The impact of airport competition on technical efficiency: A Stochastic Frontier Analysis applied to Italian airports

We investigate how the intensity of competition among airports affects their technical efficiency by computing airports’ markets on the basis of a potential demand approach. We find that the intensity of competition has a negative impact on airports’ efficiency in Italy during the 2005–2008 period. This implies that airports belonging to a local air transportation system where competition is strong exploit their inputs less intensively than do airports with local monopoly power. Furthermore, we find that public airports are more efficient than private and mixed ones. Since public airports take into account the positive externalities created by air transportation in the local economy, they are more willing to subsidize airlines in developing the airports’ connections. Hence, policy makers should provide incentives to implement airports’ specialization in local systems where competition is strong. Moreover, when regulating airport charges, they should take into account the impact of the above externalities.Airport efficiency; stochastic distance function; airport competition

Price asymmetries in European airfares

This research analyses airlines' pricing decisions in response to changes in the market conditions. We estimate the effects of jet fuel price changes on European airfares at airline/route level by discriminating on the grounds of supplied capacity and markets’ competitive structure. Our results show that airlines tend to adjust fares asymmetrically following a “rocket and feather” behaviour. The asymmetric pricing is marked in periods of decreasing capacity when the increases of fuel price are passed at a higher degree than fuel cost savings. In contrast, when capacity increases the asymmetry is lowered. Moreover, we show that highly competitive markets are characterized by a lower price asymmetry compared to low competition markets. Finally, our results show that airline price asymmetry reaches its maximum when capacity is reduced and competition is low

Profitability change in the global airline industry

This paper studies airline profitability change computed through a Bayesian estimation of a cost function. The stochastic frontier is applied to a dataset including the largest worldwide airlines in the period 1983–2010. We show that productivity change is mainly driven by technical change becoming continuously positive from early 1990s. Furthermore, in the last decade profitability change is mainly driven by input price change which exhibits a similar pattern to output price change. In presence of productivity growth, the output price increase is lower than the input price increase suggesting that part of productivity gains are transferred from airlines to consumer

A cost-efficiency analysis of European air navigation service providers

Air Navigation Service Providers (ANSPs) as the third major component of the aviation industry have been less of a focus in research than their airline and airport counterparts. In this paper we analyse European ANSPs cost structures using a stochastic frontier analysis approach within a Bayesian estimation framework in order to incorporate regularity conditions. Our results show that ownership is not directly impacting neither the ANSPs cost structures nor their cost efficiencies and that the European ANSPs are operating on the increasing return to scale part of the technology, hence supporting the choice of ANSPs agglomeration

Competition among airports at worldwide level: a spatial analysis

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Spatial competition and efficiency : an investigation in the airport sector

This paper analyses the potential impact of airport competition on technical efficiency by applying the spatial stochastic frontier approach (SSFA) rather than traditional model (SFA). The SSFA allows to isolate the cross-sectional spatial dependence and to evaluate the role of intangible factors in influencing the airport economic performance, through the inclusion of the distance matrix and the shared destinations matrix, calibrated for different distances. By analysing statistical differences between the traditional and the spatial model, it is possible to identify the competition effects. This study includes 206 airports at worldwide level. First, the results show the existence of the spatial component, that could not be otherwise captured by the traditional SFA. Moreover, airport competition is found to affect the efficiency level with either a positive or a negative effect, depending on the distance considered in the spatial model

The multi-airline p-hub median problem applied to the African aviation market

Despite growth in research on air transport in Africa in recent years, little is known about the adequacy of the infrastructure to sustain potential future air traffic expansion. The continent has experienced growth in domestic, intra- and inter-continental air traffic services over the past two decades that we project will continue over the medium term. Applying a gravity model in which corruption, conflict, common language and land-locked indices contribute to the demand estimation, we forecast annual intra-African growth of 8.1% up to 2030. As witnessed in established markets, deregulation will likely result in hub-spoke network designs in order to accommodate demand efficiently if mobility and access is to be encouraged. In this research, we modify the p-hub median problem in order to identify multiple, economically viable, hub-spoke networks that would adequately serve the intra- and inter-continental demand for air transport. Aside from current hubs, namely Cairo (Egypt), Addis Ababa (Ethiopia) and Johannesburg (South Africa), future hubs could include airports in the North that serve European-African flows, such as Algiers, and Nigeria in the West due to its relatively large population and wealth. By 2030, we also find that demand is sufficient to justify an additional hub in central Sub-Saharan Africa, such as Lusaka (Zambia). However, this would be dependent on the implementation of liberalisation policies as set out in the Yamoussoukro Decision

