ACCHANGE: Building economic models to analyse the performance of air navigation service providers

Efficiency losses through fragmentation? Scale effects in European ANS provision

“…However, holistic approaches in ANSP benchmarking require methodologies that consider multiple inputs and/or outputs. Subsequently, recent academic studies analyzed ANS performance using data envelopment analysis (DEA) (Arnaldo, Comendador, Barrangan, & Pérez, 2014; Bilotkach, Gitto, Jovanović, Mueller, & Pels, 2015; Button & Neiva, 2014; Ćujić, Jovanović, Savić, & Jakšić, 2015) or stochastic frontier analysis (SFA) (Blondiau, Delhaye, Adler, & Proost, 2016; NERA, 2006).…”

“…The need to consider multiple inputs and outputs leads to econometric procedures, such as the SFA. However, studies like Blondiau, Delhaye, Adler, and Proost (2016) and NERA (2006) have shown that it is very challenging to estimate production or cost functions as well as the bias terms appropriately, leading to insufficient results.…”

Motivating air navigation service provider performance

“…In this section, we develop an economic model to understand the possible links between performance, regulation and ownership form. For this analysis, we extend the theoretical model presented in Blondiau et al (2016) which explains the efficiency efforts of a regulated monopoly as a function of the objective of the monopolist and the regulatory framework in place. We assume that the objective of an ANSP is likely to draw from three underlying interests, namely maximization of consumer surplus (CS) of the airlines (and indirectly passengers) with weight parameter , maximization of profits ( ) with weight parameter and national interest (NI) with weight parameter .…”

“…In contrast to Blondiau et al (2016), the weights now also depend on the ownership form of the ANSP. Multiple assumptions are possible including (1) a public company which strives for socially optimal decisions such that the sum of consumer and producer surplus are maximized, so setting = ; = 0 ; (2) a public company that may attach a higher value to NI as a result of lobbying or fraud > 0 ; or (3) a private company " #$%& which could be influenced by the type of shareholders.…”

Coordinated capacity and demand management in a redesigned Air Traffic Management value-chain

“…Several previous Single European Sky ATM Research (SESAR) Long-Term and Innovative Research (WP-E) projects have addressed some related problems, which might, to a certain extent, be relevant in the context of COCTA research. ACCHANGE, analysed, among other aspects, potential paths for change in ATM in Europe, using two-stage network congestion games (Blondiau et al, 2016). The results suggest that vertical integration between ANSPs and AOs may succeed in accelerating change as long as ANSPs are permitted to charge for improved quality, such as reduced congestion (Adler et al, 2014).…”