Abstract
In Germany, most large airports are owned by the states and/or municipalities in which they are located. Only few airports are partially privatized. As a German peculiarity, almost all airport companies are the largest provider of ground-handling services. There is no official market assessment, but according to academic studies, at least five airports possess strong market power. Regulation is assigned to the state level (usually ministry of transport). Until 2000, a rate-of-return regulation was applied. Later, in some states long-term charging agreements were concluded between regulator and airport. Some of them might be considered to be pure price cap schemes, whereas others are more similar to a rate-of-return regulation. Since 2012, regulation is based on the European directive 2009/12/EC. Today, usually a rate-of-return scheme and the dual till approach are applied. As in most cases states are major shareholders as well as regulators, the independence of regulation has been questioned by airlines and external observers. Moreover, an independent regulator on the federal level might be in a better position to apply benchmarking. From 2008 until 2018, average charges were quite stable (except Frankfurt due to large investment), but in efficiency benchmarking studies, German airports often do not perform well.
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Notes
- 1.
179 m out of 245 m PAX in 2018.
- 2.
The Berlin airport company operated the (formerly) two Berlin airports; the publicly owned Mitteldeutsche Flughafen AG is the major shareholder of the airports at Leipzig and at Dresden. Furthermore, Stuttgart airport is the majority shareholder of Karlsruhe/Baden-Baden airport, which is located in the same state.
- 3.
An attempt to privatize Berlin airport was started in 1997, but failed in 2003.
- 4.
In 2018, 85 percent of the shares were held by a Chinese investor, 15% by the state of Hesse.
- 5.
Approximately 75% of the shares are held by a Dutch investor, the remaining shares are held by local municipalities.
- 6.
Until 2018, these shares were held by Fraport.
- 7.
In 2010 the federal government published an update of its “airport concept paper,” stating that in Germany, competition between airports as well as between airlines exists (Bundesregierung 2010, 77).
- 8.
As of December 2019, this report is not publicly available. Results are summarized in Steer Davies Gleave (2017), and Persch (2017). Except for the three smallest airports (BRE, LEJ, and DRS), the study covered all airports listed in Table 15.1, plus HHN. As the entire report has not been published, it is not possible to critically assess the rather strong conclusions made by Copenhagen Economics.
- 9.
VFR = Visiting Friends and Relatives.
- 10.
At Bremen and Nuremberg also some profitable years were recorded.
- 11.
A description of this legal framework can be found in Littlechild (2012).
- 12.
Interestingly, the regulator described the regulatory regime at Frankfurt as rate of return, whereas the airlines rather saw it as a form of price cap regulation (Steer Davies Gleave 2013, 17).
- 13.
Usually the official reports on airport regulation are rather short (one or two pages) and basically list formal steps and the final decision made by the regulator.
- 14.
Quite remarkably, Frankfurt airport describes the regulatory regime as light handed regulation. On the other hand, the independent supervisory authority of North Rhine-Westphalia stated that the airports of Cologne and Dusseldorf are not regulated.
- 15.
The only exception among the largest airports is Dusseldorf.
- 16.
However, the EU wide comparison by Steer Davies Gleave (2013, 81–83) shows that the number of staff members in one (large) German state is above the number of staff members in most EU countries.
- 17.
In 2015, ATRS analyzed the cost competitiveness of 14 European airports with more than 25 m passengers. Frankfurt ranked at no. 8, and Munich at no. 10. In the group of 23 European airports serving between 10 and 25 m passengers, DUS ranked at no. 12, HAM at no. 17, STR at no. 19, CGN at no. 20, and TXL at no. 22.
- 18.
The example of Dusseldorf airport shows that even the ATRS comparison of charges has to be used with caution. In the 2011 benchmarking report, Dusseldorf was one of the most expensive European airports with a combined landing and passenger charge of almost US$4000. In the 2014 report, the total charge for the same aircraft is approximately US$3000. This decline cannot be explained by the change in the exchange rate.
- 19.
For most German airports, the average charges per passenger show basically the same development as the average charges per work load unit. Exceptions are Frankfurt airport (with larger fluctuations due to different growth rates in the passenger and the cargo market but the same overall trend) and Dusseldorf airport (due to a large decrease in the cargo volume in 2018).
- 20.
In general, discounts based on incentive schemes may be treated as revenue losses or as additional expenditure. The annual reports often do not disclose this information.
- 21.
Increase of average charges between 2008 and 2018 compared to the overall inflation rate (consumer price index) in this period.
- 22.
Due to its passenger growth, Berlin-Tegel is classified as a large airport since the 2013 report.
- 23.
In 2015, the five German airports in the group of airports with a passenger number between 10 and 25 m are the five least efficient airports in the ATRS report.
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Fichert, F. (2023). Airport Regulation and Benchmarking: Case Study Germany. In: Forsyth, P., Müller, J., Niemeier, HM., Pels, E. (eds) Economic Regulation of Urban and Regional Airports. Advances in Spatial Science. Springer, Cham. https://doi.org/10.1007/978-3-031-20341-1_15
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