DEVI seminar – Estelle Malavolti

Date - Heure / Date - Hour
Date(s) - 26/05/2016
11h15 - 12h15

Emplacement / Location
Z035, Building Ziegler


State-aids at regional airports, a two-sided market analysis

• The European Commission that issued in 2005 guidelines on State Aids granted to airlines to address this issue, has introduced new ones in 2014 to tackle the issue of endless litigations and to take into account the new competitive conditions in the airline sector. These guidelines not only provide simpler start-up aids rules for new routes but also open the way to transitory operating aid schemes, an option apparently at odds with the European long-standing principles. However these ones, as discounts on landing or on terminal charges, can make sense at the economic point of view and can comply with the EU case law- based criterion of the private market investor principle. For this purpose, we model the airport as a two-sided platform, performing a trade-off between its aeronautical and commercial resources. Furthermore we put into relief the relationship between the level of the subsidy and the airport’s charges regulation. If these ones are regulated through a price-cap mechanism, the airline may use its negotiation power to extract to most part of contract’s gains. Conversely, a regulation based on a mechanism may allow to limit the capacity of the airline to extract these gains and to limit by way the level of the subsidy.

Estelle Malavolti, DEVI’s team, ENAC