The economics of airports' pricing

In this lecture, we discuss airport pricing. We begin by providing an overview of congestion pricing, understood as the welfare-maximizing pricing of the negative externality between flights. We then consider second-best pricing problems, including the self-financing airport pricing and the existence of limitations on differentiating tolls over time and firms and pricing instruments. We also look at the pricing by private airports, airport competition and capacity investments, regulation, and the role of non-aeronautical. We continue by discussing the potential equivalence of congestion pricing and slot management at congested airports. Finally, we examine how externalities other than congestion, such as environmental externalities (noise, emissions), could be incorporated into airports’ pricing schemes. We conclude by providing what we think should be the lines of future research for the airport pricing and regulation literature.

Tiziana D’Alfonso is professor at Sapienza University of Rome where she conducts research on transportation economics and policy. Her research focuses on air transport and local public transport, with a focus recently on decarbonization of the transport sector. She is author of several publications with international circulation. Her work has been honored TEE (Transatlantic Partnership for Excellence in Engineering) Marie Curie Fellow at the Center for Transportation Studies (University of British Columbia) and the Best Paper Award at the Kumho-Nectar Conference on Transportation Economics and ATRS World Conference of the Air Transport Research Society.  She holds editorial positions including associate editorship of the Journal of Air Transport Management.