Additional flying time
, 391
“Aerotropolis” policy
, 252
Agglomeration
, 244, 252
endogenization
, 252
equilibrium
, 246
partial
, 248
pressures
, 242
self-reinforcing
, 236
shadow
, 237
Aggregate airport effects
baseline OLS estimates of
, 278
DD estimation of standard errors and
, 278–279
Agreements
, 100, 108–109
bilateral
, 370
cooperative
, 150
master use-and-lease
, 102
Open Skies
, 389
Air Commerce Act (1926)
, 269–270, 272
Air Mail Network (1938)
, 271, 277
Air Passenger Tax
, 214–215
Air service incentive programs (ASIPs)
, 108–109
Air throughput unit (ATU)
, 159
Air traffic movements (ATM)
, 7, 153, 154, 159, 162, 168, 214, 217
Air transport parlance
, 242, 243
Air Transport Research Society (ATRS)
, 105
airport benchmarking report
, 105
Airline Deregulation Act (ADA)
, 151n2
Airlines (AL)
, 20–21, 99, 130, 143
airline–airport relationship
, 125
airports issue revenue bonds backed by
, 104–105
behavior
, 247
consequences for airline companies
, 168
context
, 240–241
control and/or invest in airport facilities
, 102–103
impact of delays on airline frequencies
, 338
economics
, 50
models for
, 216–220
network structure
, 338
data
, 343–349
empirical model
, 349–351
estimation and results
, 351–356
literature review
, 337–339
model and equilibrium analysis
, 339–343
network airlines
, 335–336
policy implications
, 356–357
organization
, 367–368
ownership and joint decision of airport and
, 107
residual RATE-setting method and signatory airline status
, 101–102
revenue and risk sharing between airports and
, 105
sector
, 99
Airport charges (AC)
, 158–159, 165, 166, 214
Air Passenger Tax
, 214–215
model results
, 227–229
models for airlines and airports behavior
, 216
airlines response to
, 216–218
airport charging under different objectives
, 218–220
numerical example
, 230–231
pass–on rates under different market characteristics
, 220–227
Airport Corporate Centre
, 329
Airport Direct Travel (ADT)
, 53–54
Airport Employment Zone (AEZ)
, 323, 327
Airport Improvement Program (AIP)
, 104
Airport of Naples (NAP)
, 375
Airport–airline
Airports Council International
, 99–100
alternative forms
, 101
airlines control and/or invest in airport facilities
, 102–103
airport–airline consortium
, 105–106
airports issue revenue bonds backed by airlines
, 104–105
incentive programs and agreements
, 108–109
information sharing and joint marketing
, 107–108
long-term usage contract
, 103–104
ownership and joint decision of airport and airline
, 107
residual RATE-setting method and signatory airline status
, 101–102
revenue and risk sharing between airports and airlines
, 105
analytical approaches
, 109
bargaining game
, 112
case studies
, 113
collusion or joint venture
, 112–113
contract design and moral hazard
, 113
driving times between English/Welsh airports
, 110
interpretation of findings and implications
, 114–116
revenue sharing
, 111
study approaches
, 113–114
arrangements
, 6, 98
consortium
, 105–106
cooperations
, 99
relationship
, 123
airport and airline risk sharing contract
, 127–135
airport and airline vertical relationship
, 124–127
balance of airport and airline risk sharing
, 135–141
incomplete contract framework analysis
, 141–149
revenue sharing
, 111
Airports (AP)
, 1, 98–99, 127, 130, 143, 214, 236, 262
behavior
, 216–220
business
, 125
changing nature of airport operations and government role
, 3–7
commercialization
, 5
complex and risky business
, 124–125
concessions
two-side complementarity
, 51
two-sidedness in
, 51–55, 60–62
welfare neutrality
, 51
welfare neutrality in airport concessions
, 55–59, 60–62
congestion
, 338
data
, 343–349
empirical model
, 349–351
estimation and results
, 351–356
literature review
, 337–339
model and equilibrium analysis
, 339–343
network airlines
, 335–336
policy implications
, 356–357
connectivity quality
, 411
average connecting times
, 413
average travel distances and times of connecting passengers
, 414
distribution of connecting times
, 415
DTI
, 417
hourly distribution of connecting passengers
, 416
KPIs
, 412
Middle East hubs
, 411
cost structure
, 8, 183
input measurement in airport industry
