The opening of direct flights across the Taiwan Strait: the impact on the global role of Taiwan’s international airport

Scheduled direct flights between Taiwan and Mainland China were halted for six decades and restarted in December 2008. The Taiwan’s government has a policy of developing Taoyuan International Airport (TPE), the major international airport in Taiwan, as one of main hubs in East Asia, based on the airport’s access to Mainland China. To assess whether the airport is progressing toward meeting the set expectation, this study evaluates the changes in airline networks of the TPE after the opening of direct flights across the Taiwan Strait. The time-dependent earliest arrival time algorithm is applied to global flights in 2004, 2008, and 2012. Empirical evidence demonstrates that providing direct flights across the Taiwan Strait has significantly increased accessibility from TPE to airports in China, but did not improve the centrality of TPE. Additionally, the transfer dependency of TPE on other airports is increasing significantly. This result was based on two major reasons: the first involves the Chinese government’s refusal to allow Chinese citizens to use airports in Taiwan as transfer points to and from other countries and the second reflects the competitiveness among airports and airlines in the region. The key finding is that political exclusion of airline use by external governments via travel regulations adversely influences the development of an airport as a global hub.     

Policy issues and planning of UK regional airports

The principal motivation for this paper is to examine the policy issues for UK regional airports within the air transport system with particular reference to airport airline relationships. The geography of airline route networks is considered a key factor that determines location of the pressure for infrastructure development. Regional airports policy is considered in this context. The problems of the resultant concentration of air traffic has largely been ignored up until now and so this paper seeks highlight the issues this presents to policy makers. The paper reviews the changing regional airport ownership patterns and examines a range of implications. It then explores the policy implications for the future regulation and development of the air transport system. The authors contend that regulation and the planning system are the only two remaining policy levers for government to guide privately owned airlines, privately owned airports and commercialised airports towards national policy goals.     

Airport ownership and regulation in Spain: Explaining the resistance to change

This paper presents the case of Spain where the government recently decided to float 49% of the capital of the public agency in charge of the airport system but to keep the public control over airports. The research question is why did a conservative government prefer to keep a unified hierarchical public structure at the time it was starting to be perceived as an outmoded model? To answer this question we propose five hypothesis taken from political science and policy process theories and we confirm that ideas and beliefs within the policy subsystem together with the external shock of the 2008 economic crisis played a role in favor of policy change. However, core values of statewide political parties and political interests with regard to avoid higher territorial decentralization explain the policy reversal. Empirical results are based on the views of political and economic actors, both in favor and against the status quo, with regard to the propositions expressed in the hypothesis.     

Hub airport slot Re-allocation and subsidy policy to speed up air traffic recovery amid COVID-19 pandemic --- case on the Chinese airline market

With international air travels largely banned around the world amid the global COVID-19 pandemic, many gateway and hub airports have more ideal slots available for reallocation. Airport traffic recovery replaces airport congestion to become the primary challenge of major airports around the world. With the pandemic well controlled domestically in China, the government liberalizes the hub airport slots for those previously forbidden services to the small/regional airports. This paper thus analytically examines the effect of this slot liberalization. The government subsidy to the small airports has also been considered. It is found that the slot liberalization can speed up airport traffic recovery for both hub and small airports. The hub airport slot liberalization leads to a lower level of minimum subsidy to sustain the survival of the small airports. Given any fixed level of subsidy to the small airport, both the total airport traffic and social welfare would improve with the slot liberalization at the hub airport. When the government can adjust the level of subsidy after liberalizing the hub airport slots, the subsidy could be excessive, if the government emphasizes too much on airport traffic recovery. This would, however, harm the overall social welfare.     

Institutional design and governance of airport regulators: The case of Latin America

This paper offers a cross-country assessment of the governance of airport regulators in Latin America. The analysis links the institutional design of airport regulators, whether in the form of independent regulatory agencies or government departments, to their overall governance. It examines four dimensions of regulatory governance: autonomy, transparency, accountability, and bureaucratic quality. Independent regulatory agencies in the Latin American airport sector seem to provide a better framework for transparency and bureaucratic quality than government departments. It is not conclusively found, however, that independent regulatory agencies contribute to a more autonomous decision-making or to an enhanced accountability of regulators to other branches of government and airport users. Overall, governance indicators of airport regulators in Latin America are well below the threshold that defines good governance.     

Airport slot allocation: a time for change?

The increasing imbalance between airport capacity and traffic resulted in exceptional congestion and delays drawing the attention of aviation policy makers towards airport demand management for the allocation of scarce airport slots. Attempts to bring forward airport demand management measures in the form of airport slot allocation were not widely adopted and have not flourished in practice. This paper aims: (i) to apply a methodological framework for the selection of the most suitable slot allocation strategy for various types of airports, (ii) to explore potential impacts such that measures or strategies can bring about, and (iii) to assess the suitability of the existing airport pricing scheme and the potential implementation of a new policy regime aiming to bridge the gap between growing traffic and scarce airport capacity.     

