There is a common presumption that airport charges need to be regulated. This can lead to unwarranted intervention for many airports, when market and competitive forces could be relied on to determine charges instead. Regulators should then be able to focus their attention on key airports where there are real issues of market power.
What is clearly needed, then, is a systematic approach to identifying whether airports have significant market power. This is a necessary step to deciding if there should be regulatory intervention or not.
Frontier's latest aviation bulletin considers some of the factors that should be taken into account in that market power assessment. The bulletin highlights the need to consider different market segments, airline operating models and scarce airport capacity as part of the overall assessment.
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