Airport Pricing, Concession Revenues and Passenger Types

Tiziana D'Alfonso, Changmin Jiang and Yulai Wan

Journal of Transport Economics and Policy, 2013, vol. 47, issue 1, 71-89

Abstract: We study airport pricing with aeronautical and concession activities, incorporating a positive relationship between delay and consumption of concession goods, and the effect of passenger types. We assume that as congestion increases, dwell time increases - and the money spent in concession activities - and we find: (i) there is a downward correction on the congestion toll due to the positive externality of delay; (ii) the component relevant to the per-passenger benefit from concessions may be a mark-up depending on delay and the passengers' values of time. Furthermore, a welfare-maximising airport may have more incentives to induce congestion than a profit-maximising airport. © 2013 LSE and the University of Bath

Date: 2013
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