Hostname: page-component-586b7cd67f-t8hqh Total loading time: 0 Render date: 2024-11-24T22:52:30.771Z Has data issue: false hasContentIssue false
  • English
  • Français

Why Privatize Airports?

Published online by Cambridge University Press:  01 January 2023

Peter Kriesler
Peter Kriesler*
Affiliation:
School of Economics, The University of New South Wales
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

This paper examines the arguments for the privatisation of airports in Australia. The general arguments for privatisation are evaluated and found not to be universally applicable. There is no a priori argument in that all activities operate optimally in the private sector. Rather, the costs and benefits of each particular case need to be examined. This is then done with respect to airports. Firstly, the question of whether airports should be operated as networks or as individual optimizing entities is considered. It is shown that with respect to both pricing and investment decisions, efficiency requires retention of the network. Due to the nature of the product, the market will not deliver an efficient, competitive outcome. In this light the specifics of the Australian privatization proposals are examined, and found wanting. The case for privatization of airports is extremely weak.

Type
Research Article
Information
The Economic and Labour Relations Review , Volume 7 , Issue 1 , June 1996 , pp. 120 - 131
Copyright
Copyright © The Author(s) 1996

References

Dwyer, L., Forsyth, P. (1992) The reform of air transport and its impact on tourism’ in Forsyth, P. (ed), Microeconomic Reform in Australia, Alien and Unwin: Sydney.Google Scholar
Favotto, I., Kearney, C., Kriesler, P., Stegman, T. (1994) ‘Network pricing versus location specific pricing of aeronautical services’ with Economic Papers, June, Vol. 13 pp. 38–52.CrossRefGoogle Scholar
Industry Commission (1992) Aviation Report, AGPS.Google Scholar
Johnson, M (1992) ‘Evaluating the privatisation of the English and Welsh water industry, The Economics and Labour Relations Review, Vol. 3 No. 2.CrossRefGoogle Scholar
Kriesler, P (1994) ‘Some issues in the analysis of investment in aeronautical services’ CAER Working Paper 1994/2, UNSW.Google Scholar
Paddon, M., Carman, M. (1994) Paying the price of privatization: The Federal Government’s FAC privatization proposal in 1994, Public Sector Research Centre, UNSW.Google Scholar
Quiggin, J (1994) Does privatisation pay?, Discussion Paper No. 2, Australian Institute, ACT.Google Scholar
Rowthorn, B (1989) ‘The Thatcher revolution’ Economic Papers, Vol. 8 No. 2.CrossRefGoogle Scholar
Rowthorn, B., Chang, H. (1992) ‘The political economy of privatisation’ The Economics and Labour Relations Review, Vol. 3 No. 2.Google Scholar
Saunders, P (1993) ‘Recent trends in size and growth of government in OECD countries’ in Gemmill, N. (ed), Public Sector Growth: Theories and Evidence, Edward Elgar: Aldershot.Google Scholar
Stegman, T (1994) ‘The pricing of aeronautical services by the Federal Airports Corporation, Australia: an assessment of the costs and benefits of a shift from network pricing strategies to location specific cost recovery’ CAER Workinq Paper 1994/3, UNSW.Google Scholar
Walters, A. A. (1978) ‘Airports-an economic survey’ Journal of Transport Economics and Policy, Vol. 12 No. 2.Google Scholar
Williams, M (1992) ‘Privatisation (asset sales) in New Zealand’, The Economics and Labour Relations Review, Vol. 3 No. 2.Google Scholar
Woods, D.F. (1971) ‘Determining general aviation airport system benefits’ Journal of Transport Economics and Policy, Vol. 5 No. 3.Google Scholar