Managing New Zealand's airports in the face of commercial challenges

This paper explores commercial issues surrounding managing airports in New Zealand. Airport managers face pressures from changing airport–airline relationships, low cost airlines, proposed new airports and the growing importance of non-aeronautical revenues in achieving commercial goals. New Zealand's airports have moved from an operating environment within which all the principal airports were owned and managed by central government to one where airports are run as commercial entities under a variety of ownership structures. New Zealand has a high dependence on air transport and for its size, a very developed regional airport network.     

New potential hubs in the South-Atlantic market. A problem of location

Hub-and-spoke networks have become very popular in the airline industry. In this paper we study the potential hub candidates in the South-Atlantic market if a future process of liberalization creates a common air market area between South America and Europe. The analysis is based on the principal operating strategies that airlines consider when they choose their network configuration: central location in the market, local traffic at the hub cities and airport facilities. Traffic levels, great circle distances between the airports and other variables are used to analyze possible differences among airports. Other implications concerning the agents involved like gains in frequencies, time penalties and burden of capacity are also explored. Results of the analysis are used to extract some policy considerations and to stimulate discussion by government officials, air industry analysts and academics, about the necessity of the introduction of more liberalized measures in emergent markets.     

Is economics good for aviation policy? Some problems in bridging the gap between theory and policy

This paper argues that airport economics is based on the concept of economics as the positive value free science of efficient allocation of scarce resources with given wants, ignoring the approach of economics as a moral science. It assesses critically the results on major policy issues. Although there is strong empirical evidence of natural monopoly of airports, no consensus has emerged. The effects of privatisation have been assessed in terms of cost efficiency, but not in terms of economic welfare and distribution. While airport economics has made theoretical progress, the policy recommendations on single versus dual till are less relevant than those from the older models. Airport expansion is assessed in many cases by economic impact studies instead of cost benefit analysis. Economists applying impact analysis, have contributed to an irrational policy discussion. The role for morals in the management of airports has been neglected, although there is evidence that incentives might backfire. The paper argues that airport economics based on economics as a moral science could improve airport economics, and make its policy recommendations more relevant.     

Privatisation and commercialisation: Changes in UK airport ownership patterns

This paper examines changes in airport ownership patterns with reference to UK municipal airports. The implications of commercialisation and privatisation are explored at a national level. General issues and impacts that may serve as a guide to policy makers worldwide are identified. The need for countries to have a strategic airports policy to guide development towards national economic and environmental goals is highlighted. The paper concludes that a uniform pattern of privatised airport ownership offers benefits from economic, policy and planning perspectives. © 1999 Elsevier Science Ltd. All rights reserved     

Mutual influence across routes using a common airport: The case of the domestic market in Japan

This paper empirically investigates the mutual influence of traffic volumes across routes serving the same airport. Regression analysis using the data on Japan's domestic air transport market reveals that an increase in passengers on a given route has a positive effect on the number of passengers on other routes that share an endpoint airport with the given route. This result implies that a change in policy for an airport is likely to influence routes that do not serve that airport as well as the routes that do.     

Aviation planning policy in Australia: Identifying frames of reference to support public decision making

Aviation planning policy in Australia, particularly as it pertains to the expansion of privatized capital city airports, continues to be problematic as a result of legislation that requires federal approval for infrastructure-related projects on airport land, but only requires other stakeholders, such as state and local governments, together with resident groups, to be consulted. This study employs Q-methodology to identify the frames of references held by those participating in the Australian aviation stakeholder arena to develop a better understanding of the context in which existing federal policy sits and to allow airport planners to navigate their way through the views of relevant stakeholders. The identification of these frames of reference across three Australian capital city airports also revealed two underlying nation-wide discourses of ‘power’ and ‘functionality’ pertaining to utilization of the airport space, and aviation in general. These outcomes, though not providing a solution to existing controversies relating to airport expansion, nevertheless concretize the prevailing discourses that should be addressed when formulating and enacting aviation planning policy across the nation.     

An assessment of delivery changes for UK terminal air navigation services

In order to meet government contestability policy ambitions, the United Kingdom Civil Aviation Authority (CAA) has undertaken a range of initiatives to create a competitive market for terminal air navigation services (TANS). This paper examines the critical dynamics underlying recent TANS service delivery changes at the nine United Kingdom airports that fall within the Single European Sky performance scheme (SES) using industry data and Porter's five forces model. Interviews with CAA, NATS and airport operators, along with publically available material, are used to explore the various elements impacting competition for TANS at these airports. Competition is intense among a very small number of companies. In addition to optimizing service cost, airport operators require greater value for money including alignment to strategic-operational goals, closer integration with other airside functions and payment structures that are performance based. Gatwick and Birmingham airports changed service provisions due to concerns about the value for money proposition offered by NATS Services Ltd (NSL). This paper also illustrates how competition has changed the customer orientation of NSL. It has been forced to evolve quickly from an expensive, perceived as somewhat arrogant, organisation to one that must be capable of aligning to the cost and service requirements of its customers. Importantly for the ATM industry this paper provides evidence that competition drives lower service costs and provides greater value for money for airlines and airport operators.     

