留學生essay參考范文：Airport Privatisation Challenges Way Forward Economics Essay
機場私有化
 

機場是國際航空運輸協會及其成員航空公司的主要合作伙伴。沒有機場,航空公司沒有業務。沒有航空公司,機場沒有業務。對于國際航空運輸協會來說，機場不管是公共所有權還是私人所有權都不是核心問題。關鍵因素是,不管機場的所有權結構是怎樣的，機場都可以滿足航空公司需要的成本和服務水平。因此,決定私有化機場,框架到位必須受益行業和它的客戶。私有化機場不應該為了政府簡單地視為一個短期的提高收入的途徑。它必須被視為經濟發展的長期愿景的一部分。
 

航空運輸產業若要以可持續的方式來滿足日益增長的未來需求，新機場投資能力以及更有效地使用現有的能力是至關重要的。如果我們要成功應對這一挑戰，航空公司和機場私人部門以及公共部門之間的一個透明合作關系是很重要的。
 

Airport Privatisation Challenges Way Forward Economics Essay

 

Airports are key partners for IATA and its Member airlines. Without airports, airlines have no business. Without airlines, the airports have no business. For IATA, whether an airport is in public or private ownership is not the central question. The key factor is that an airport can deliver the cost and service levels that airlines require, regardless of the airport's ownership structure. Therefore, where a decision is taken to privatise an airport, the framework put in place must benefit both the industry and its customers. Privatising airports should not be viewed simply as a short-term revenue raising option for governments. It must be seen as part of a long-term vision for economic development.

 

Investment in new airport capacity - along with more efficient usage of existing capacity - is essential if the air transport industry is to meet future growth in demand in a sustainable way. A transparent partnership between airlines and private sector or public sector airports is important if we are to meet this challenge successfully.

 

Privatisation, as a policy, began in 1982 with the sale to individual investors of 51% of British Telecom, which launched a radical change in public policy in Britain and around the world.

 

BAA, in the UK, was the first major airport privatisation with a full floatation of its shares in 1987.

 

Airports have until recently been under full Government ownership. This remains the case in the United States where airports are owned by local government and financed mainly through ticket and fuel taxes and bond issues, with airlines owning and operating their own terminals. However, European governments in particular, and increasingly those in Asia-Pacific and Latin America, have privatised many of their larger airports.#p#分頁標題#e#

 

WHAT EXACTLY DO WE MEAN BY PRIVATISATION?

 

Since 1982 'privatisation' has become a generic term to describe a range of market-oriented reforms of public sector institutions, including airports and air navigation service providers:

 

-The full or partial sale to private companies of government assets, usually with the establishment of an autonomous regulator unless competition can be introduced;

 

-The leasing of assets for long-term operation and development by private companies;

 

-The liberalisation or the introduction of competition. In practice, this is not possible with airports or air navigation service providers, and so will not be considered in this paper. Competition for the purchase of the privatized asset or its operation is possible and desirable, but once that has occurred, the provider becomes a private monopoly.

 

WHAT MAKES IT A SUCCESS?

 

For privatisation to be in the public interest, rather than just a revenue-raising exercise or a ploy to shift assets off balance sheet for government, it must result in a more efficient management of the infrastructure assets. This is the critical yardstick by which the success or failure of a privatisation must be judged.

 

Privatisation is not about more efficient finance. The Government is almost always the best borrower, at least in developed economies. Under the public limited company 'plc' model of privatisation the cost of capital may be 6% points higher than what it would cost the government. In order to succeed for customers, private sector management must more than offset this additional cost by efficiency gains. A strong and efficient economic regulator will be a necessary prerequisite for this to be achieved by infrastructure providers, who almost always operate in markets with weak or absent competitive pressures.

 

But the success of economic regulation is mixed where the interests of managers are not aligned with their customers, which may be the case with, for example, powerful shareholders. Boosting shareholder returns and managers own share options may not always be consistent with providing customers with a cost effective service of the right quality. Managers must also balance the need to provide a cost efficient service for customers, with the (sometimes) conflicting objectives of service quality and safety. Many privatisations in the past 23 years have failed to achieve this.

 

Overview

 

Success must be measured not just by the maximisation of revenues from an airport sale, but by whether privatization has delivered a cost-effective service of an appropriate quality for the travelling public. The record with airport privatisations as with other infrastructure industries is often disappointing.#p#分頁標題#e#

 

The experience of other infrastructure provider privatisations

 

There are now over twenty years of experience with the privatisation of infrastructure providers from many industries. Although considerable amounts have been raised from the sale of public assets to the private sector, the benefits to the customer and the public interest in general have been less clear.