, 185, 188–189, 210–212
output measurement in airport industry
, 185–188, 210–212
policy implications
, 203–204
scale and scope economies in airport industry
, 196–203
technology of multiproduct firms
, 189–196
deregulation
, 70
economics literature
, 51
effects on local and regional economies
, 9–10
efficiency, structure and pricing of airport services
, 7–9
efficiency plan
, 76
finance
, 74–75
identification with “significant impact”
, 289
characteristics of “successful” airports
, 295
comparison of samples: dependent variable
, 290
geographic distribution of significant airports
, 293
on local economies
, 291
regressions
, 294–297
synthetic control estimator
, 289–292
tourism
, 292–294
income from
, 154
infrastructure
, 154
investments
, 116
issue revenue bonds backed by airlines
, 104–105
LCCs and
, 364
airline organization
, 367–368
in catchment area
, 366–367
deregulated environment
, 365
power relations
, 368–369
“light-handed” regulation
, 2
local labor markets and
, 267–269
location
, 269
operations and connectivity
, 10–12
ownership and joint decision of airport and airline
, 107
pricing
, 59
privatization
, 70
quality
, 52
revenue and risk sharing between airports and airlines
, 105
risk sharing across industries
, 125–127
services
charges determination
, 101–102
regulation of
, 19–21
spatial evolution
, 235
aviation
, 236–237
conceptual framework of NGE
, 238–244
critique of NGE approach
, 253–255
implications for airport economics and policy
, 249–253
model outcomes
, 244–249
NGE
, 237–238
traditional approaches to economic regulation of
, 21
governance arrangements involving checks and balances
, 23–24
price cap regulation
, 22–23
rate of return regulation and cost-based regulation
, 22
variations to direct regulatory approaches
, 23
Airports Authorities Act (AAA)
, 25, 28
Airports Council International
, 99–100
All Nippon Airways (ANA)
, 6, 129
airline
, 140
All Nippon Airways-Noto arrangement
, 6
group
, 130, 134
Allocative inefficiencies
, 79–80
additional robustness estimation
, 95
airport privatization
, 70
econometric specification and data
, 80–83
through error component approach
, 91
estimation
, 69, 77
methodology
distance function
, 76–78
error component approach
, 79–80
parametric approach
, 78–79
through parametric approach
, 86–90
results
allocative inefficiency through error component approach
, 91
allocative inefficiency through parametric approach
, 86–90
input-oriented distance function
, 83–86
Spanish airport system
, 72–76
stochastic frontier approach
, 71
Amenity scale
, 292, 308–310
exception
, 294
USDA ERS
, 292
American Air Mail Catalogue
, 270
“Archetypical” LCC business model
, 393
Army Air Service (AAS)
, 270, 272, 273, 275
Auckland Airport
, 28, 37, 38
Austin-Bergstrom Airport (AUS Airport)
, 294
Australia
comparison of light-handed approaches to regulation of airport services in
, 31
information disclosure and price and quality of service monitoring regulation
, 31–32
key characteristics/features
, 33
negotiate-arbitrate regulation
, 32
reviews
, 32–35
light-handed regulation of airports in
, 26–27
Australian Competition and Consumer Commission (ACCC)
, 26, 100
Auto Regressive Integrated Moving Average Model (ARIMA Model)
, 137–138
Aviation
, 54, 247, 262, 265
activities
, 50
aviation-dependent property
, 10
businesses
, 55–56
competition
, 12
Avinor
, 7, 164
charging policy
, 158
consequences for Airport owner
, 164, 167, 178–179
Norwegian airports owned by
, 157
Cairo International Airport
, 56
Capital stock measurement
, 188
Capital variable
, 82, 197
Car rental-type services
, 57, 60, 61
Catchment area
, 11, 365, 382
airports in
, 366–367
analysis
, 253
of Berlin
, 193
international
, 322
overlapping
, 109
Census Based Statistical Area (CBSA)
, 269, 274–276, 287
Centralized management model
, 71, 72, 76
Ceteris paribus
, 243, 317
Charleroi airport
, 108, 117
Circuity time. See Additional flying time
Circular cumulative causation
, 239
Civil Aeronautics Board (CAB)
, 249
Cobb-Douglas function
, 85, 246
Colorado Springs Airport (COS Airport)
, 294, 297
Commerce Act (1986)
, 25, 28, 32, 36
