Airport incentive programs: A European perspective
In this paper we investigate current pricing practices at the 200 biggest airports in the European Union. Our analysis shows that airport incentive programs are, in general, a common tool of airport pricing as they are used at one third of all airports. We also find evidence on the presence of bilateral agreements between airport operators or regional authorities on one side and airlines on the other side which serve as a substitute for published incentive programs. Geographically, usage of the different tools varies substantially between different EU countries. A detailed assessment of the incentive schemes offered at German airports within our broader European sample reveals that the average level of landing and take-off, parking and positioning and passenger charges is generally reduced by more than 10%, at smaller airports even by up to 44%. Given the usually low profit margin of airlines and that airport charges account for up to 10% of total operating costs, these incentives can have an important influence on the economic viability of a route. Moreover, in an airline's multi-criteria-based assessment of potential market entries or route expansions, such incentive schemes might compensate selected weaknesses of an airport's strategic posture.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: Albertus Magnus Platz, 50923 Köln|
Phone: 0221 / 470 5607
Fax: 0221 / 470 5179
Web page: http://www.spl.uni-koeln.de/128.html
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.:
- Varian, Hal R, 1985. "Price Discrimination and Social Welfare," American Economic Review, American Economic Association, vol. 75(4), pages 870-75, September.
- Johannes Fuhr & Thorsten Beckers, 2008. "Contract Design, Financing Arrangements and Public Ownership—An Assessment of the US Airport Governance Model," Transport Reviews, Taylor & Francis Journals, vol. 29(4), pages 459-478, September.
- Gillen, David & Hinsch, Holger, 2001. "Measuring the economic impact of liberalization of international aviation on Hamburg airport," Journal of Air Transport Management, Elsevier, vol. 7(1), pages 25-34.
- Jean-Charles Rochet & Jean Tirole, 2003.
"Platform Competition in Two-Sided Markets,"
Journal of the European Economic Association,
MIT Press, vol. 1(4), pages 990-1029, 06.
- Rochet, Jean-Charles & Tirole, Jean, 2003. "Platform Competition in Two-Sided Markets," IDEI Working Papers 152, Institut d'Économie Industrielle (IDEI), Toulouse.
- Jean-Charles Rochet & Jean Triole, 2002. "Platform competition in two sided markets," LSE Research Online Documents on Economics 24929, London School of Economics and Political Science, LSE Library.
- Jean-Charles Rochet & Jean Triole, 2002. "Platform Competition in Two Sided Markets," FMG Discussion Papers dp409, Financial Markets Group.
- Lohmann, Guilherme & Albers, Sascha & Koch, Benjamin & Pavlovich, Kathryn, 2009. "From hub to tourist destination â€“ An explorative study of Singapore and Dubai's aviation-based transformation," Journal of Air Transport Management, Elsevier, vol. 15(5), pages 205-211.
- Richard K. Green, 2007.
"Airports and Economic Development,"
Real Estate Economics,
American Real Estate and Urban Economics Association, vol. 35(1), pages 91-112, 03.
- Marco Percoco, 2010. "Airport Activity and Local Development: Evidence from Italy," Urban Studies, Urban Studies Journal Limited, vol. 47(11), pages 2427-2443, October.
- Friedrich Gröteke & Wolfgang Kerber, 2004. "The Case of Ryanair – EU State Aid Policy on the Wrong Runway," Marburg Working Papers on Economics 200413, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Barbot, Cristina, 2006. "Low-cost airlines, secondary airports, and state aid: An economic assessment of the Ryanairâ€“Charleroi Airport agreement," Journal of Air Transport Management, Elsevier, vol. 12(4), pages 197-203.
- Gillen, David, 2011. "The evolution of airport ownership and governance," Journal of Air Transport Management, Elsevier, vol. 17(1), pages 3-13.
- Warnock-Smith, David & Potter, Andrew, 2005. "An exploratory study into airport choice factors for European low-cost airlines," Journal of Air Transport Management, Elsevier, vol. 11(6), pages 388-392.
- David Starkie, 2001. "Reforming UK Airport Regulation," Journal of Transport Economics and Policy, University of Bath, vol. 35(1), pages 119-135, January.
When requesting a correction, please mention this item's handle: RePEc:zbw:ucdbpl:107. 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.