When the shoe doesn't quite fit: Regulating large commercial airports with expanding roles (original) (raw)

Driven by declining real prices and increasing incomes, air transport has become increasingly interwoven into contemporary patterns of work, leisure, and social interaction. The resulting rising air traffic levels have allowed a larger number of ancillary traveler and shipper needs to reach service threshold levels. At the same time, pressures on public finance have often provided a motivation for airports to augment their incomes by satisfying some of those needs. Consequently, airports are now complex, multi-product organizations seeking to optimize revenues from many different operations. The expansion of air traffic has therefore heightened awareness of many long-term airport governance issues while raising new ones. Airports are central infrastructure nodes linking regional air and land connectivity. The central airport governance issue is optimizing the level and pattern of air service, recognizing that commercial aviation is a networked industry with a complex value chain and that the behavior of the direct service providers, airlines, is, in an era of private ownership and partial deregulation, beyond the direct control of communities, regions, and nations. The governance of air service, therefore, is in partnership with airlines and often works through the mechanisms of investment and pricing policy. Agreements to share investment risks with airlines and others are often part of airport regulation. The essential contribution of ground transport to air connectivity is less often appreciated and less well regulated. The increasing level of airport activity means mounting demand for additional retail facilities, hotels, conference centers, and even office space not to mention cargo terminals, distribution centers, and warehouses. In addition, demands for a widening set of services to passengers, shippers, and others can be met. Many large airports have entered into new business activities and roles. Satisfying some of these demands may be part of the complex aviation value chain and therefore may require close coordination with aeronautical activities. Only some of the service provision and real estate development is closely tied to aviation, however. The operation of