Two-sided platforms in airport privatization

• The recent literature has adopted the concept of two-sided platforms to describe the role of airports in the modern air transport industry.
• We investigate whether privatization enhances the dynamic capabilities of airports so that they more closely resemble a two-sided platform.
• We suspect that privatization may mark the birth of an entity that acts a facilitator, allowing for previously unexploited direct and indirect network effects.
• We consider the case of the recent privatization of Brazilian airports.

This paper develops an empirical model to examine the relationship between ownership change and two-sided-platform formation in the air transport industry. We investigate whether privatization enhances the dynamic capabilities of airports so that they more closely resemble a two-sided platform. We study the case of the recent privatization of Brazilian airports. We find evidence of a permanent, ceteris paribus increase in demand triggered after the privatization program. The results are consistent with a preemption of assets with a view to expanding operations and so benefiting from the network effects offered by a two-sided platform.