoef, 2003. "The Economics of Airport Congestion Pricing," Tinbergen Institute Discussion Papers 03-083/3, Tinbergen Institute.
- Forsyth, Peter, 2004. "Locational and monopoly rents at airports: creating them and shifting them," Journal of Air Transport Management, Elsevier, vol. 10(1), pages 51-60.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716.
- Czerny, Achim I. & Zhang, Anming, 2011. "Airport congestion pricing and passenger types," Transportation Research Part B: Methodological, Elsevier, vol. 45(3), pages 595-604, March.
- Brueckner, Jan K. & Van Dender, Kurt, 2008. "Atomistic congestion tolls at concentrated airports? Seeking a unified view in the internalization debate," Journal of Urban Economics, Elsevier, vol. 64(2), pages 288-295, September.
- Jan K. Brueckner & Kurt Van Dender, 2007. "Atomistic Congestion Tolls at Concentrated Airports? Seeking a Unified View in the Internalization Debate," CESifo Working Paper Series 2033, CESifo Group Munich.
- Xiaowen Fu & Anming Zhang, 2010. "Effects of Airport Concession Revenue Sharing on Airline Competition and Social Welfare," Journal of Transport Economics and Policy, University of Bath, vol. 44(2), pages 119-138, May.
- Zhang, Anming & Zhang, Yimin, 2003. "Airport charges and capacity expansion: effects of concessions and privatization," Journal of Urban Economics, Elsevier, vol. 53(1), pages 54-75, January.
- Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, vol. 63(2), pages 327-370, March.
- Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2003. "Access to and competition between airports: a case study for the San Francisco Bay area," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(1), pages 71-83, January.
- Van Dender, Kurt, 2007. "Determinants of fares and operating revenues at US airports," Journal of Urban Economics, Elsevier, vol. 62(2), pages 317-336, September.
- Hangjun Yang & Anming Zhang, 2011. "Price-cap regulation of congested airports," Journal of Regulatory Economics, Springer, vol. 39(3), pages 293-312, June.
- Lu, Ching-Chyuan & Pagliari, Romano I., 2004. "Evaluating the potential impact of alternative airport pricing approaches on social welfare," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 40(1), pages 1-17, January.
- Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
- Christopher Mayer & Todd Sinai, 2003. "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil," American Economic Review, American Economic Association, vol. 93(4), pages 1194-1215, September.
- Tae Hoon Oum & Anming Zhang & Yimin Zhang, 2004. "Alternative Forms of Economic Regulation and their Efficiency Implications for Airports," Journal of Transport Economics and Policy, University of Bath, vol. 38(2), pages 217-246, May.
- Zhang, Anming & Zhang, Yimin, 2010. "Airport capacity and congestion pricing with both aeronautical and commercial operations," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 404-413, March.
- Morrison, Steven A., 1987. "The equity and efficiency of runway pricing," Journal of Public Economics, Elsevier, vol. 34(1), pages 45-60, October.
- Daniel, Joseph I. & Harback, Katherine Thomas, 2008. "(When) Do hub airlines internalize their self-imposed congestion delays?," Journal of Urban Economics, Elsevier, vol. 63(2), pages 583-612, March.
- Joseph I. Daniel & Katherine Thomas Harback, 2005. "(When) Do Hub Airlines Internalize Their Self-Imposed Congestion Delays?," Working Papers 05-08, University of Delaware, Department of Economics.
- James A. Brander & Anming Zhang, 1990. "Market Conduct in the Airline Industry: An Empirical Investigation," RAND Journal of Economics, The RAND Corporation, vol. 21(4), pages 567-583, Winter.
- Zhang, Anming & Zhang, Yimin, 2006. "Airport capacity and congestion when carriers have market power," Journal of Urban Economics, Elsevier, vol. 60(2), pages 229-247, September.
- Steven A. Morrison & Clifford Winston, 2007. "Another Look at Airport Congestion Pricing," American Economic Review, American Economic Association, vol. 97(5), pages 1970-1977, December.
- M. Geuens & D. Vantomme & M. Brengman, 2003. "Developing a typology of airport shoppers," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/206, Ghent University, Faculty of Economics and Business Administration. Full references (including those not matched with items on IDEAS)