No need to regulate airports with predominantly non-aeronautical revenues
Kratzsch U, Sieg G
This paper analyzes a profit-maximizing private airport with market power in providing aeronautical services. Our model implies that airports with ample capacity may voluntarily abstain from abusing their market power if non-aeronautical revenues are airports’ main source of income. In this case, a price regulation that is confined to the aviation business will be unnecessary from a welfare point of view.
airport regulation; airport pricing; airline-airport strategic interaction; dual-till; non-aviation revenue