Files
Abstract
This paper investigates the effects of ownership forms and management structure on the
performance of airports around the world. Specifically, we focus on measuring and comparing
productive efficiency and profitability among airports owned and operated by government
departments, 100% government-owned corporations, independent airport authorities, mixed
enterprises with government majority ownership and mixed enterprises with private majority
ownership. The key results of our analysis based on an extensive cross-sectional, time-series dataset
(2001-2003) for the major Asia-Pacific, European and North American airports are: (1) there is
strong evidence that airports with government majority ownership and those owned by multi-level
of government are significantly less efficient than airports with a private majority ownership; (2)
there is no statistically significant evidence to suggest that airports owned and operated by U.S.
government branches, independent airport authorities in North America., or airports elsewhere
operated by 100% government corporations have lower operating efficiency than airports with a
private majority ownership; (3) airports with a private majority ownership achieve significantly
higher operating profit margins than other airports; whereas airports with government majority
ownership or multi-level government ownership have the lowest operating profit margin; (4) on
average, airports with a private majority ownership derive a much higher proportion (56%) of their
total revenue from non-aviation services than any other category of airports while offering
significantly lower aeronautical charges than airports in other ownership categories excluding U.S.
airports. Our results suggest that private-public-partnership with minority private sector
participation and multi-level governments’ ownership should be avoided, supporting the majority
private sector ownership and operation of airports.