Incentive schemes on airport charges — Theoretical analysis and empirical evidence from German airports

A substantial and growing number of airports have implemented financial incentives for airlines within their charging system. This paper first classifies incentives and describes their potential advantages and disadvantages. Examples for incentive schemes are presented, referring to the largest German and selected European airports. The paper illustrates the different targets of incentive schemes as well as their large variety in design.The possible impact of incentives on the economic performance of airports is analyzed from a theoretical point of view. It is shown that at some airports, the incentive scheme contains inconsistencies. Furthermore, for the nine largest German airports, the use of incentives as well as their potential influence on traffic development is discussed. However, the isolated analysis of these incentice schemes does not provide conclusive evidence of their effects.