Economic evaluation of A4ANZs regulatory proposals

The Australian Airports Association (AAA) asked HoustonKemp to review the economic reasoning of the Airlines for Australia and New Zealand’s proposed changes to the regulatory regime for airports.

Our review examined the economic literature regarding final offer arbitration and critiqued the economic rationale used to justify the proposed changes (for example, opposing reports assume that reductions in airport charges will be completely passed through to customers in the form of cheaper air fares and that transfers of profits from airport shareholders to consumers are misrepresented as social benefits).

This report was requested by the AAA as part of its submission to the Productivity Commission’s review of the performance of the regulatory regime for airports over the twelve months commencing late June 2018.

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