State AIDS to low-cost airlines: Could it be worth if durable?

Faut-il autoriser des aides d’exploitation pérennes versées par les aéroports régionaux aux compagnies à bas coûts ?

Estelle Malavolti () and Frédéric Marty
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Estelle Malavolti: ENAC - Ecole Nationale de l'Aviation Civile, TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique

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Abstract: The guidelines on state aids, issued in 2014, provide simpler start-up aids rules for new routes and open the way to transitory operating aid schemes. These measures as discounts on landing or on terminal charges, can make sense at the economic point of view and can comply with the private market investor principle. For this purpose, we model the airport as a two-sided platform, performing a trade-off between its aeronautical and commercial resources. Furthermore, we put into relief the relationship between the level of the subsidy and the airport's charges regulation. If regulation uses a price-cap mechanism, the airline may abuse of its negotiation power to extract the main part of the surplus produced by the contract. Conversely, a regulation based on a floor mechanism may allow to limit the capacity of the airline to extract gains and to reduce by way the level of the subsidy needed to balance the airport's budget.

Keywords: Aides d'Etat; Marché biface; Transport aérien; Redevances aéroportuaires (search for similar items in EconPapers)
Date: 2019
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Published in Revue Economique, 2019, 70 (2), pp.149-166. ⟨10.3917/reco.pr2.0129⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01985218

DOI: 10.3917/reco.pr2.0129

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