Airport Entry and Exit: A European Analysis
There have been many changes in recent years in both the airline and the airport industries in Europe and elsewhere. These changes have been interpreted by some authors as an indication that the airport industry is tending to become a competitive industry. The so-called ‘new view on airport regulation’ (Gillen et al., 2001; Tretheway, 2001) argues that airports are no longer natural monopolies and that more competition would be preferable to traditional regulation. This chapter is written with more emphasis on the old, more sceptical tradition that airports are monopolistic bottlenecks: either regional natural monopolies or legal monopolies due to planning and other restrictions (Niemeier, 2004). The scepticism does not stem from the belief that airports are naturally monopolies. Changes in demand and supply might eventually lead to a competitive industry structure. Nor is the scepticism rooted in a distrust of competition. Of course, perfect and perhaps even less intense competition is superior to regulation. Rather, the scepticism is based on the belief that despite these recent changes, competition is still minimal and not sufficient to prevent airports from abusing their market power (Forsyth, 2006). We would like to stress that this is our opinion as there is little empirical evidence on the intensity of competition among airports.