Effect of concentration in airline market on Spanish airport technical efficiency. (May 2019)

• Record Type: Journal Article
• Authors: Hidalgo-Gallego, Soraya; Mateo-Mantecón, Ingrid
• Is Part Of: Journal of air transport management. Volume 76(2019)
• Page Start: 56
• Page End: 66
• Publication Date: 2019-05
• Subjects: Market concentration -- Technical efficiency -- Airports -- Airlines -- Stochastic frontier; Airlines -- Management -- Periodicals; Aeronautics, Commercial -- Management -- Periodicals; 387.7068
• DOI: 10.1016/j.jairtraman.2019.02.003
• Languages: English
• ISSNs: 0969-6997

Abstract

Abstract: This paper tries to measure the effect of airline market concentration on airport technical efficiency. With this aim, a Stochastic Frontier Analysis (SFA) is applied, estimating with a one-step procedure technical efficiency and the effect of airlines' market power on that efficiency. Results suggest that when airports are lowly concentrated increasing concentration reduces such inefficiencies. However, this effect practically disappears when airports are highly concentrated. Additionally, the government's policies to improve airports' performance seems to have a positive effect in the short run. Highlights: This paper examines the impact that airline market structure has on airport technical efficiency. We find that concentration has a positive impact on technical efficiency. Concentration positive effect on efficiency decreases when the level of concentration grows. Airport policies seem to work better when affect a group of airports with common characteristics than for the whole system.