Market structure, countervailing power and price discrimination: The case of airports

Jonathan Haskel (), Alberto Iozzi and Tommaso Valletti

Journal of Urban Economics, 2013, vol. 74, issue C, 12-26

Abstract: A number of interesting policy questions have arisen regarding airport landing fees. For example, what is the impact of joint ownership of airports? Does airline countervailing power stop airports raising fees? Should airports be prohibited, as an EU directive intends, from charging differential input prices to airlines? We set out a model of upstream airports and downstream airlines with varying countervailing power and pricing structures. Our major findings are: (a) an increase in upstream concentration or in the degree of differentiation between airports always increases the landing fee; (b) the effect of countervailing power, via an increase in downstream concentration, lowers landing fees, but typically does not pass through to consumers; (c) with Cournot competition, uniform landing fees are always higher than discriminatory fees.

Keywords: Airports; Airlines; Landing fees; Countervailing power (search for similar items in EconPapers)
JEL-codes: D43 L13 L93 R48 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Working Paper: Market structure, countervailing power and price discrimination: the case of airports (2013)
Working Paper: Market Structure, Countervailing Power and Price Discrimination: The Case of Airports (2011)
Working Paper: Market Structure, Countervailing Power and Price Discrimination: The Case of Airports (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:74:y:2013:i:c:p:12-26

DOI: 10.1016/j.jue.2012.09.002

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