Inverting the regulatory rules? Optimizing airport regulation to account for commercial revenues

Christos Evangelinos, Ronny Püschel and Susan Goldhahn

No 1/2011, Discussion Papers from Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics

Abstract: 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.

Keywords: Airport regulation; non-aviation revenues; price differentiation; single till; dual till (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-com and nep-reg
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tudiwv:12011

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