This research develops an economic public utility model to analyse the effects of the Single European Sky performance regulation on Air Traffic Control performance. We investigate incentives for air navigation service providers through the development of a high level economic model. This allows us to assess impacts at a strategic level and derive high-level results. The economic model provides insight into the mechanisms through which regulation can drive air traffic management performance improvements, as well as its limitations. Our model fits within the traditional theory of regulation often applied to public monopolies, originally developed by Laffont & Tirole. We complement theoretical derivations with a numerical illustration. We quantify the identified effects for a single, representative ANSP in Europe.
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© 2016 Elsevier Ltd
- ANSPs incentives
- Economic modelling