This ICF white paper examines the changing airport regulation landscape and the facilitation-based regulation agenda.
The classic model of airport regulation in which a regulator imposes prices on an airport is becoming increasingly out of date. Instead, a new agenda for regulation has emerged based on commercial negotiation between airport and airlines with the regulator intervening only if absolutely required. In this new facilitation-based regulation agenda, the role of the regulator changes from ‘What solution should we impose’? to ‘How can we assist parties to reach their own solutions’?
The facilitation-based regulation agenda provides a far less burdensome regulatory process and has considerable advantages to airports, airlines, and other stakeholders by enabling them to manage the process and shape solutions to meet their needs, including capital expenditure, service, operations, and traffic development as well as prices. Investors are likely to prefer this approach, as it avoids the periodic risks associated with successive regulatory processes. The specific features of the facilitation-based regulation agenda vary among countries. The very different contexts of Copenhagen’s and London’s airport systems illustrate the facilitation-based agenda in practice.
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