 

There are a number of lessons that can be drawn from this experience.

 

1.The cost of capital has proved too high under the public limited company 'plc' privatisation model;

 

2.Efficiency gains have been maximized where the management of business is outsourced;

 

3.The sale of public assets and the introduction of competition may conflict;

 

4.Performance improvement can occur without the sale of assets to the private sector;

 

5.Governance arrangements, not ownership, are the key to success;

 

6.Under the 'plc' model there is more incentive for the regulated company to present the regulator with inflated investment plans and other strategies to create the scope for unexpectedly large profits or to reduce the pressure for efficiency gains;

 

7.There has often been a failure to balance objectives to provide a cheap, good quality, safe service;

 

8.Without legitimacy in the eyes of customers and the public privatisation will not work;

 

9.The 'plc' model is also inadequate when an infrastructure provider fails;

 

10.Customers have gained from some privatisations, in terms of lower prices relative to the general consumer price index, but not by a lot;

 

11.Shareholders of privatised companies do not always win. After an initial rise following favourable conditions under which privatisation took place, share prices have generally underperformed as previously public sector entities have not performed well in the private sector.

 

Airport Privatisation Options

 

Option 1: Sale of airports to private companies and investors

 

So far there have been a relatively small number of airports that have been privatised through the full or partial sale of the assets to private investors. Most of these have taken place in Europe and New Zealand.

 

Option 2: Trade sales/leasing assets for private operation

 

In Australia and Latin America (and also Greece) the privatisation option taken by Government owners of airports has not been to sell ownership but to lease the airports for long-term development and/or operation by private companies.#p#分頁標題#e#

 

Identified Challenges

 

-Airports are confronted with serious capacity, financial and environmental constraints, giving rise to potential discrimination between incumbent and new entry airlines. Concentration of operations exacerbates the problem at big hub airports, while there is spare capacity across the airport system, which requires a more commercial and efficient use. Expanding capacity requires financial resources that may well go beyond the capacity or the willingness of public budget to invest. Private capital investment is to be involved, but this implies that the right incentives have to be designed to attract private investors, in particular in the case of big airports.

 

-Cost and quality of service, which are frequently claimed to be unsatisfactory, are the main concern to airlines. They expect airports to be managed in a commercial way, which is a primary driver for the provision of cost-effective service. Development of capacity in order to expand their activity is also high on the airlines' agenda

 

VIENNA AIRPORT (VIE), AUSTRIA

 

-Privatisation of VIE has resulted in inadequate investment and high charges for customers;

 

-Before privatisation VIE had high costs. Very weak economic regulation has done little to change this providing no incentive to improve efficiency, provide adequate investment, or hold back monopoly profits.

 

The main problems resulting from the privatisation of VIE have been:

 

-Direct regulation of charges that creates no incentive for efficiency improvements, unlike the CPI-X approach. Charges had, until recently, been based on a simple formula, rising with forecast inflation with some reduction for higher traffic i.e. in essence a cost-plus approach. Late in 2004 the regime appeared to shift to a more direct regulation of the charge level. Charges were reduced 5% in responses to customer complaints. More fundamentally there has been little incentive for VIE to address the high cost base that causes its charges to be among the highest in the world;

 

-Classic monopolist behaviour is to restrict output in order to boost profit margins. The inadequate investment programme appears to demonstrate this outcome. There are insufficient incentives for cost-efficient investment;

 

-There are few checks and balances with the absence of a Competition Commission nor an independent economic regulator with a clear mandate to act in the public interest.

 

ZURICH AIRPORT (ZRH), SWITZERLAND

 

-The privatisation of ZRH was setback by the demise of Swissair, its main customer, but has resulted in few efficiency gains and it is one of the most expensive airports in the world;

 

-The absence of independent economic regulation and the use of a dual till means there is little incentive for efficiency gains, or pressure to offset monopoly power to share any such gains with customers in lower charges.

 

The major problems with this privatisation have been:

 

-The absence of any independent economic regulator to check ZRH's market power as a private natural monopoly over much of its customer base. The Price Surveillance Authority has acted as a brake to some recent increases but there has been little incentive for efficiency improvements by ZRH. An incentive-based CPI-X price cap would be necessary to achieve this;

 

-The airport has also switched from single to dual-till. As a result aeronautical charges bear the full cost of providing aircraft and passenger services. Yet many of these are common costs necessary for the airport to provide commercial services. Commercial service income and profits could not be generated without incurring the costs of the aeronautical services associated with delivering the customers i.e. airline passengers.

