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Joint impact of competition, ownership form and economic regulation on airport performance and pricing

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  • Adler, Nicole
  • Liebert, Vanessa

Abstract

The combined impact of ownership form, economic regulation and competition on airport performance is analyzed using data envelopment analysis to measure cost efficiency in the first stage and regression analysis to measure the impact of the environment in the second stage. The empirical results of an analysis of European and Australian airports over a 10year timeframe reveal that under relatively non-competitive conditions, public airports operate less cost efficiently than fully private airports. Irrespective of ownership form, regulation is necessary to emulate competitive forces thus pushing airport management towards cost efficiency and reasonable pricing policies. Under potential regional or hub competition, economic regulation inhibits airports of any ownership form from operating and pricing efficiently. Although public and fully private airports operate equally efficiently in a competitive setting, private airports still set higher aeronautical charges. Furthermore, mixed ownership forms with a majority public holding are neither cost efficient nor low price, irrespective of the level of competition.

Suggested Citation

  • Adler, Nicole & Liebert, Vanessa, 2014. "Joint impact of competition, ownership form and economic regulation on airport performance and pricing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 64(C), pages 92-109.
  • Handle: RePEc:eee:transa:v:64:y:2014:i:c:p:92-109
    DOI: 10.1016/j.tra.2014.03.008
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    References listed on IDEAS

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    Cited by:

    1. D’Alfonso, Tiziana & Daraio, Cinzia & Nastasi, Alberto, 2015. "Competition and efficiency in the Italian airport system: new insights from a conditional nonparametric frontier analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 80(C), pages 20-38.
    2. Liu, Dan, 2016. "Measuring aeronautical service efficiency and commercial service efficiency of East Asia airport companies: An application of Network Data Envelopment Analysis," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 11-22.
    3. Cahill, Catríona & Palcic, Dónal & Reeves, Eoin, 2017. "Commercialisation and airport performance: The case of Ireland's DAA," Journal of Air Transport Management, Elsevier, vol. 59(C), pages 155-163.
    4. Adler, Nicole & Forsyth, Peter & Mueller, Juergen & Niemeier, Hans-Martin, 2015. "An economic assessment of airport incentive regulation," Transport Policy, Elsevier, vol. 41(C), pages 5-15.
    5. Randrianarisoa, Laingo Manitra & Bolduc, Denis & Choo, Yap Yin & Oum, Tae Hoon & Yan, Jia, 2015. "Effects of corruption on efficiency of the European airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 79(C), pages 65-83.
    6. Chang, Young-Tae & (Kevin) Park, Hyosoo & Zou, Bo & Kafle, Nabin, 2016. "Passenger facility charge vs. airport improvement program funds: A dynamic network DEA analysis for U.S. airport financing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 88(C), pages 76-93.
    7. Kutlu, Levent & McCarthy, Patrick, 2016. "US airport ownership, efficiency, and heterogeneity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 89(C), pages 117-132.
    8. Pavlyuk, Dmitry, 2016. "Implication of spatial heterogeneity for airports' efficiency estimation," Research in Transportation Economics, Elsevier, vol. 56(C), pages 15-24.
    9. repec:eee:juipol:v:50:y:2018:i:c:p:175-193 is not listed on IDEAS
    10. Zou, Bo & Kafle, Nabin & Chang, Young-Tae & Park, Kevin, 2015. "US airport financial reform and its implications for airport efficiency: An exploratory investigation," Journal of Air Transport Management, Elsevier, vol. 47(C), pages 66-78.

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