Regulation of airports: the case of Hamburg airport—a view from the perspective of regional policy

Abstract

There are currently divergent trends in the regulation of airports in Germany. While traditionally airports have been regulated by cost-based regulation, a price cap regulation for Hamburg airport has been implemented in 2000. Given the objectives of economic welfare and efficiency the paper argues that the old system is inefficient and results in a misallocation of resources. Regulation should be reformed by capping prices. An independent regulator should be established. Regulatory reform should be combined with reforms to intensify competition such as slot auctioning, further privatization with cross-ownership controls and open skies.