Airport pricing and regulation under passenger demand uncertainty

This paper addresses the airport pricing and regulation issues in the presence of passenger demand uncertainty. The regulatory schemes concerned include the single-till and dual-till price-cap regulations. A vertical-structure model is presented to determine the optimal airport charges under the sin...

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Bibliographic Details
Published inTransportmetrica. (Abingdon, Oxfordshire, UK) Vol. 10; no. 1; pp. 1184 - 1205
Main Authors Liu, Wen-Jing, Gong, Xu, Li, Zhi-Chun
Format Journal Article
LanguageEnglish
Published Abingdon Taylor & Francis 31.12.2022
Taylor & Francis Ltd
Subjects
Airport pricing
Airports
dual-till regulation
passenger demand uncertainty
Passengers
Pricing
Regulations
regulatory level
risk aversion
single-till regulation
Travel demand
Uncertainty
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Summary:This paper addresses the airport pricing and regulation issues in the presence of passenger demand uncertainty. The regulatory schemes concerned include the single-till and dual-till price-cap regulations. A vertical-structure model is presented to determine the optimal airport charges under the single-till and dual-till price-cap regulations. The effects of the airport regulatory level and the risk-averse preferences of stakeholders in the system on airport pricing are also examined. The results show that at a high passenger demand uncertainty level, the dual-till regulation would outperform the single-till regulation in terms of social welfare. However, at a low passenger demand uncertainty level, which regulation is better depends on various factors, such as the regulatory level and risk-averse preference.
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content type line 14
ISSN:2168-0566
2168-0582
DOI:10.1080/21680566.2022.2026837