Airport pricing and concession revenues

  • This paper considers a congested airport that provides aeronautical services to airlines and concessions to retailers or, respectively, car rental companies. It is shown that airport retailers exert downward pressure on the private aeronautical charge. On the other hand, the effect of car rentals on the private aeronautical charge is ambiguous. By contrast, the first-best airfare and aeronautical charge are independent of retail profits, while they are positively related to car rentals. Finally, the comparison of private and welfare-oriented airport behavior shows that private behavior can lead to the welfare-optimal outcome when commercial services exist.

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Author:Achim I. Czerny
Series (Serial Number):WHU – Working Paper Series in Economics (WP 09/05)
Publisher:WHU - Otto Beisheim School of Management
Place of publication:Vallendar
Document Type:Working Paper
Date of Publication (online):2017/11/24
Date of first Publication:2009/09/01
Release Date:2017/11/24
Tag:Autovermietung; Dienstleistung; Einzelhandelsdienstleistung; Flughafen; Konzession; Preisgestaltung; Stauung
Airport; Car rental; Concession; Congestion; Pricing; Retail service; Service
Issue:Rev. Nov. 2010
Page Number:29
Institutes:WHU Economics Group / Lehrstuhl für Controlling und Regulierungsökonomik
JEL-Classification:D Microeconomics / D4 Market Structure and Pricing / D42 Monopoly
D Microeconomics / D6 Welfare Economics / D62 Externalities
L Industrial Organization / L1 Market Structure, Firm Strategy, and Market Performance / L12 Monopoly; Monopolization Strategies
L Industrial Organization / L9 Industry Studies: Transportation and Utilities / L93 Air Transportation
R Urban, Rural, and Regional Economics / R4 Transportation Systems / R41 Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise
R Urban, Rural, and Regional Economics / R4 Transportation Systems / R48 Government Pricing; Regulatory Policies; Transportation Planning
Licence (German):Copyright for this publication