 

AUCKLAND INTERNATIONAL AIRPORT (AIA), NEW ZEALAND

 

-The privatisation of AIA has resulted in one of the most profitable airports in the world, but it remains subject to ongoing airline criticism over excessive charging;

 

-The absence of effective economic regulation and an inflated asset base has allowed monopoly profits to persist. Of major concern is the Government's decision to reject the Commerce Commission's recommendation that airfield charges be subject to some form of control.

 

The key problems with this privatisation have been:

 

-There is no effective economic regulation to prevent AIA abusing its dominant market position or to create the incentives for efficiency improvements. As a result customers have faced excessive charges;

 

-The asset base and operating costs on which charges are based have been inflated. Land is valued at a high market value and includes areas the airlines do not consider necessary for airport purposes. Moreover, the cost of capital used by AIA appears overly high which, particularly when coupled with excessive asset valuations, adds to costs and the base for charges.

 

SYDNEY INTERNATIONAL AIRPORT (SYD), AUSTRALIA

 

-The experience of SYD privatisation has been that, although service quality is judged good by passengers, airlines are less satisfied and charges are high;

 

-The problem is that economic regulation was abandoned, after SYD appeared to be 'fattened' for sale with asset revaluation and a move to a dual till. Mandatory price monitoring by the ACCC does not provide sufficient incentive to improve efficiency or to reduce costs to the users.#p#分頁標題#e#

 

The key problems with this privatisation have been:

 

-Although charges have not risen far since privatisation there was a 97% increase just before privatisation in 2001, on the grounds that this would allow SYD to earn a commercial rate of return;

 

-However, this rise was justified first on the basis of a dual till. As a result aeronautical charges will bear the full cost of providing aircraft and passenger services, yet many of these are common costs necessary for the airport to provide commercial services;

 

-Second, aeronautical assets were revalued just before privatisation which further raised the level of charges necessary to achieve the commercial rate of return;

 

-The above are problems with the privatisation process. However, now that SYD has been privatised the key problem is the lack of price-cap economic regulation. The ACCC is a similar body to the Competition Commission in the UK, but the key difference is that there is no incentive-based price cap in place to encourage SYD to improve its efficiency. Not only does price monitoring create no incentives for cost efficiency improvements, the ACCC has limited powers of enforcement which can be overridden by the Government.

 

PERTH AIRPORT (PER), AUSTRALIA

 

-In the case of PER privatisation in the absence of economic regulation has led to large charge increases with no corresponding rise in services or any significant capital investment;

 

-The absence of economic regulation, together with asset revaluation and the use of a dual till, has meant large charge increase for customers.

 

The key problems with the privatisation have been:

 

-The lack of any economic regulation of charges since 2002. This means there is little incentive for efficiency improvements and certainly no incentive to share any cost efficiencies with customers in lower charges;

 

-The same issues as with SYD about the impact on customer charges of asset revaluation and the application of a dual till system.

 

EZEIZA INTERNATIONAL AIRPORT (EZE), ARGENTINA

 

-Privatisation of EZE has been a very bad deal for customers. The structure of the lease sale has meant very high charges, under-investment and poor customer service quality;

 

-The absence of an independent economic regulator and the clear conflict of interest as apparent from extremely high royalty fees has led to a very confrontational relationship between Government, airport operator and customer.

 

Some of the key problems with this and other privatisations in Latin America are:

 

-Sales of leases or concessions were structured in such a way that they almost inevitably led to sharp increases in charges, with no corresponding rise in service. Many lease sales were made on the basis of unrealistically high traffic forecasts and the bidding process led to high royalties, both of which severely damaged profitability. Airport operators have tried to recoup these losses by raising charges on airline customers and cutting back investment plans;#p#分頁標題#e#

 

-There was very little flexibility built into the 30-year lease contracts, particularly in respect of royalty payments, restricting the ability of airport operators to adapt to changed market circumstances;

 

-The absence of independent economic regulation of charges and an independent economic regulator or other body acting in the public interest has led to a damaging rise in charges and decline in service quality. There is no incentive for improvements in cost-efficiency that a CPI-X type price cap would deliver. Conflicts of interest abound with, for example, part of airport royalties paying the salaries of the regulator;

 

-There is no effective mechanism for customer interests to be represented in decisions about charge or service levels. Although lease contracts specify customer consultation, there is no effective regulatory body to ensure the monopoly airport takes any notice;

 

-Investment in new capacity has been inefficient, due to the lack of economic regulation or customer consultation. In some airports there has been excessive investment in terminal facilities, while in others there has been under-investment;

 

-Resources are being drained from the industry through lease royalty payments to Government which are not used to fund aviation infrastructure. Moreover, cross-subsidy from more efficient airports to inefficient airports are raising and distorting charge levels for customers, and provide a disincentive for efficiency improvements;

 

-There is no competition among service providers at airports, such as catering, ground-handling etc. The monopoly provision of these services leads to inefficiency and high charges.

