AIRPORT PRICING POLICIES: AN APPLICATION TO CANADIAN AIRPORTS

Transport Canada incurs a substantial deficit from the ownership and operation of its airport system. This has stimulated discussions on ownership and user fees for the services provided by airports. This paper addresses the issue of optimal pricing of airport services, and applies it to the case of runway user charges at selected Canadian airports. Alternative pricing principles, including average cost pricing, marginal cost pricing, social marginal cost pricing, value of service pricing, Ramsey quasi-optimal pricing and peak/off-peak pricing are reviewed for their implications for economic efficiency and financial self-sufficiency. The review suggests social marginal cost pricing, which takes into account external congestion and noise costs, as being the most appropriate to apply to the airports which currently generate adequate revenue. Ramsey pricing based on social marginal costs is recommended for the airports which currently generate inadequate revenue. Both of these pricing principles require landing fee schedules that vary by airport, time of day, and type of aircraft. The paper also presents the methodologies and information required for measuring various components of social marginal costs, such as external congestion and noise costs, and derives the price elasticities of runway use from the price elasticities of air transport demand. This paper also discusses the interdependence of pricing between runway and other parts of the airport such as the terminal building, and the issue of pricing for a network of airports.

• Record URL:
  • https://catalog.hathitrust.org/Record/001070572/Home
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/10461469
• Corporate Authors:

  Transportation Research Forum

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  Transportation Research Forum

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• Authors:
  • Gillen, D W
  • Oum, T H
  • Tretheway, M W
• Publication Date: 1988

Media Info

• Features: Tables;
• Pagination: p. 28-34
• Serial:
  • Journal of the Transportation Research Forum
  • Volume: 29
  • Issue Number: 1
  • Publisher: Transportation Research Forum
  • ISSN: 1046-1469
  • Serial URL: https://trforum.org/journal-of-the-trf/
• Publication flags:

  Open Access (libre)

Subject/Index Terms

• TRT Terms: Airport runways; Airports; Economic analysis; Elasticity (Mechanics); Noise; Policy; Pricing; Traffic congestion; User charges
• Uncontrolled Terms: Congestion
• Geographic Terms: Canada
• Subject Areas: Aviation; Economics; Environment; Finance; Highways; Pavements; Policy; Society; Terminals and Facilities;

Filing Info

• Accession Number: 00479169
• Record Type: Publication
• Report/Paper Numbers: HS-040 801
• Files: TRIS
• Created Date: Jan 31 1989 12:00AM