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Competition, vertical relationship and countervailing power in the UK airport industry

Author

Listed:
  • Anna Bottasso

    (University of Genova)

  • Martina Bruno

    (University of Genova)

  • Maurizio Conti

    (European Commission, Joint Research Centre (JRC))

  • Claudio Piga

    (Keele University)

Abstract

In this paper, we study whether competition in the airport market and the vertical interactions between upstream airports and downstream airlines influence the airport pricing decisions. Using a panel of the 24 largest UK airports, as well as a refined definition of airports’ market structure, we find that lower concentration in an airport’s catchment area and higher airlines countervailing power are associated to lower aeronautical charges.

Suggested Citation

  • Anna Bottasso & Martina Bruno & Maurizio Conti & Claudio Piga, 2017. "Competition, vertical relationship and countervailing power in the UK airport industry," Journal of Regulatory Economics, Springer, vol. 52(1), pages 37-62, August.
    • Handle: RePEc:kap:regeco:v:52:y:2017:i:1:d:10.1007_s11149-017-9332-z
    DOI: 10.1007/s11149-017-9332-z
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    References listed on IDEAS

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    Cited by:

    1. Bergantino, Angela Stefania & Intini, Mario & Volta, Nicola, 2021. "The spatial dimension of competition among airports at the worldwide level: a spatial stochastic frontier analysis," European Journal of Operational Research, Elsevier, vol. 295(1), pages 118-130.
    2. Bottasso, Anna & Conti, Maurizio & Vannoni, Davide, 2019. "Scale and (quasi) scope economies in airport technology. An application to UK airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 125(C), pages 150-164.
    3. Ho, Chun-Yu & McCarthy, Patrick & Wang, Yanhao, 2021. "Competition and countervailing power: Evidence from the China Eastern and Shanghai Airlines merger," Journal of Air Transport Management, Elsevier, vol. 91(C).
    4. Pagliari, Romano & Graham, Anne, 2019. "An exploratory analysis of the effects of ownership change on airport competition," Transport Policy, Elsevier, vol. 78(C), pages 76-85.
    5. Martimort, David & Pommey, Guillaume & Pouyet, Jerome, 2022. "Optimal regulation design of airports: Investment incentives and impact of commercial services," Transportation Research Part B: Methodological, Elsevier, vol. 164(C), pages 25-44.
    6. Oster, Clinton & Strong, John, 2021. "Economic effects of shifting airport activity in the Los Angeles metro region," Research in Transportation Economics, Elsevier, vol. 88(C).
    7. Volodymyr Bilotkach & Harry Bush, 2020. "Airport competition from airports’ perspective: Evidence from a survey of European airports," Competition and Regulation in Network Industries, , vol. 21(3), pages 275-296, September.
    8. Pagliari, Romano & Graham, Anne, 2020. "Airport competition within the Scottish lowlands region," Research in Transportation Economics, Elsevier, vol. 79(C).
    9. Bergantino, Angela Stefania & Intini, Mario & Volta, Nicola, 2020. "Spatial competition and efficiency: an investigation in the airport sector," The Warwick Economics Research Paper Series (TWERPS) 1287, University of Warwick, Department of Economics.
    10. Choo, Yap Yin & Corbo, Leonardo & Wang, Kun, 2018. "Joint impact of airline market structure and airport ownership on airport market power and profit margin," Transport Policy, Elsevier, vol. 72(C), pages 67-78.

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    More about this item

    Keywords

    Airport; Competition; Countervailing power; Vertical relations;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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