Reconsidering the regional airport network in Norway

Mathisen, Terje Andreas; Solvoll, Gisle

doi:10.1007/s12544-011-0066-1

Cited by 14 publications

(7 citation statements)

References 12 publications

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“…Many federal and local governments across the globe have decided to withdraw gradually from financing regional airports (Mathisen and Solvoll, 2012;van den Berg et al, 1996). It is therefore critical to assess their economic contribution in a wider economic and social context, rather than focus on a mere assessment in profit margin terms.…”

Section: Introductionmentioning

confidence: 99%

Regional aviation and economic growth: cointegration and causality analysis in Australia

Baker

Merkert

Kamruzzaman

2015

Journal of Transport Geography

214

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a b s t r a c tAir transport is a critical link to regional, rural and remote communities in Australia. Air services provide important economic and social benefits but very little research has been done on assessing the value of regional aviation. This research provides the first empirical evidence that there is short and long run causality between regional aviation and economic growth. The authors analysed 88 regional airports in Australia over a period of 1985-86 to 2010-11 to determine the catalytic impacts of regional air transport on regional economic growth. The analysis was conducted using annual data related to total airport passenger movements -for the level of airport activity, and real aggregate taxable income -to represent economic growth. A significant bi-directional relationship was established: airports have an impact on regional economic growth and the economy directly impacts regional air transport. The economic significance of regional air transport confirms the importance of the airport as infrastructure for regional councils and the need for them to maintain and develop local airports. Funding should be targeted at airports directly to support regional development.

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Section: Introductionmentioning

confidence: 99%

Regional aviation and economic growth: cointegration and causality analysis in Australia

Baker

Merkert

Kamruzzaman

2015

Journal of Transport Geography

214

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“…The remaining regional airports are in more densely populated areas, and air traffic is based on routes operated on a commercial basis. However, the road infrastructure has improved since most small airports were built approximately 45 years ago (Mathisen and Solvoll, 2012), and there is an increasing leak of passengers to the larger airports in the network where commercial routes are operated by jet planes (Lian and Rønnevik, 2011). Consequently, there is an ongoing debate on the future structure of the local airport network in Norway.…”

Section: Norwegian Airport Structurementioning

confidence: 99%

Pricing of Airport Operations

Solvoll¹,

Mathisen²

2017

Advances in Airline Economics

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It is demonstrated how an analysis of airports' cost structures and the calculation of long-run marginal costs (MC) of serving passengers and airplanes can be used as a basis for setting airport charges according to the principles of welfare economics. Based on Norwegian data, the MC for an extra passenger (PAX) and extra air traffic movement (ATM) are used to set airport charges under the assumption that the charges should be equal for all airports in the country. When adjusting the estimates to meet revenue restrictions and comparing the estimates to current charges, we observe that PAX should be charged more and ATM less. This finding is in line with recommendations from the International Air Transport Association (IATA). When allowing charges to vary between airports, we demonstrate how a Ramsey pricing approach can be applied to set differentiated PAX and ATM charges, considering both the supply side (the competitive conditions between the airlines operating at the airports) and the demand side (the passengers' price elasticity of demand).

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“…As mentioned in section 2, operations at these routes are licensed to one supplier by the PSO regime (e.g. Mathisen and Solvoll, 2012). Focusing on the Power function (Case II and discussed by Bulow and Pfleiderer (1983)), we need information on elasticity and marginal costs for airports and airlines .…”

Section: Numerical Examplementioning

confidence: 99%

Airport Charges – Interactions between Airlines and Airports

Mathisen¹,

Jørgensen²,

Pedersen³

et al. 2017

Advances in Airline Economics

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A substantial part of airports' revenues relate to charges covering the costs of services supplied by the airport. Charges are imposed on carriers, which in turn pass them or a percentage of them, on to passengers. In the present chapter special attention is given to regional airports characterized by low traffic volumes, enabling only one or a few carriers to serve each destination. A classic economic model is presented to analyse how the pass-on rate depends on supply and demand characteristics and market structure. Some illustrative examples assuming combinations of common specifications for market characteristics are also presented, showing pass-on rates ranging from 50% to more than 100%. Consequently, market structure and characteristics of carriers and passengers are decisive for how passengers experience changes in airport charges. The differences between the optimal charge from the perspectives of the airport and the welfare of society are specifically addressed. It is demonstrated that knowledge of the pass-on rate in the monopoly cases may be sufficient to infer how the mark-up will be affected by a change in marginal costs. Consequently, the understanding of the pass-on rate is relevant for airport owners and for decision-makers when considering the welfare of passengers and other politically stated goals.

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Reconsidering the regional airport network in Norway

Cited by 14 publications

References 12 publications

Regional aviation and economic growth: cointegration and causality analysis in Australia

Regional aviation and economic growth: cointegration and causality analysis in Australia

Pricing of Airport Operations

Airport Charges – Interactions between Airlines and Airports

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