Optimal regulation design of airports: Investment incentives and impact of commercial services

David Martimort, Guillaume Pommey () and Jerome Pouyet
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Guillaume Pommey: Università degli Studi di Roma Tor Vergata [Roma, Italia] = University of Rome Tor Vergata [Rome, Italy] = Université de Rome Tor Vergata [Rome, Italie]

PSE-Ecole d'économie de Paris (Postprint) from HAL

Abstract: Modern airports provide commercial services to passengers in addition to aeronautical services to airlines. We analyze how the airport's market power impacts the pricing of services when the airport also invests in the quality of its infrastructure. There is a need to regulate the airport and the optimal regulation can be implemented with a price-cap and a subsidy scheme targeted to the investment. The choice between a single-till and a dual-till approach does change neither the optimal regulation nor its implementation. We also investigate the consequences on the optimal regulation of the nature of the airport-airline relationship and of the observability of investment.

Keywords: airports; regulation; commercial services; investment (search for similar items in EconPapers)
Date: 2022-10
New Economics Papers: this item is included in nep-com, nep-reg and nep-tre
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Published in Transportation Research Part B: Methodological, 2022, ⟨10.1016/j.trb.2022.07.008⟩

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Journal Article: Optimal regulation design of airports: Investment incentives and impact of commercial services (2022)
Working Paper: Optimal regulation design of airports: Investment incentives and impact of commercial services (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:hal-03328394

DOI: 10.1016/j.trb.2022.07.008

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