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The Cost Structure of the UK Airport Industry

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  • Anna Bottasso
  • Maurizio Conti

Abstract

In this paper we analyse the cost structure of the UK airport industry by estimating a variable cost function for the period 1994-2005. Overall results suggest that average costs decrease until passenger traffic reaches 5 million, remain constant over the range between 5 million and 14 million passengers, and afterwards start to increase. Moreover, we find evidence consistent with the existence of overcapitalisation for the largest regulated airports. Finally, private airports seem to be characterised by lower costs, although cost differentials associated with ownership status shrank over time. The main results are robust to unobserved heterogeneity and to endogeneity biases. © 2012 LSE and the University of Bath

Suggested Citation

  • Anna Bottasso & Maurizio Conti, 2012. "The Cost Structure of the UK Airport Industry," Journal of Transport Economics and Policy, University of Bath, vol. 46(3), pages 313-332, September.
  • Handle: RePEc:tpe:jtecpo:v:46:y:2012:i:3:p:313-332
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    Cited by:

    1. 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.
    2. Hidalgo-Gallego, Soraya & Núñez-Sánchez, Ramón & Coto-Millán, Pablo, 2017. "Spatial non-price competition in port infrastructure services," MPRA Paper 80417, University Library of Munich, Germany.
    3. repec:kap:regeco:v:52:y:2017:i:1:d:10.1007_s11149-017-9332-z is not listed on IDEAS
    4. 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.
    5. repec:eee:transa:v:101:y:2017:i:c:p:61-72 is not listed on IDEAS

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