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The Spanish airport system: Critical evaluation of the effectiveness of the Spanish government’s management of public resources

Author:

Ane Elixabete Ripoll-Zarraga

Universitat Autònoma de Barcelona (UAB), ES
About Ane Elixabete

PhD visiting researcher and PhD candidate in Entrepreneurship and Management (2017)

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Abstract

The Spanish government has invested significantly in airport infrastructure, owned and managed through a public company (AENA). Overall, there is a low level of traffic, overlapping airport service areas, and significant cross-subsidisation. In this study, stochastic frontier analysis is used to account for airports’ inefficiencies caused by both environmental factors and managerial decisions. This is a requirement to critically analyse the effectiveness of governments in managing public resources and the impact of their decisions. The decision-making process is fully centralised and highly standardised in the Spanish airport industry. AENA has legal entitlement to decide public policies not only regarding price and quality of the services provided by the airports, but also depreciation accounting policies. These are usually decided for the network as a whole, potentially breaching the matching principal and accrual convention. Additionally, disaggregated financial statements are not published. Airports’ expansion periods are clearly followed by increases in airport charges to airlines. These matters question the transparency of the published financial statements as a true and fair view of the Spanish airport industry. The absence of an independent regulator calls for an assessment of the actual airports’ efficiency levels. Results demonstrate significant inefficiencies and public losses due to high fixed costs (pegged to high infrastructure investment). The results also show inflexibility at the airport level for competition, which does not allow the system to financially recover unless more decision power is granted to airports’ managers.

How to Cite: Ripoll-Zarraga, A.E., 2017. The Spanish airport system: Critical evaluation of the effectiveness of the Spanish government’s management of public resources. The Public Sphere: Journal of Public Policy, 5(1), pp.221–254.
Published on 01 Jan 2017.
Peer Reviewed

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