Commercialisation and airport performance: The case of Ireland's DAA

Abstract

Airport performance has been the subject of an increasing volume of empirical research in recent years. This paper bridges a gap in the existing literature through an in-depth case study analysis of the process of commercialisation in the Dublin Airport Authority (DAA), Ireland's state-owned airport company, and the corresponding impact on performance over the 1994–2014 period. We use a model of commercialisation to examine changes in the DAA's internal and external environments that show evidence of a more commercial focus. The DAA's economic performance is then analysed using total factor productivity (TFP) and labour productivity indicators, as well as basic financial indicators. Our analysis highlights the significant internal and external changes experienced by the DAA over the past two decades that have driven a continuous process of commercialisation. While TFP growth was positive or stable in half of the years that we examined, the overall level of TFP declined over our timeframe of analysis. Much of this decline was due to two considerable programmes of investment in long-lived infrastructure assets where a return in the short-term would not be expected.