Airport charges and cost recovery: the long-run view

Anming Zhang and Yimin Zhang

Journal of Air Transport Management, 2001, vol. 7, issue 1, 75-78

Abstract: This paper shows that when the policy of financial break-even is implemented, “strict†financial break-even on an annual, or even short-run, basis may not be socially desirable. To maximize social welfare, airports should be allowed to take losses, or make profits, at different times while achieving break-even only in the long run. In particular, with economies growing over time, socially optimal pricing for a new airport can involve deficit in its early years and surplus in its later years. Over its entire life span, however, the airport can still achieve cost recovery.

Keywords: Airport charge; Financial break-even; Socially optimal pricing (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:7:y:2001:i:1:p:75-78

DOI: 10.1016/S0969-6997(00)00024-7

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