Tuesday, July 28, 2009

Privatization, Regulation and Airport Pricing

Thanks goes out to the Antitrust & Competition Law Blog, a fellow member of the Law Professors Blog Network, for calling attention to Xavier Fageda & German Bel's Privatization, Regulation and Airport Pricing: An Empirical Analysis for Europe (EUI Working Paper RSCAS 2009/27, June 2009) (available here).  From the abstract:

This paper examines factors determining prices that airports charge to airlines. Using data for 100 large airports in Europe, we find that they charge higher prices when they move more passengers. Additionally, competition from other transport modes and other nearby airports imposes some discipline on the pricing behavior of airports. Low-cost carriers and airlines with a high market share seem to have a stronger countervailing power. Finally, we find that private airports not regulated charge higher prices than public or regulated airports. From our analysis, we can infer that market power of each airport is dependent upon its specific characteristics.


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