The Organisation of Multiple Airports in a Metropolitan Area

This study deals with the allocation of international and domestic flights (allocation of services) among multiple airports in a metropolitan area. We examine three types of airport operation: 1. separate operation by two private firms (PP); 2. integrated operation by a single private firm (M); and 3. integrated operation by the government (G). By means of numerical simulations, we obtain the following results: (a) the allocation of services varies with the location of airports and types of operation; (b) the welfare gain of the service choice regulation is quantitatively small compared with the airport charge regulation. © 2012 LSE and the University of Bath