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Multi-airport privatization in a Japanese region with trip-chain formation

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  • Xu, Fangzhou
  • Hanaoka, Shinya
  • Onishi, Masamitsu

Abstract

This study investigates how multi-airport privatization in a tourism region would affect the regional air transport market. An optimization model is developed to formulate the objectives of the three stakeholders, namely airports, airlines, and travelers, to evaluate the market outcomes in different cases. Leisure trip-chain travelers are specifically considered in the presented model, as such a group-level privatization approach has a greater impact on the decisions of trip-chain travelers. As a case study, we select the Hokkaido region in Japan, which is planning to privatize seven airports as a group in 2020, and estimate demand, the profits of airports and airlines, the consumer surplus, and the total surplus in the cases of public operation, airport profit maximization, and single-till and dual-till approaches. The results show that (1) multi-airports privatization enables operator to coordinate airport charges among the group to improve the total surplus. The optimal pattern of airport charges can vary according to the proportion of potential leisure demand. (2) The positive impact of airports’ pricing coordination in a dual-till approach is more limited than that in a single-till approach. (3) Airport charges may not be coordinated in the case of airport profit maximization, even when potential leisure demand is very high; this decreases the consumer surplus and total surplus.

Suggested Citation

  • Xu, Fangzhou & Hanaoka, Shinya & Onishi, Masamitsu, 2019. "Multi-airport privatization in a Japanese region with trip-chain formation," Journal of Air Transport Management, Elsevier, vol. 80(C), pages 1-1.
    • Handle: RePEc:eee:jaitra:v:80:y:2019:i:c:3
    DOI: 10.1016/j.jairtraman.2019.101690
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