Public versus private airport behavior when concession revenues exist

Research output: Journal article publicationJournal articleAcademic researchpeer-review

34 Citations (Scopus)

Abstract

The share of revenues from airport concession services among airports worldwide has reached an average level of roughly 50% today. Since concessions may exert downward pressure on the private aeronautical charge, the question is whether price regulation of private airports has become obsolete. The recent literature on airport concessions suggests that private airport pricing may still be excessive from the social viewpoint. This paper complements this literature by considering (i) two distinct types of concession services called retail services and car rentals, (ii) two-sided demand complementarity between aeronautical and concession services, and (iii) specific airport concession services that are welfare neutral in the sense that the surplus derived from concession services is independent of traveling activities. In this setting, airport price regulation can become obsolete, but concession services of the car-rental type can also increase the benefits of airport price regulation.
Original languageEnglish
Pages (from-to)38-46
Number of pages9
JournalEconomics of Transportation
Volume2
Issue number1
DOIs
Publication statusPublished - 1 Mar 2013
Externally publishedYes

Keywords

  • Airport privatization
  • Car rentals
  • Concessions
  • Congestion
  • Retail services

ASJC Scopus subject areas

  • Transportation
  • Economics, Econometrics and Finance (miscellaneous)

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