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Working paper / Energy

Privatization, Regulation and Airport Pricing: An Empirical Analysis for Europe

Author(s): GERMÁ Bel, FAGEDA Xavier

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ABSTRACT

This paper examines factors determining prices that airports charges to airlines. Using data for 100 large airports in Europe, we find that they charge higher prices when they move more passengers. Additionally, competition from other transport modes and other nearby airports imposes some discipline on the pricing behaviour of airports.Low-cost carriers and airlines with a high market share seem to have a stronger countervailing power. Finally, we find that private airports not regulated charge higher prices than public or regulated airports. From our analysis we can infer that  the market power of each airport is dependent upon its specific characeteristics.