Abstract
Using U.S. airport data from 2009 through 2016, this study examines the determinants of aeronautical charges of large and medium hub airports and accounts for the spatial dependence of neighboring airports in a spatial panel regression model. Our results show that U.S. airports' aeronautical charges are spatially dependent, and neighboring airport charges are positively correlated, implying that U.S. airports are in price competition with each other even though they are government-owned infrastructure. Additionally, we find evidence of airport cost recovery through non-aeronautical revenues. This may be indicative of the airport's cross-subsidizing aeronautical operations with non-aeronautical revenues. In addition, we found the airports that share revenues with airlines charge lower aeronautical fees than those that do not share revenues. We also found that more congested airports charge higher aeronautical fees.
Published Version
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