Access pricing regulation in the U.S. domestic aviation industry

Douglas Turner

Journal of Regulatory Economics, 2022, vol. 62, issue 1, No 2, 24-46

Abstract: Abstract I examine how regulatory preferences in setting a federal price cap on passenger facility charges (PFCs), the variable portion of an access price in the U.S. domestic aviation industry, have evolved over time. PFCs are a per-passenger charge paid by airlines to airports. Despite the fact that the PFC cap has declined in real terms since 2001, I find that regulators have given greater importance to airports since the turn of the century. There are a number of recent proposals to increase the price cap and, at a minimum, restore the cap to 2001 real levels. I find that a price cap decrease would instead be necessary to maintain the preferences of regulators in 2001.

Keywords: Access pricing; Airports; Regulation; Regulatory preference (search for similar items in EconPapers)
JEL-codes: D43 L13 L5 L93 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11149-022-09453-8

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