Evangelinos, Christos Püschel, Ronny Goldhahn, Susan
Year of Publication:
Diskussionsbeiträge aus dem Institut für Wirtschaft und Verkehr 1/2011
This paper analyzes the role of commercial revenues in today's airport regulatory system. We find that the current regulatory regime only partially achieves core aims such as welfare maximization. After highlighting instances in which airport price regulation is not economically justified, we explore the potential for airports to exercise market power in the commercial sector. In certain circumstances, we advocate the introduction of an 'inverted' dual till system under which commercial as opposed to aviation revenues are the focus of price regulation. The suitability of such a system varies from airport to airport, however, depending on various factors, such as the airport's competitive environment and the presence of capacity constraints.
Airport regulation non-aviation revenues price differentiation single till dual till