The evolution of airport ownership and governance

This presentation examines the evolution of airport governance from public utility to modern business. I also briefly look at airport regulation and in this context ask the questions, do airports need to be regulated and if so, why? I consider the new thinking on two-sided platforms and examine whether this may be the new way of thinking about governance. In judging governance structures and regulation, I argue that dynamic efficiency has been underemphasized in the debate over privatization and that airline deregulation has been most important in shifting the balance of power between airlines and airports.

Research Highlights
► The paper considers the importance of two-sided markets in the understanding of airport economics.
► The regulation of two-sided airport markets is challenged because of the conflicting objectives and perceptions of regulators.
► It looks at the optimal way of regulating a two-sided airport market and concludes that it is difficult to develop a regulatory structure that would be preferential to market mechanisms.
► With liberalization and open skies agreements, airports can bid for airline services, and airlines are free to choose which airport best serves their needs and their business model