Airport Overinvestment Risks Rise Under Price Cap Regulations
This paper delves into the investment incentives of airports under price regulation, analyzing the potential risks of over-investment and under-investment. Through case studies of London, Manchester, and Irish airports, it reveals that price cap regulation may not effectively curb the over-investment tendencies of public sector airports. The article also explores the role of regulatory agencies and suggests optimizing regulatory strategies by strengthening consultation with airlines. The study highlights the importance of a balanced regulatory approach to ensure efficient airport investment and prevent distortions caused by price controls.