 

ATHENS INTERNATIONAL AIRPORT (AIA), GREECE

 

-Service quality at AIA is good but that comes at a very high price for its customers, in the 3rd highest charges in the world. Moreover, the regulated target rate of return of 15% ensures monopoly profits are achieved at the expense of its captive customer base.

 

The key problems with this privatisation were:

 

-There was little transparency and no consultation with airline customers in the plans to build the new airport. This led to costly and inefficient investment;

 

-The 'rate-of-return' economic regulation creates no incentives for improving efficiency, and indeed permits monopoly profits. Moreover, if monopoly profits are not made in one year the regulator allows charges to be raised in order to recoup shortfalls;

 

-The use of a dual till means that aeronautical charges bear the full cost of providing aircraft and passenger services. Yet many of these are common costs necessary for the airport to provide commercial services.#p#分頁標題#e#

 

Compacting Strategies

 

-Sound economic regulation can make a major contribution to the optimal use of existing capacity, both for runways and terminals. Charges can be modulated (peak and off peak charging) in order to take into account congestion and the different level of demand during the day. An especially important issue is the funding of new infrastructure development. A properly designed charging system has also a role to play in the development of new capacity.

 

-Sound economic regulation is appropriate to strike a balance between the demands and expectations coming from different stakeholders and to deal with the above mentioned constraints. The main tasks of regulatory action can be identified as follows: setting up a fair and efficient charging system for the use of airport infrastructure, which is not open to competition, and setting the incentives right to encourage investments and commercial management of the industry.

 

-Private initiatives in funding and managing airports have to be offered the right conditions and incentives if they are to be successful. This implies reducing some of the uncertainties facing private investors and promoting commercial management of infrastructure.

 

-For privatisation, in particular through foreign investments, to be successful, it is necessary to guarantee open access to international bidders for the market for airport concessions. It is desirable that a true global market for airport concessions develop, where actors can compete on an equal footing. This requires the identification and promotion of common practices on public procurement for airport concessions based on transparent and competitive bidding procedures.

 

-Evidence shows that when airports are run as commercial undertakings, their financial situation and managerial efficiency improve, whether they are publicly or privately owned. It is therefore desirable that commercial behaviour develop. National authorities should allow airports to be run in a commercial manner, by liberalising services that can be run as market activities but that are still unnecessarily regulated.

 

BRITISH AIRPORTS AUTHORITY (BAA), UK

 

-A good example of how to privatise an airport successfully and implement effective economic regulation of existing assets;

 

-However, less effective economic regulation of new investment has led to a sharp rise in airport charges, and potentially inefficient investment.

 

The key elements to the effectiveness of economic regulation have been:

 

-The independence of the regulator. This is established in principle through legislation, but in practice through the role of the UK Competition Commission's ability to recommend to the CAA whether or not the regulator's decision is in the public interest or not. Note that there needs to be constant vigilance against what is known as 'regulatory capture' by too close a relationship between regulator and regulated airport leading to excessive investment and charge levels. Having a Competition Commission acting in the public interest is critical;#p#分頁標題#e#

 

-Efficiency improvements generated by incentive-based price regulation, as opposed to other forms of price regulation such as 'rate of return'. Price caps on landing and passenger charges over a 5-year period (which gives customers and airports certainty) took the form of CPI-X, that is the general rate of consumer price inflation minus an efficiency factor. Note that price caps need to be set so that airport profits are not too far in excess of their cost of capital, and to address the common practice of airports over-estimating the investment they expect to incur - both of which lead to excessive charging;

 

-Quality of service was ensured by setting measurable quality and service level standards under the regulatory arrangements. Note that if such standards are not set, then incentive-based RPI-X price regulation could lead to a reduction in service quality in order to improve airport profits;

 

-Costs of other essential customer services not covered by the price cap (e.g. check-in desk rentals) are taken into account by being included in a 'single till'. The 'single till' principle ensures that the profits generated through commercial activities by the passengers, brought by airlines to the airport, are taken into account when setting the level of airport charges. Note that such a practice is justified by, for example, the UK Competition Commission, on the grounds that the measured profits derived from commercial activities exclude the common costs of landing and passenger services, without which such incomes could not be generated. Further, the application of the single till also eliminates the need for stringent cost allocation requirements, which in the best of cases has been found to be extremely complex;

