Economic Impact Assessment of Regulatory Changes: A Case Study of a Proposed New ICAO Standard for Contaminated Runways

Svein Bråthen and Karoline L. Hoff
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Svein Bråthen: Department for Transport Economics, Faculty of Logistics, Molde University College, Specialized University in Logistics, Möre Research Institute, 6402 Molde, Norway
Karoline L. Hoff: Department for Transport Economics, Faculty of Logistics, Molde University College, Specialized University in Logistics, Möre Research Institute, 6402 Molde, Norway

Sustainability, 2020, vol. 12, issue 15, 1-27

Abstract: The literature on economic impact assessments (EIA) of regulatory changes in the transport sector is scarce. This study examines how a change in the regulatory framework for air transport could affect transport costs. The case in question is the International Civil Aviation Organization (ICAO) State letter AN 4/1.2.26-16/19 that proposed to set a higher minimum friction on runways operated during slippery conditions. This may affect operations, particularly in the northern hemisphere. Four Norwegian airports that operate under severe winter conditions are used as examples. Sudden cancellations or transfers to another airport give additional costs per passenger, ranging from NOK 750 to NOK 5600 per return flight. If these results are generalized to all affected flights in Norway, the annual estimate is NOK 400–450 million. These numbers may not seem exorbitant. However, the costs are mainly borne by a limited number of airports. Some of them may have to close during winter, with severe consequences for local communities. This study illustrates how effects of a proposed regulatory change may be assessed in order to aid the decision-making process. The impacts on aviation safety are not considered. Data on aircraft accidents in Norway do not indicate significant effects from the proposed regulatory change.

Keywords: aviation; economic impact assessment; cost benefit analysis; regulatory changes; runways (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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