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The economics of franchise contracts and airport policy

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  • Gillen, David
  • Morrison, William G.

Abstract

In this paper, we apply insights from the economics of franchise contracts to the governance of airports and the evolution of airport policy in Canada. Some aspects of the devolution of airports in Canada could be consistent with a ‘public franchise’ approach to airport policy. An examination of Canada's National Airport Policy and subsequent policy decisions, however, suggests that the government may have made the right decision for the wrong reasons. Applying the franchise perspective to European airport policy, recent decisions by the European Union regarding exclusive agreements between publicly owned airports and low-cost carriers suggest a departure from the incentive-compatibility requirements of franchise contracts that would promote market-based efficiency.

Suggested Citation

  • Gillen, David & Morrison, William G., 2005. "The economics of franchise contracts and airport policy," Journal of Air Transport Management, Elsevier, vol. 11(1), pages 43-48.
    • Handle: RePEc:eee:jaitra:v:11:y:2005:i:1:p:43-48
    DOI: 10.1016/j.jairtraman.2004.11.003
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    References listed on IDEAS

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    1. Mathewson, G Frank & Winter, Ralph A, 1985. "The Economics of Franchise Contracts," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 503-526, October.
    2. Starkie, David, 2002. "Airport regulation and competition," Journal of Air Transport Management, Elsevier, vol. 8(1), pages 63-72.
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    Cited by:

    1. Chia Sun, 2014. "A conceptual framework for R&D strategic alliance assessment for Taiwan’s biotechnology industry," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 259-279, January.
    2. Kenneth Button, 2020. "Studying the empirical implications of the liberalization of airport markets," Competition and Regulation in Network Industries, , vol. 21(3), pages 223-243, September.
    3. Alda Metrass Mendes & Richard de Neufville & Ã lvaro Costa, 2011. "Air Accessibility In Northern Canada: Prospects And Lessons For Remoter Communities," ERSA conference papers ersa11p1647, European Regional Science Association.

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