The Spanish Airport-System: Lessons of Efficiency and Sustainability

Abstract

This paper focuses on comparing the efficiency of the Spanish airports for four years (2009 to 2012). The Spanish airports are government owned and managed (AENA) under an airport-system network where non-profitable airports are cross-subsidized by profitable airports. The main discussion is if the decision-making process based on the centralisation of management may influence the efficiency of airports (technical efficiency). Furthermore, a financial analysis is performed to compare which airports although being not profitable from an accounting perspective may be using their current resources (infrastructure) efficiently. Since airports achieving profits cross-subsidized the ones that achieve negative gross margin, it could be discussed that airports with negative gross margins when technically efficient could obtain better financial results if competition is allowed. The methodology to calculate the technical efficiency level of the Spanish airports is based on non-parametric models DEA (Data Envelopment Analysis). The results show that the improvements among the years in the gross margin of the larger airports (such Barcelona and Madrid) are not a fair and true reflection their current operational performance, but a result of a centralised making-decision process (centralised management) among investments; depreciation and air fares. The results also show that airports increase significantly their technical efficiency when competing with similar-size airports, being the medium airports the ones that experience a higher increase of efficiency.

Airports’ public infrastructure and sources of inefficiency

“…Unfortunately, there are no further data published. For insights regarding SFA and DEA, specifically the Spanish airports, see Ripoll-Zarraga (2018), who widely discusses the lack of transparency of AENA. For example, there are few notes to the annual reports, but without information regarding the number, type of employees or other relevant indicators.…”

“…Previous Spanish studies have yet to assess the data. Except for Ripoll-Zarraga (2018), Spanish airports' studies have not accounted for reliable depreciation proxies. These are extracted from AENA's financial statements without questioning or critically assessing the reliability of the data, for example, amortisation of non-current assets (Martin and Roman, 2001, 2006) and book value (for example, Murillo-Melchor, 1999; Coto-Millán et al.…”

“…Rent expenses (Parker, 1999) are not an ideal proxy when infrastructure is not financed through leasing. Following Ripoll-Zarraga (2018), AENA depreciation data are disregarded. Instead, air transport depreciation standard coefficients are applied (International Accounting Standards [IAS] (https://www.iasplus.com/en/standards/ias) and International Financial Reporting Standards [IFRS] (https://www.ifrs.org/issued-standards/list-of-standards/).…”

“…Rent expenses (Parker, 1999) are not an ideal proxy when infrastructure is not financed through leasing. Following Ripoll-Zarraga (2018)…”

“…The lack of individual public data and AENA's strong centralised management not enhancing competition, along with a board of politicians rather than professionals, ends with a high number of regional airports without traffic, questioning the requirement of public investment for connectivity purposes, as per having alternative travel modes (high-speed train and motorways) and per increasing public deficit. Indeed, Ripoll-Zarraga (2018) and Ripoll-Zarraga and Mar-Molinero (2020) used Data Envelopment Analysis (DEA) and demonstrated that the AENA depreciation-published data does not correspond to the use of capacity in developing traffic. Consequently, the previous findings may be biased, i.e.…”