Transportation Infrastructure Management One- and Two-sided Market Approaches

David Gillen and Benny Mantin

Journal of Transport Economics and Policy, 2013, vol. 47, issue 2, 207-227

Abstract: We study a profit-maximising airport under one- and two-sided market structures. Our analysis reveals that the airport management will choose the welfare maximising price structure based on market characteristics and demand complementarity. We find that, in contrast with the traditional literature, airports in low- or high-density markets will exercise market power, while over a broad range of market densities the airport sets prices to incentivise airlines to expand its services, and both airport and airlines realise strictly positive profits. © 2013 LSE and the University of Bath

Date: 2013
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