Abstract

From a panel of 50 airports over a 13 year period, this research estimates a multi-product translog model of airport short run operating costs. Output includes departures, non-aeronautical operating revenues, and freight shipped and the quasi-fixed factor of production is the effective number of 10,000’ by 150’ runways. The analysis finds that airports operate under increasing returns to runway utilization and scale and non-increasing economies of scope, that input demand for general airport operations are price elastic, and that inputs are substitutes in production. The study also finds differences in costs and production characteristics by hub size and airport ownership.