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Privatisation and ‘Light-Handed’ Regulation: Sydney Airport

Author

Listed:
  • Michael O'Donnell
  • Miriam Glennie
  • Peter O'Keefe
  • Seung-Ho Kwon

Abstract

This paper examines the privatisation of Sydney Airport and the regime of ‘light-handed’ monitoring of service quality and airport charges that followed the sale in 2002. The arguments for privatisation are reviewed, in particular the need for increased competition and/or appropriate regulation where a former public monopoly, such as Sydney Airport, is sold. The aftermath of the privatisation of the airport has led to complaints by the major airlines and consumers of ever increasing charges for use of the airfield and for car parking and other services. This highlights that the ‘light-handed’ monitoring regime has not constrained the airport's ability to charge monopoly rents. The aftermath of privatisation has resulted in labour shedding, outsourcing and a focus on cost minimisation by the airport's management.

Suggested Citation

  • Michael O'Donnell & Miriam Glennie & Peter O'Keefe & Seung-Ho Kwon, 2011. "Privatisation and ‘Light-Handed’ Regulation: Sydney Airport," The Economic and Labour Relations Review, , vol. 22(1), pages 65-80, May.
    • Handle: RePEc:sae:ecolab:v:22:y:2011:i:1:p:65-80
    DOI: 10.1177/103530461102200104
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    References listed on IDEAS

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    1. Productivity Commission, 2006. "Review of Price Regulation of Airports Services," Inquiry Reports, Productivity Commission, Government of Australia, number 40.
    2. John Quiggin, 1995. "Does Privatisation Pay?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 28(2), pages 23-42, April.
    3. Stephen King & Rohan Pitchford, 1998. "Privatisation in Australia: Understanding the Incentives in Public and Private Firms," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 31(4), pages 313-328, December.
    4. Schuster, Dominic, 2009. "Australia's approach to airport charges: The Sydney Airport experience," Journal of Air Transport Management, Elsevier, vol. 15(3), pages 121-126.
    5. Forsyth, Peter, 2002. "Privatisation and regulation of Australian and New Zealand airports," Journal of Air Transport Management, Elsevier, vol. 8(1), pages 19-28.
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    Cited by:

    1. Lohmann, Gui & Trischler, Jakob, 2017. "Licence to build, licence to charge? Market power, pricing and the financing of airport infrastructure development in Australia," Transport Policy, Elsevier, vol. 59(C), pages 28-37.
    2. Arblaster, Margaret, 2014. "The design of light-handed regulation of airports: Lessons from experience in Australia and New Zealand," Journal of Air Transport Management, Elsevier, vol. 38(C), pages 27-35.
    3. Littlechild, Stephen, 2018. "Economic regulation of privatised airports: Some lessons from UK experience," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 100-114.
    4. Yang, Hangjun & Fu, Xiaowen, 2015. "A comparison of price-cap and light-handed airport regulation with demand uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 73(C), pages 122-132.

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