Determinants of fares and operating revenues at US airports

This paper investigates the effects of market structure on prices that airlines charge to passengers and, in particular, on revenues that airports obtain from airlines and passengers. The estimated effects of market structure on airline fares are similar to earlier findings, and the results of the passenger, airline demand, and delay equations are as expected. Airports' aeronautical and concession charges are related to market structure, but the relations are less straightforward than in the case of fares, especially regarding the vertical relations between airports and airlines. The results on aeronautical charges are consistent with the practice of charging on the basis of airplane weight.