Commerce Amendment Act (2008)
, 28
Commercial aviation
, 270, 272, 274
Commercial property
, 323
economic effect of airport operations
, 315–318
international airport effect on commercial property values
, 313
Toronto Pearson International Airport
, 322–330
Vancouver International Airport
, 318–322
Commercial services
, 54, 63, 105, 107, 111, 114, 184
Commission for Aviation Regulation in Ireland
, 30
Complementarity
between aviation and commercial services
, 54
one-side
, 52
two-side
, 51
Composite cost function, general specification of
, 193–194
Compound Annual Growth Rate (CAGR)
, 375, 377
Concession(s)
, 50–51, 52
services
, 57
substitutability between concession goods at airport and goods
, 55–57
traveler and non-traveler surplus in concessions consumption
, 57–59
Congestion
, 336
internalization of
, 337
negative effects of
, 338
Connecting time
, 391, 399
Connecting Time Increase indicator (CTI indicator)
, 399–401, 413
Connectivity
indicators
, 398
average market length of transfer passengers
, 401
passenger itineraries
, 400
quality
, 398–401
quantity
, 398
SC potential indicator
, 401–402
measures
, 390–392
See also Global hub connectivity
Constant-elasticity of substitution (CES)
, 246
Contract theory
framework
, 125
incomplete
, 141–142
Copenhagen airport
, 18, 20
Core-periphery
dualism
, 238
model
, 243
vertical linkage model
, 245
Cost complementarity test
, 197, 202
Cost functions for UK airport industry
, 198
Cost of raising public funds
, 155, 166, 167, 229
Cost structure of airport industry
input measurement in airport industry
, 185, 188–189, 210–212
output measurement in airport industry
, 185–188, 210–212
policy implications
, 203–204
scale and scope economies in airport industry
, 196–203
technology of multiproduct firms
, 189–196
Cost-based regulation
, 22
Cross-country studies
, 199–201
Cross-sectional analysis
, 326
hotels
, 326–327
offices
, 328–330
warehouses
, 327–328
Customer facility charges (CFCs)
, 104
Data envelopment analysis (DEA)
, 8, 28, 71, 183
Datasets
, 303, 390, 402–404
Degree of airport/airline dependency
, 369–371
Delays
, 336
impact of delays on airline frequencies
, 338
evolution of airport
, 348
and size of airports in sample
, 346
Demand
demand-based approach
, 391
endogenous location of
, 243–244
functions
, 221
Destinations served (DEST)
, 292, 398
Detour Time Increase (DTI)
, 399, 400, 417
Detroit Airlines North Terminal Consortium (DANTeC)
, 106
Difference-in-differences (DD)
, 266
estimation of aggregate airport effects and standard errors
, 278–279
estimator
, 278
regression
, 287
Direct passengers
, 338, 396, 397
Direct regulatory approaches
, 18, 21–22, 23, 42
Dispute resolution approach
, 38–39, 41
to regulation
, 42
Distance function
, 76–78, 80
duality
, 77
input-oriented
, 71
output input
, 199
Driving distance
, 324, 326–327
Dubai
, 12, 107, 112, 247, 401, 406, 407, 411, 413, 419
Dummy variables
, 85, 161, 269, 305, 320, 350, 351
Duopoly
, 8, 111, 215, 225–227, 337
Dynamic oligopolistic market structure
, 241
Lack of motivation
, 76–77
“Leave-one-out” method
, 283
Light-handed regulation
, 2, 3, 7, 15, 16, 29, 100
airport services in Australia and New Zealand
, 31
information disclosure and price and quality of service monitoring regulation
, 31–32
key characteristics/features
, 33
negotiate-arbitrate regulation
, 32
reviews
, 32–35
benefits of greater negotiation of airport services
, 30–31
design
, 35–41
difficulties experienced with price cap regulation of airport services
, 29
increased complexity and regulatory intervention over time
, 29–30
risk and uncertainty
, 30
direct regulatory approaches
, 18
evolution
, 24
Australia
, 26–27
New Zealand
, 24–25, 27–29
North America
, 25–26
“light-handed” regulatory alternative
, 16
price cap regulation
, 17
regulation of airport services
, 19–21
regulatory compliance costs of alternative approaches
, 39
information disclosure regulation and price and quality
, 39
negotiate-arbitrate regulation
, 39
threat of stronger regulatory measure, or regulatory intervention, under
, 35
information disclosure regulation and price and quality
