IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/20150049.html
   My bibliography  Save this paper

Single-Till versus Dual-Till Regulation of Airports

Author

Listed:
  • Achim I. Czerny

    (VU University Amsterdam, the Netherlands)

  • Anmin Zhang

    (University of British Columbia, Canada)

Abstract

Most airports operate under public ownership, while some are privatized and economically regulated. Only a few airports are privately owned and experience little or no ex-ante regulation of airport charges. On the other hand, airports nowadays earn as much revenue from transport-related activities as from commercially-oriented business activities. Taken together, these two observations lead to a natural question: How to optimally integrate profits derived from commercial activities into the regulation of airport infrastructure charges? This question is addressed in this paper. We discuss basic issues that are relevant for the design of regulatory regimes for airports and how these issues can be tackled by using airport profits derived from commercial activities for infrastructure cost recovery. The main insights are summarized at the end of each section and then are further summarized in the conclusions section.

Suggested Citation

  • Achim I. Czerny & Anmin Zhang, 2015. "Single-Till versus Dual-Till Regulation of Airports," Tinbergen Institute Discussion Papers 15-049/VIII, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20150049
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/15049.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David Starkie, 2001. "Reforming UK Airport Regulation," Journal of Transport Economics and Policy, University of Bath, vol. 35(1), pages 119-135, January.
    2. 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.
    3. Toshihiro Matsumura & Noriaki Matsushima, 2012. "Airport Privatization And International Competition," The Japanese Economic Review, Japanese Economic Association, vol. 63(4), pages 431-450, December.
    4. Moshe Givoni & Frédéric Dobruszkes, 2013. "A Review of Ex-Post Evidence for Mode Substitution and Induced Demand Following the Introduction of High-Speed Rail," ULB Institutional Repository 2013/152140, ULB -- Universite Libre de Bruxelles.
    5. Forsyth, Peter, 2003. "Regulation under stress: developments in Australian airport policy," Journal of Air Transport Management, Elsevier, vol. 9(1), pages 25-35.
    6. Zhang, Anming & Czerny, Achim I., 2012. "Airports and airlines economics and policy: An interpretive review of recent research," Economics of Transportation, Elsevier, vol. 1(1), pages 15-34.
    7. Volodymyr Bilotkach & Joseph Clougherty & Juergen Mueller & Anming Zhang, 2012. "Regulation, privatization, and airport charges: panel data evidence from European airports," Journal of Regulatory Economics, Springer, vol. 42(1), pages 73-94, August.
    8. Severin Borenstein, 1992. "The Evolution of U.S. Airline Competition," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 45-73, Spring.
    9. Polk, Andreas & Bilotkach, Volodymyr, 2013. "The assessment of market power of hub airports," Transport Policy, Elsevier, vol. 29(C), pages 29-37.
    10. Hangjun Yang & Anming Zhang, 2012. "Impact of Regulation on Transport Infrastructure Capacity and Service Quality," Journal of Transport Economics and Policy, University of Bath, vol. 46(3), pages 415-430, September.
    11. Ricardo Flores‐Fillol & Alberto Iozzi & Tommaso Valletti, 2018. "Platform pricing and consumer foresight: The case of airports," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(4), pages 705-725, October.
    12. Jiang, Changmin & Zhang, Anming, 2014. "Effects of high-speed rail and airline cooperation under hub airport capacity constraint," Transportation Research Part B: Methodological, Elsevier, vol. 60(C), pages 33-49.
    13. Hangjun Yang & Anming Zhang, 2011. "Price-cap regulation of congested airports," Journal of Regulatory Economics, Springer, vol. 39(3), pages 293-312, June.
    14. Ian Jones & Ivan Viehoff & Phillipa Marks, 1993. "The economics of airport slots," Fiscal Studies, Institute for Fiscal Studies, vol. 14(4), pages 37-57, November.
    15. Tiziana D'Alfonso & Changmin Jiang & Yulai Wan, 2013. "Airport Pricing, Concession Revenues and Passenger Types," Journal of Transport Economics and Policy, University of Bath, vol. 47(1), pages 71-89, January.
    16. 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.
    17. Moshe Givoni & Frédéric Dobruszkes, 2013. "A Review of Ex-Post Evidence for Mode Substitution and Induced Demand Following the Introduction of High-Speed Rail," Transport Reviews, Taylor & Francis Journals, vol. 33(6), pages 720-742, November.
    18. Bracaglia, Valentina & D׳Alfonso, Tiziana & Nastasi, Alberto, 2014. "Competition between multiproduct airports," Economics of Transportation, Elsevier, vol. 3(4), pages 270-281.
    19. Lin, Ming Hsin, 2013. "Airport privatization in congested hub–spoke networks," Transportation Research Part B: Methodological, Elsevier, vol. 54(C), pages 51-67.
    20. 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.
    21. Achim Czerny, 2006. "Price-cap Regulation of Airports: Single-till Versus Dual-till," Journal of Regulatory Economics, Springer, vol. 30(1), pages 85-97, July.
    22. 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.
    23. Zhang, Anming & Zhang, Yimin, 1997. "Concession revenue and optimal airport pricing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 33(4), pages 287-296, December.