 

-Strong and informed regulators are required to challenge the airport's own projections for asset valuation, operating and capital expenses, traffic forecasts and non-regulated commercial revenues. Note that realistic and reasonable estimates are required to set the price caps to allow the airport to earn its cost of capital, but maintain incentives to improve efficiency;

 

-While the UK economic regulator is considered to have done a good job at extracting maximum value from existing assets, the airline customers of London Heathrow consider that now substantial new investment is underway, price caps have been too generous. The 2003-08 price caps of RPI+6.5% have resulted in actual charge increases of 12% for 2005-06. It is not clear to customers that this pre-financing of future investment will deliver the most cost efficient increase in service levels. Note that regulators need to ensure that there are sufficient incentives to deliver the most cost efficient new investment as well as cost efficient existing operations.

 

COPENHAGEN AIRPORT (CPH), DENMARK

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-This has been a relatively successful privatisation with good service quality and relatively low charges;

 

-Economic regulation has been effective with a formal incentive-based CPI-X system at the ready should negotiation fail. However, there is a potential conflict of interest with the remaining 34% Government ownership.

 

The key elements to the effectiveness of economic regulation have been:

 

-If negotiation fails, then regulated price caps will create an incentive for further efficiency improvements. This is an important mechanism to encourage the airport to come to a reasonable negotiated agreement with airline customers. The incentive-based CPI-X formula incorporates both additional efficiency improvements in the 'X' factor but also a portion of the previous year's passenger traffic growth to claw back any excessive charges resulting from traffic overshooting airport forecasts;

 

-However, this new regulatory structure may not be delivering as much as it could. The first regulated period from 2003-2005 saw a negotiated agreement to increase charges by 2.75% a year. However, inflation over this period looks set to average less than the European Central Bank's 2% target i.e. in practice the price cap has been CPI+1%. This is unlikely to have been a very strong incentive for efficiency improvements. Unlike the UK situation there is no Competition Commission to act in the interest of the customer and ensure the economic regulator set appropriate price caps. Moreover, the economic regulator is the Ministry of Transport and not an independent body. Since the Dutch Government hold 34% of the shares in CPH there is a potential conflict of interest. The checks and balances of a Competition Commission acting in the public interest and the independence of the economic regulator are key factors to restrict the market power of airports in customer charge negotiations.

 

Conclusions

 

1.Successful airport privatisations engage customers as key stakeholders from the outset in establishing the master plans, financial plans and the economic regulation process and then involve them in an ongoing and regular basis through agreed processes and full transparency;

 

2.More efficient management is the key to successful privatisation, since cost of capital is almost always higher in the private sector;

 

3.Good governance is more important than transferring ownership to the private sector, in order for privatisation to be in the public interest. However, privatisation through lease sales will be detrimental to the public interest if royalties to the Government are excessive;

 

4.Independent, robust, economic regulation will always be necessary to create incentives, for efficiency improvements and for sharing these gains with customers, in the private monopolies created by privatisation. If the Government retains a shareholding and controls the economic regulator, there is automatically an unacceptable conflict of interest;#p#分頁標題#e#

 

5.The most successful economic regulation has been where the regulator is also overseen by an independent Competition Commission to prevent too comfortable a relationship between the regulator and the regulated entity;

 

6.Economic regulators have sometimes been good at extracting maximum value from existing assets, but have not been good at ensuring cost-effectiveness from new investment;

 

7.Mechanisms to incentivize cost efficiency and continuous improvements must be built in from the outset. CPI-X price cap regulation will create the incentives for efficiency improvement, whereas direct or rate-of return regulation risks preserving monopoly profits and inefficiencies in the early stages of a privatised airport;

 

8.In order to ensure good quality as well as cost-effective service, it is essential to have in place service level agreements (or similar systems) to ensure that service quality standards are maintained and improved;

 

9.Controls must be put in place to prevent unjustified asset revaluations and moves to dual-till accounting which leave costs common to both aeronautical and commercial services burdening airlines and their passengers with substantial charge increases;

 

10.A new model, for structuring infrastructure providers in the private sector, is emerging, which could in theory better serve customers; a debt-financed private company structure limited by guarantee, accountable to a board of customers and business partners. In practice this still may not prevent 'gold-plating' on investment programmes. Customer involvement remains essential.