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Allocating runway costs using a user-pay and average-cost approach: application to Taiwanese airports

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Listed:
  • Jin-Ru Yen
  • I-Feng Chang
  • Chi-Hung Wu

Abstract

This paper develops a mechanism to allocate the costs of providing landing services at airports to different types of aircraft. Costs are classified into assignable and non-assignable items. The former is allocated by the user-pay principle, using traffic level as a key determining factor, and the latter is allocated by an average-cost approach. Land costs are included in the non-assignable category under some scenarios for analysis. The mechanism is validated at two major Taiwanese airports, Taipei Songshan Airport (TSA) and Taiwan Taoyuan International Airport (TPE), both are located in the Taipei Metropolitan area. Research results indicate that landing charges based on these allocated costs reflect the true costs of providing takeoff and landing services better than the weight-based charges. For example, the greatest landing fees charged to B747-400 at many airports based on the maximum takeoff weight is not supported by the user-pay principle. The results also provide a guideline to decide the minimum charge of each landing. Hence, it is believed that the mechanism has the potential to be applied to other airports worldwide.

Suggested Citation

  • Jin-Ru Yen & I-Feng Chang & Chi-Hung Wu, 2016. "Allocating runway costs using a user-pay and average-cost approach: application to Taiwanese airports," International Journal of Aviation Management, Inderscience Enterprises Ltd, vol. 3(2/3), pages 172-188.
  • Handle: RePEc:ids:ijavim:v:3:y:2016:i:2/3:p:172-188
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