Changing Frames of Reference and Regulatory Structures: French Airport Policy in Transition

Abstract

Changes in the regulatory state, the privatization of network industries in Europe and in air transport have led to a redefinition of how airports are regulated. The French model of state ownership and regulation of airports became progressively out of step with a broader European market-oriented frame of reference. A new French sectoral frame of reference was developed and became public policy in 2005. A cognitive analysis identifies the key factors and actors responsible for this shift. This article explores the nature of the changes made to adapt the French model to a European framework and examines the influence of foreign models of regulation on the design of the French model. Finally, it suggests that features of the European frame of reference for regulatory structures have been adapted within France.

The Economic Regulation of a European Hub Airport

“…Indeed, the focus of this article is not the partial privatization of ADP per se, but the effect on stakeholders of the economic regulation system. However, it can be briefly said that Aéroports de Paris’s legal status was transformed in 2005, from a public corporation to a partially divested limited company (Auby & Lombard, 2007; Villard, 2011). Along with this change, a new economic regulation framework has been decided and subsequently implemented, in which ADP’s charging principles are indexing on the retail price index minus a coefficient.…”

“…Second, since 2005 the French government has implemented a new airport policy, transforming Aéroports de Paris into a partially privatized limited company. In the same time, the French government enforced a new price-cap economic regulation (Villard, 2011), which aims to “encompass a pricing structure that is subject to specified maximum fare increases, expressed in terms of percentages that cannot exceed the difference between the Retail Price Index and a given factor X” of productivity (Betancor & Rendeiro, 1999, p. 29), instead of the former cost-plus system of cost-based (plus a reasonable, predetermined rate of return) charging principles. Finally, there is a gap in the knowledge specific to Aéroports de Paris and the French airport economic regulation in general, especially in comparison with other European regulation models.…”