ABSTRACT
This chapter explores regional aspects of the evolution of airport governance and regulation over recent decades. It focuses on the major airports in core regions because most of these airports still have persistent market power and are regulated. The chapter describes the regional implications of the ownership changes and analyses competition among airports, including from a regional perspective. Ireland and the Continental European countries were more reluctant and made different choices. Privatisation changes the principal–agent relationships. In a world of complete long-term contracts, this would not matter, but in a world with transaction costs, ownership does matter. The welfare impacts of privatisation depend also on the pricing policy of the airports and on the cost-efficiency gains. Privatisation strengthens incentives for cost efficiency, but it also strengthens the incentive to use market power to reduce output and increase prices. The speed of reform of regulation differs between these countries.
