Ownership and Management
Airport involves various models in management and overall ownership of the aeronautical activities. For instance, the traditional model and federal authority placed practices of management of airports in the hands of the national government agencies, such as the national civil aviation authority. The only drawback of the agency despite its acceptance is its failure in meeting the need for innovation, responsiveness, and efficiency required for the rapidly changing airline industry (Ripoll-Zarraga & Huderek-Glapska, 2021). However, worldwide airport authorities have the intention of facilitating the decentralization of airport governance through the transitioning of local government control. The airport authorities’ organizational structure includes units with specific responsibilities, such as financial management, administration, legal affairs, and airport operations. International airport management has certain corporate principles of governance that are developed worldwide.
An example of the guidelines in the OECD principles on best practices of airport management.
Economic Regulation
The economic regulation of the airports involves the regulation of the aeronautical charges in most counties. The Ministry or department of the National government is tasked with the responsibility of making the regulations. It is focused on containing the cost of the aeronautical facilities and services. It also involves protecting the airlines and the passengers from various abuses that are likely to result from airports’ privatization. The common approaches used in regulating the airports include specifying the targets, mandating upper limits, and restricting the annual rates of unit charge increase.
Aeronautical Charges
Airports involve user charges that form the primary source of the overwhelming portion of the airport’s operators’ income. The international practices also vary in terms of the number of charges that can be imposed on users and the process of computation. However, developing an airport user charges system is a complex process. Some of the aeronautical charges include the landing fee, terminal fee, aircraft parking fee, cargo service charge, and other passenger service charges (Núñez-Sánchez et al., 2020). The costs can sometimes be high, especially the landing fee that is calculated following the aircraft weight formula.
How effective is the management and ownership of airports?
References
Núñez-Sánchez, R., Hidalgo-Gallego, S., & Martínez-San Román, V. (2020). Airport charges and marginal costs for Spanish airports before the process of partial privatization. Transport Policy, 99, 240-250.
Ripoll-Zarraga, A. E., & Huderek-Glapska, S. (2021). Airports’ managerial human capital, ownership, and efficiency. Journal of Air Transport Management, 92, 102035.