Inverting the regulatory rules? Optimizing airport regulation to account for commercial revenues
This paper analyzes the role of commercial revenues in today's airport regulatory system. We find that the current regulatory regime only partially achieves core aims such as welfare maximization. After highlighting instances in which airport price regulation is not economically justified, we explore the potential for airports to exercise market power in the commercial sector. In certain circumstances, we advocate the introduction of an 'inverted' dual till system under which commercial as opposed to aviation revenues are the focus of price regulation. The suitability of such a system varies from airport to airport, however, depending on various factors, such as the airport's competitive environment and the presence of capacity constraints.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: Mommsenstraße 13, 01062 Dresden|
Web page: http://tu-dresden.de/die_tu_dresden/fakultaeten/vkw/iwv
More information through EDIRC
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.:
- 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.
- Braeutigam, Ronald R & Panzar, John C, 1993. "Effects of the Change from Rate-of-Return to Price-Cap Regulation," American Economic Review, American Economic Association, vol. 83(2), pages 191-98, May.
- Starkie, David, 2002. "Airport regulation and competition," Journal of Air Transport Management, Elsevier, vol. 8(1), pages 63-72.
- Guthrie, Graeme, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Working Paper Series 3851, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
- Graeme Guthrie, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 925-972, December.
- Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2003. "Inefficiencies and scale economies of European airport operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 39(5), pages 341-361, September.
- Knockaert, Jasper & Evangelinos, Christos & Rietveld, Piet & Wieland, Bernhard, 2009. "Differentiated infrastructure charging: a comparison of theory and practise," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 43, pages 4-34.
- Starkie, David, 1998. "Allocating airport slots: a role for the market?," Journal of Air Transport Management, Elsevier, vol. 4(2), pages 111-116.
- 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.
- Starkie, David, 2005. "Making airport regulation less imperfect," Journal of Air Transport Management, Elsevier, vol. 11(1), pages 3-8.
- Morrison, William G., 2009. "Real estate, factory outlets and bricks: A note on non-aeronautical activities at commercial airports," Journal of Air Transport Management, Elsevier, vol. 15(3), pages 112-115.
- 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.
- Parker, David, 1997. "Price cap regulation, profitability and returns to investors in the UK regulated industries," Utilities Policy, Elsevier, vol. 6(4), pages 303-315, December.
When requesting a correction, please mention this item's handle: RePEc:zbw:tudiwv:12011. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.