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Estimating the impact of airport privatization on airline demand: AÂ regression-based event study

Author

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  • Rolim, Paula S.W.
  • Bettini, Humberto F.A.J.
  • Oliveira, Alessandro V.M.

Abstract

This paper develops an empirical model of passenger demand for routes of airports subject to either imminent or recent privatization. We investigate whether the privatization process produces a sequential impact over traffic. By employing a regression-based event methodology and controlling for fixed effects, price endogeneity and sample selection, we perform an econometric analysis of pre-privatization and post-privatization dynamic patterns of demand to infer the demand consequences of the major change in airport governance. We examine recent Brazilian airport privatization experience as a case. The main results suggest that privatization produced an overall increase in airline demand and that the airport notably recognized with the greatest demand potential and with the largest market penetration of a fast-growing low cost newcomer had the highest estimated ceteris paribus effect of privatization on demand.

Suggested Citation

  • Rolim, Paula S.W. & Bettini, Humberto F.A.J. & Oliveira, Alessandro V.M., 2016. "Estimating the impact of airport privatization on airline demand: AÂ regression-based event study," Journal of Air Transport Management, Elsevier, vol. 54(C), pages 31-41.
    • Handle: RePEc:eee:jaitra:v:54:y:2016:i:c:p:31-41
    DOI: 10.1016/j.jairtraman.2016.03.019
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    Cited by:

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    2. Oliveira, Bruno F. & Oliveira, Alessandro V.M., 2022. "An empirical analysis of the determinants of network construction for Azul Airlines," Journal of Air Transport Management, Elsevier, vol. 101(C).
    3. Tascón, Diana C. & Díaz Olariaga, Oscar, 2021. "Air traffic forecast and its impact on runway capacity. A System Dynamics approach," Journal of Air Transport Management, Elsevier, vol. 90(C).
    4. Oscar Díaz Olariaga & Carlos Alonso‐Malaver, 2022. "Impact of airport policies on regional development. Evidence from the Colombian case," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(6), pages 185-210, December.
    5. Aguirre, Julio & Mateu, Pedro & Pantoja, Chrissie, 2019. "Granting airport concessions for regional development: Evidence from Peru," Transport Policy, Elsevier, vol. 74(C), pages 138-152.
    6. Graham, Prof Anne, 2020. "Airport privatisation: A successful journey?," Journal of Air Transport Management, Elsevier, vol. 89(C).
    7. Marques Junior, Carlos Higino & Eller, Rogéria de Arantes Gomes & Oliveira, Alessandro V.M., 2018. "Are passengers less willing to pay for flying turboprops? An empirical test of the “turbo aversion hypothesisâ€," Journal of Air Transport Management, Elsevier, vol. 73(C), pages 58-66.
    8. B. F. Oliveira & A. V. M Oliveira, 2023. "An empirical analysis of the determinants of network construction for Azul Airlines," Papers 2312.05630, arXiv.org.
    9. Arbolino, Roberta & Carlucci, Fabio & Cirà, Andrea & De Simone, Luisa & Ioppolo, Giuseppe & Yigitcanlar, Tan, 2018. "Factors affecting transport privatization: An empirical analysis of the EU," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 149-160.
    10. Y. X. Lee & Z. W. Zhong, 2016. "A study of the relationship between adverse weather conditions and flight delay," Journal of Advances in Technology and Engineering Research, A/Professor Akbar A. Khatibi, vol. 2(4), pages 112-117.
    11. Yun Li & Moming Li & Megan Rice & Haoyuan Zhang & Dexuan Sha & Mei Li & Yanfang Su & Chaowei Yang, 2021. "The Impact of Policy Measures on Human Mobility, COVID-19 Cases, and Mortality in the US: A Spatiotemporal Perspective," IJERPH, MDPI, vol. 18(3), pages 1-23, January.

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    More about this item

    Keywords

    Airports; Privatization; Demand; Econometrics; Endogeneity;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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