Congestion Pricing and Capacity for Partially Privatised Airports

This study investigates congestion pricing and capacity for partially privatised airports. We characterise the optimal pricing rules of three alternatives (mix pricing, single pricing per flight and single pricing per passenger) for airports with different ownerships. Our specified function approach finds that mix pricing endogenously chosen by local welfare (LW)-maximising airports may lead to the greatest social welfare, but that chosen by airline–airport joint-profit (JP)- or airport profit (AP)-maximising airports cannot. Our general function approach shows that LW- and AP-maximising airports, using single pricing per flight or per passenger, may achieve efficient investments; JP-maximising airports using mix pricing will achieve efficient investments.