Airport Regulation

Airport regulations can take the form of cost-based, incentive, single-till and dual-till regulations. The present chapter highlights that no regulatory regime can solve all pricing and investment problems involved in airport operations at once when airports control prices in the areas of aeronautical and non-aeronautical businesses. A closer control of airport aeronautical charges favors the use of incentive and single-till regulations. Cost-based and dual-till regulations provide an environment good for investments and service quality. The lesson is that policy makers have to choose whether they would like to maintain a tight control on airport prices possibly at the expense of service quality or achieve high levels of service quality possibly leading to high pricing levels