Success factors for the privatisation of airports—an airline perspective

This article examines different approaches to airport privatisation. It shows that privatisation can only be a success when government provides a suitable regulatory framework prior to privatisation. This framework must protect the interests of the consumer and ensure the participation of airlines as primary users in the privatisation project, thus establishing a solid basis for a strong partnership between the airlines and the airport. To accomplish this, the monopoly income of an airport should be subject of a price cap mechanism following the single till principle, best being set up in cooperation with the airlines and controlled by an independent regulator.     

Regional airport choice: Consumer behaviour and policy implications

The analysis of origin airports in multi-airport regions has a well established tradition in transportation and regional economics. The main goal of the paper is to estimate the importance of the different attributes that determine origin airport choice. In our case we adopt a stated preference approach to study this problem and evaluate the effects of possible policy interventions. We also perform a detailed segmentation of the sample studied according to the socio-economic variables that prove statistically relevant when interacted with the attributes used to characterise airport choice. Moreover, in order to test for the presence of heterogeneity in agents’ preferences we estimate several mixed logit models with different specifications, including heteroscedasticity and error component. With respect to previous studies we develop and extend the traditional SP approach by also analysing the role and relevance of attribute cut-offs in this research field. The policy simulations produced are based on the estimation of airport-specific attributes. The study concentrates on a multi-airport region in central Italy where four competing airports are located.     

The impact of airport parking fees on the tourist's airport/airline choice behavior

This paper analyzes the airport/airline choice behavior of tourists for Saxony/Germany. We employ flexible parametric choice methods (mixed logit) in order to test the effect of standard attributes on the choice probability. In addition we extend existing literature with the introduction of parking charges in the choice experiment. Our results show a significant and negative impact of parking charges on airport choice probability. Thus, we can compute high elasticities of parking charges for tourists. These results suggest, that airport managers have in form of parking policies a powerful policy instrument as they can directly affect the size of the airport catchment area.     

Substitution and complementarity in aviation: airports vs airlines

In this paper a model concerning substitution and complementarity on the linkage between airport facilities and airlines from the viewpoint of pricing policy is formulated. This model is used to analyze whether airport pricing policies, e.g. to ensure cost recovery, are compatible with competition for transfer passengers. It is found that airports with a high volume of demand can pursue cost recovery and still be the most preferred hub. Airports with a low level of demand will not be the preferred hub, even if the larger airport charges higher taxes to recover costs.     

Future airport terminals: New technologies promise capacity gains

The changing dynamics of passenger processes in future airport terminals resulting from pressures from both the demand and supply side are analyzed in this paper. Short and long term (beyond 2020) developments are studied following technology advances and business plans of airlines and airports. Key technologies affecting the central passenger processing functions include identity management and biometrics, Near Field Communications, Big Data analytics and smartphone applications. A simulation model is developed and used to assess the impact of forthcoming changes on the airport's departure hall. Lisbon Portela airport is used as case study. It is shown that passenger process times at the check-in and security checkpoints are significantly reduced, due to the introduction of passenger facilitation processes, under a range of behavioral, technological and policy uncertainties. The most salient implication of these reductions is the quantified capacity gains in the building which question the need for terminal expansion.     

Leisure travel in Europe and airline business models: A study of regional airports in Great Britain

Tourism and air transport are explicitly linked especially in the context of leisure traffic. This paper highlights this relationship by focusing on the impact of the three main airline business models (traditional scheduled, charter and low-cost) on regional airports using Britain as a case study. The panel data econometric results show that despite the current perception, low cost carriers are not the only ones to contribute significantly to airport aeronautical and non-aeronautical revenue. This observation has important policy implications and calls for transparency in airport subsidies as argued in the conclusion.     

Integrating transport into ‘joined-up’ policy appraisal

In 1998 the UK Government published the first Transport White Paper for over 20 years, A New Deal for Transport; Better for Everyone. The document emphasised the need for joined-up policy thinking and for co-ordinated action across different areas of government, a theme that has been taken up in many subsequent policy documents issued by central government. The paper explores the extent to which ‘joined-up thinking’ is evident in practice, both in the ways in which transport measures are appraised (e.g. do they fully take into account non-transport impacts?), and in appraisals in other policy areas with significant transport impacts.It does so by examining appraisal frameworks in different sectors, and identifies a number of current weaknesses. It then builds on these examples to propose ways in which an integrated policy appraisal framework could be developed. This would aim to identify not only the comparative cost-effectiveness of different transport measures in fulfilling policy objectives, but also the relative contribution that different areas of government could make—including transport—to the delivery of over-arching policy objectives, such as sustainable development, social exclusion and regeneration.