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Infrastructure

Analysis on best practice regulation of infrastructure assets and impact assessments of developments in charges regimes.

Reports

Airport Competition
This paper shows that airports enjoy significant market power in their local markets. Competitive forces are not strong enough to ensure a fair outcome for consumers. Robust and effective economic regulation is required.
Full report (pdf)

Inefficiency in European airspace
European airspace has pent-up inefficiency resulting in higher costs and lost time to consumers.
Full report  (pdf)

The impact on Senegal of removing the infrastructure development charge at Dakar airport
An assessment of the benefits created from removing the Infrastructure Development Charge levied on international passengers departing from Léopold Sédar Senghor International airport.
Full report - English version (pdf)
Rapport complet - version française (pdf)

Infrastructure Costs
Airlines and passengers are estimated to have paid at least US$92.3 billion for the use of airport and air navigation infrastructure globally in 2011, equivalent to 14.4% of the cost of transport.
Full report (pdf)

Delhi Airport aeronautical tariff - Impact
The Airports Economic Regulatory Authority (AERA) adopted a shared till inflation – X price cap model for the determination of aeronautical tariffs effective May 15th, 2012. The new tariffs determined by AERA based on the shared till inflation – X price cap model would impose.
Full report (pdf)

Infrastructure Costs 2007
Charges paid by airlines and their customers for infrastructure usage rose sharply during the 1990s recession and may again this downturn.
Full report (pdf)

Airport Regulation 
A good airport regulatory structure - providing better rather than just increased regulation - can benefit both airports and airlines in terms of greater efficiency and low and stable financing costs.
Complete Report (pdf)

Economic Regulation
The case for independent economic regulation of airports and air navigation service providers (ANSPs) is clear. It improves efficiency and productivity throughout the aviation industry and it encourages timely and cost-effective new investment.
Summary (pdf)
Summary Europe (pdf)
Full report (pdf)

Airport privatization
Ten key lessons for future airport privatisation, drawn from a study of the successes and failures of past privatisation of twelve airports in Europe, Asia-Pacific and Latin America.
Summary report (pdf)
Full report (pdf)

Understanding airport benchmarking
by Michael Tretheway and Ian Kincaid, InterVISTAS
Rising infrastructure charges are another current challenge and this essay looks at airport benchmarking, an important tool to spur efficiency and pricing improvements where the market or regulator is ineffective. Michael Tretheway and Ian Kincaid take the reader through some of the pitfalls. 
Full report (pdf) 

Preparing for a more competitive airports sector
by Nick Fincham and Alina Jardine-Goad, UK CAA
Any mechanism to inject competitive pressures into the airports sector would produce better outcomes for airline and their customers. The breakup of BAA's ownership of the London and lowland Scotland airports is a welcome first step. However, the nature of the market power remaining in the airports market is still likely to require economic regulation rather than reliance on Competition Law.
Full report (pdf)

European policy perspectives from a former DGCA
by Peter Griffiths, IATA
Careful policy design in the key areas of environment, infrastructure investment and avoiding trade protectionism will be vital to the ongoing success of the aviation industry in Europe. Peter Griffiths, former Director General UK CAA has recently joined IATA as Regional Vice President for Europe and shares a policy-makers perspective on how these issues can be tackled. 
Full report (pdf)

Light-handed regulation of airports: The Australian experience -
by Peter Forsyth, Monash University
Australia has been experimenting with light-handed regulation of its major airports since 2002. However, there remains ambiguity as to what the system seeks to achieve and its effectiveness. From a broad efficiency perspective it has performed reasonably well, though not without its problems. In terms of minimising the abuse of market power the system has been less successful.
Full report (pdf)

Investment incentives and airport regulation
by David Starkie, Economics-Plus Ltd
This article examines the proposition that price-cap regulation creates an incentive to under-invest at privatised airports.  Using empirical evidence from price-capped airports in the UK and Ireland, it is concluded that, on balance, the regulated airport companies have inclined towards over-investment rather than under-investment.
Full report (pdf)

Slot concentration at network hubs
by David Starkie, Economics-Plus Ltd
A high concentration of take-off and landing slots in one airline at major hub airports can represent an economically efficient outcome. Concern has previously been raised that the concentration of slots is anti-competitive, leading to calls for slot re-distribution or for new or used slots to be allocated to new entrants only.
Full report (pdf)

The cost of EU regulation
The annual cost to EU airlines of the regulations imposed on them in Europe is estimated to be at least 5.9 billion. Since 2001 this financial burden has risen by more than 2.5 billion.
Full report (pdf)

 

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