    24. Brueckner, Jan K., 2009. "Price vs. quantity-based approaches to airport congestion management," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 681-690, June.
    25. 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.
    26. Forsyth, Peter, 2007. "The impacts of emerging aviation trends on airport infrastructure," Journal of Air Transport Management, Elsevier, vol. 13(1), pages 45-52.
    27. Se-il Mun & Yusuke Teraji, 2012. "The Organisation of Multiple Airports in a Metropolitan Area," Journal of Transport Economics and Policy, University of Bath, vol. 46(2), pages 221-237, May.
    28. Czerny, Achim I., 2013. "Public versus private airport behavior when concession revenues exist," Economics of Transportation, Elsevier, vol. 2(1), pages 38-46.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kenneth Button, 2020. "Studying the empirical implications of the liberalization of airport markets," Competition and Regulation in Network Industries, , vol. 21(3), pages 223-243, September.
    2. Tiziana D'Alfonso & Valentina Bracaglia & Yulai Wan, 2015. "Airport cities and multiproduct pricing," DIAG Technical Reports 2015-14, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kidokoro, Yukihiro & Lin, Ming Hsin & Zhang, Anming, 2016. "A general-equilibrium analysis of airport pricing, capacity, and regulation," Journal of Urban Economics, Elsevier, vol. 96(C), pages 142-155.
    2. Kidokoro, Yukihiro & Zhang, Anming, 2018. "Airport congestion pricing and cost recovery with side business," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 222-236.
    3. Zhang, Anming & Czerny, Achim I., 2012. "Airports and airlines economics and policy: An interpretive review of recent research," Economics of Transportation, Elsevier, vol. 1(1), pages 15-34.
    4. Czerny, Achim I. & Shi, Zijun & Zhang, Anming, 2016. "Can market power be controlled by regulation of core prices alone? An empirical analysis of airport demand and car rental price," Transportation Research Part A: Policy and Practice, Elsevier, vol. 91(C), pages 260-272.
    5. Achim I. Czerny & Zijun Shi & Anming Zhang, 2015. "Can market power be controlled by regulation of core prices alone?: An empirical analysis of airport demand and car rental price," Tinbergen Institute Discussion Papers 15-041/VIII, Tinbergen Institute.
    6. Choo, Yap Yin & Corbo, Leonardo & Wang, Kun, 2018. "Joint impact of airline market structure and airport ownership on airport market power and profit margin," Transport Policy, Elsevier, vol. 72(C), pages 67-78.
    7. Czerny, Achim I. & Zhang, Hanxiang, 2020. "Rivalry between airport ancillary and city-center supplies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    8. Bracaglia, Valentina & D׳Alfonso, Tiziana & Nastasi, Alberto, 2014. "Competition between multiproduct airports," Economics of Transportation, Elsevier, vol. 3(4), pages 270-281.
    9. Hangjun Yang & Anming Zhang, 2011. "Price-cap regulation of congested airports," Journal of Regulatory Economics, Springer, vol. 39(3), pages 293-312, June.
    10. Jiang, Changmin & Zhang, Anming, 2015. "Airport congestion pricing and terminal investment: Effects of terminal congestion, passenger types, and concessionsAuthor-Name: Wan, Yulai," Transportation Research Part B: Methodological, Elsevier, vol. 82(C), pages 91-113.
    11. Kidokoro, Yukihiro & Zhang, Anming, 2022. "Airport cities and social welfare," Transportation Research Part B: Methodological, Elsevier, vol. 158(C), pages 187-209.
    12. Xiao, Yibin & Fu, Xiaowen & Zhang, Anming, 2016. "Airport capacity choice under airport-airline vertical arrangements," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 298-309.
    13. Yang, Hangjun & Fu, Xiaowen, 2015. "A comparison of price-cap and light-handed airport regulation with demand uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 73(C), pages 122-132.
    14. Xiao, Yibin & Fu, Xiaowen & Zhang, Anming, 2013. "Demand uncertainty and airport capacity choice," Transportation Research Part B: Methodological, Elsevier, vol. 57(C), pages 91-104.
    15. repec:aeg:report:2014-4 is not listed on IDEAS
    16. Valentina Bracaglia & Tiziana D'Alfonso & Alberto Nastasi, 2014. "Multiproduct airport competition and e-commerce strategies," DIAG Technical Reports 2014-04, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    17. Tiziana D'Alfonso & Valentina Bracaglia & Yulai Wan, 2015. "Airport cities and multiproduct pricing," DIAG Technical Reports 2015-14, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    18. Volodymyr Bilotkach & Joseph Clougherty & Juergen Mueller & Anming Zhang, 2012. "Regulation, privatization, and airport charges: panel data evidence from European airports," Journal of Regulatory Economics, Springer, vol. 42(1), pages 73-94, August.
    19. Noruzoliaee, Mohamadhossein & Zou, Bo & Zhang, Anming, 2015. "Airport partial and full privatization in a multi-airport region: Focus on pricing and capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 45-60.
    20. Achim I. Czerny, 2012. "Public Versus Private Airport Behavior When Concession Revenues Exist," WHU Working Paper Series - Economics Group 12-01, WHU - Otto Beisheim School of Management.
    21. Sheng, Dian & Li, Zhi-Chun & Xiao, Yi-bin & Fu, Xiaowen, 2015. "Slot auction in an airport network with demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 82(C), pages 79-100.

    More about this item

    Keywords

    Airport; monopoly; regulation; single till; dual till;
    All these keywords.

    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tin:wpaper:20150049. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.