The impact of airport competition on technical efficiency: A Stochastic Frontier Analysis applied to Italian airports

We investigate how the intensity of competition among airports affects their technical efficiency by computing airports’ markets on the basis of a potential demand approach. We find that the intensity of competition has a negative impact on airports’ efficiency in Italy during the 2005–2008 period. This implies that airports belonging to a local air transportation system where competition is strong exploit their inputs less intensively than do airports with local monopoly power. Furthermore, we find that public airports are more efficient than private and mixed ones. Since public airports take into account the positive externalities created by air transportation in the local economy, they are more willing to subsidize airlines in developing the airports’ connections. Hence, policy makers should provide incentives to implement airports’ specialization in local systems where competition is strong. Moreover, when regulating airport charges, they should take into account the impact of the above externalities

Indici per la valutazione della qualit? ecologica dei laghi

Methods are presented to evaluate the biological quality of Italian lakes based on phytoplankton, macrophytes, fishes, benthic fauna and hydromorphology

Banca dati relativa al monitoraggio dei laghi

A relational database was set up to host the high resolution biological, cvhemical and hydromorphological data produced within the InHabit project. Based on previous partial databases (Deliverables I1d2 and I1d3) the database was built using PostgreSQL, an Open Source Relational Database Management system. The data base contains information on the habitat surveys, information on lake water chemistry and the four biological quality elements quoted in the Annex V of the Directive 2000/60/EC (Water Framework Directive) for lakes: phytoplankton, macrophytes, benthic macroinvertebrates and fishes. With respect to the previous databases, more temporal and taxonomical resolution is provided. At the moment, Lake Habitat survey information are available for 13 lakes and or reservoirs, totaling 170 habitat plots an 170 inter-plot shore descriptions. Chemical data are available for 13 lakes and 258 samples. For what concern the biological quality elements, phytoplankton (58 samples and 281 taxa), macrophyte (94 samples and 20 taxa) and benthos (28 sample and 177 taxa) data are stored at the species level, while fish data are stored at the speciemen level (607 specimen, belonging to 29 species in 16 samples).Questo rapporto descrive la banca dati relazionale predisposta per i dati ad alta risoluzione provenienti dai laghi all?interno del progetto InHabit. Per evitare l?uso di software proprietario, la banca dati ? stata scritta usando il software PostgreSQL, un gestore di database relazionali disponibile con licenza Open Source. La banca dati ? predisposta sulla base dei precedenti database parziali (deliverables I1d2 e I1d3) per contenere i dati relativi alla descrizione degli habitat lacustri secondo il metodo del Lake Habitat Survey, e i dati ad alta risoluzione raccolti nella campagna di monitoraggio, con una risoluzione tassonomica e temporale maggiroe rispetto alle banche dati precedenti. Al momento di scrivere questo rapporto, erano disponibili informazioni di tipo idromorfologico per 13 laghi o invasi, per un totale di 170 osservazioni puntuali di habitat e 170 descrizioni della sponda tra un punto di rilevamento e l?altro. Inoltre, la banca dati contiene i risultati delle analisi chimiche di 258 campioni di acqua dei 13 laghi del progetto. Per gli elementi biologici di qualit?, i dati sono stati archiviati a livello di specie per il fitoplancton (58 campioni e 281 taxa), le macrofite (94 campioni e 20 taxa) e il benthos (28 campioni e 177 taxa), mentre nel caso dei pesci sono stati archiviati i dati a livello di singolo individuo campionato, (607 pesci di 29 specie 16 campioni)