, 36
negotiate-arbitrate regulation
, 36–37
traditional approaches to economic regulation of airports
, 21–24
transparency of airport performance under light-handed regulation
, 37
information disclosure regulation and price and quality
, 37–38
negotiate-arbitrate regulation
, 38–39
Linear demand function
, 221–223
duopoly
, 225–227
Load factor (LF)
, 130, 137–138, 147–148
Load Factor Guarantee Mechanism (LFGM)
, 105, 127, 144
Noto Airport
, 130–135
estimated airport’s payoff probability distributions
, 140
Local economies, airport effects on
, 9–10
Local labor markets and airports
, 267–269
London Heathrow
, 19, 107, 215, 393, 396, 404, 407, 411, 413, 416
London-Gatwick airports
, 394
Long-run global economies of scale
, 196
Long-run marginal cost pricing
, 165
for airline companies and passengers
, 168
for airport owner
, 167
consequences of
, 166
price equal to
, 162–165
for State
, 167
welfare considerations
, 168–169
Long-term usage contract
, 6, 103–104, 106
“Love-for-variety” effect
, 241
Low cost carriers (LCCs)
, 11, 99, 126, 237, 336, 362, 389
and airports
, 364
airline organization
, 367–368
in catchment area
, 366–367
deregulated environment
, 365
power relations
, 368–369
analysis
case studies
, 375–381
methodology
, 371–373
sample and case selection
, 373–375
degree of airport/airline dependency
, 369–371
in Europe
, 363–364
features of low-cost model
, 363
passengers in millions
, 364
RCI-YCP diagram for airport sample
, 374
service growth
, 113
Nash Bargaining solutions
, 143, 146, 148
National Access regime
, 26
National Aviation Policy statement
, 18
National Energy Board (NEB)
, 26
National highway plan
, 264–265
National Historical Geographic Information System (NHGIS)
, 269
National Plan of Integrated Airport Systems
, 23
National specialization
, 236
Natural monopoly
, 189–190
Negotiate-arbitrate regulation
, 26–27, 32, 36–37, 42
light-handed regulation
, 36–37
regulatory compliance costs of alternative approaches
, 39
threat of stronger regulatory measure, or regulatory intervention
, 36–37
transparency of airport performance
, 38–39
Negotiated settlements
, 25
Negotiation, benefits of
, 30–31
Neoclassical theory
, 76–77, 253–254
Network
airlines
, 335–336
behavior
, 339
choice
, 337
New economic geography (NEG)
, 236, 239, 253–254
New geographical economics (NGE)
, 9, 237–238, 253
aviation
, 236–237
conceptual framework of
, 238
backyard capitalism
, 238–239
endogenous firm locations
, 242–243
endogenous location of demand
, 243–244
imperfect competition
, 240–241
increasing returns
, 240
study of geographical concentration
, 239
transportation/trade costs
, 241–242
critique of
, 253–255
implications for airport economics and policy
, 249
implications for approach and analysis of airport location problem
, 251–253
NGE as approach to transport project appraisal
, 249–250
model outcomes
, 244–249
New Zealand
, 27
changes to light-handed regulation in
, 27–29
comparison of light-handed approaches to regulation of airport services in
, 31
information disclosure and price and quality of service monitoring regulation
, 31–32
key characteristics/features
, 33
negotiate-arbitrate regulation
, 32
reviews
, 32–35
light-handed regulation in
, 24–25
New Zealand Commerce Commission (NZCC)
, 27, 28, 35
Niagara Falls International Airport Stakeholders Group
, 109
No-payment zone
, 135, 141
Non-aeronautical charges
, 105
Non-aviation
activities
, 50, 61
businesses
, 55–56
related property
, 10
revenues
, 50
services
, 52–53
Non-legacy carriers
, 351, 354, 355
Non-traveler surplus in concessions consumption
, 57–59
North America, Light-Handed Regulation in Utility Sector in
, 25–26
North American Industry Classification System (NAICS)
, 319, 322
Norwegian Airports
costs at
, 159–162
Ramsey pricing approach at
, 170–173
structure
, 156–158
Norwegian kroner (NOK)
, 158, 159, 160, 163, 164, 165
Norwegian Ministry of Transport and Communications
, 155, 156, 162, 164
Noto airport
, 142
information on
, 129
LGFM
, 130
ANA group
, 130–131
estimated LF
, 133
no-payment zone
, 135
Noto airport long-term results
, 136
payment schedules of Noto Airport LFGM
, 132
renegotiation process
, 134
Numerical model
, 135, 138, 147
Parametric approach
, 78–79, 80
allocative inefficiency through
, 86
evolution of allocative efficiency for pair of inputs
, 87
inefficiency indices by pair of inputs
, 86
Spanish airport system
, 90
specific-group evolution efficiency labor–intermediate consumption
, 89
specific-group evolution of allocative efficiency labor–capital
, 88
Pareto-superior equilibrium
, 339
Pass-on rates
, 170
exponential demand function
, 224–225
linear demand
, 221–223
duopoly
, 225–227
under market characteristics
, 220, 228
power demand function
, 223–224
“Pass-on” airport costs
, 8
Passenger facility charges (PFC)
, 104
Passengers (PAX)
, 52, 60, 154, 157, 159, 160, 214, 215, 216, 217, 219
airports marginal cost
, 220
charge
, 168
connectivity
, 391
consequences for
, 168
fiscal
, 230
overcapacity
, 404
price sensitivity
, 223
travel demand
, 222
Path dependence concept
, 247, 255
Perfect competition
, 240–241
Piece-wise linear function
, 145
Point-to-point
airlines
, 339
point-to-point-scheme
, 367
Post-World War II period
, 263, 274
Power demand function
, 9, 221, 223–224
Pre-privatization process
, 71
See also Allocative efficiency estimation
Price cap regulation
, 22–23
difficulties experienced with
, 29
increased complexity and regulatory intervention over time
, 29–30
risk and uncertainty
, 30
in United Kingdom
, 17
Price equal to long-run MC
, 162–165
Price monitoring
, 26
See also Service monitoring, price and quality of
Pricing of airport operations
airport charges
, 158–159
consequences for MC pricing
, 178–179
costs at Norwegian airports
, 159–162
marginal cost-based airport charges
, 162–169
Norwegian airport structure
, 156–158
principles of economic welfare
, 179–180
Ramsey pricing approach under budget constraints
, 169–173
Primary airports
, 365, 366
Principal–agent theory
, 127
Private monopolistic airports
, 53
Privatization
airport
, 70
airport privatization schedule 2009–2015
, 76
schedule
, 75–76
by Spanish government
, 5
of Sydney Airport
, 34
Product-specific scale economies
, 191
Productivity Commission
, 39
Profit maximizing airports
, 218–219, 220
Public monopolistic airports
, 53
Public private partnership (PPP)
, 102–103, 126
Public Service Obligation (PSO)
, 156, 216, 375
San Antonio Airlines Consortium (SAAC)
, 106
Scale and scope economies in airport industry
, 191, 192, 196
critical assessment
, 201–203
cross-country studies
, 199–201
single country studies
, 198–199
United States
, 197–198
Scandinavian Airlines (SAS)
, 168
Scientific/technical and R&D sector
, 317
“Secondary” airport
, 365, 366
Self-connectivity (SC)
, 12, 393–395
hidden potential of
, 417–419
potential indicator
, 401–402
Self-reinforcing agglomeration
, 236, 237
Service monitoring, price and quality of
in Australia
, 38
information disclosure regulation and
, 36, 37, 39
regulation
, 31–32
Severe acute respiratory syndrome (SARS)
, 30
“Signatory airline”
, 5–6, 101–102
Simple principal–agent model
, 216
Singapore Airlines (SIA)
, 107
Single country studies
, 184–185, 197, 198–199
Sliding scale regulation
, 23
Slot-distribution regimes
, 338–339
Social welfare
, 4, 7, 58, 166, 219
Spanish airport system
, 71, 87, 90
privatization schedule
, 75–76
taxonomy of Spanish airports
, 72–75
passenger volumes and dynamics of Spanish airports
, 74
Spanish airport classification
, 73
Spanish Ministry of Transports
, 88
Spanish Statistical Office (INE)
, 81–82
Spatial econometrics techniques
, 265
Spatial evolution of airports
aviation
, 236–237
conceptual framework of NGE
, 238–244
critique of NGE approach
, 253–255
implications for airport economics and policy
, 249–253
model outcomes
, 244–249
NGE
, 237–238
Spatial impossibility theorem
, 238
Special Facility Revenue Bonds (SFRBs)
, 104
Springfield-Branson National Airport (SGF)
, 283, 291, 307
Stochastic frontier approach
, 71
“Strategic simplification”
, 241
Super connectors. See Gulf-based carriers
“Supply-based” approaches
, 391
Synthetic control analysis
, 279–283
Synthetic control estimator, consistency of
, 287–289