Institutional Reform of Air Navigation Service Providers

Institutional Reform of Air Navigation Service Providers

A Historical and Economic Perspective

Transport Economics, Management and Policy series

Institutional Reform of Air Navigation Service Providers deals with the changes that have taken place in this major, technologically progressive industry as many countries moved away from direct provision by the government to forms of corporate or private provision. The author provides an up-to-date institutional and economic analysis of air navigation service providers’ efforts to reform their governance and funding structures under these changes.

Chapter 8: Data envelopment analysis study of European ANSPs

Subjects: economics and finance, transport, innovation and technology, organisational innovation

Extract

The main goal of this quantitative research is to estimate if ownership structure has been associated with different outcomes of economic efficiency of European air navigation service providers. The following questions are addressed: 1. Are commercialised ANSPs associated with higher levels of economic efficiency than public agency ANSPs? 2. Is the impact of non-policy variables, namely operational and physical ones, significant in terms of explaining differences in economic efficiency? The first question addresses the fundamental issue of the relationship between ownership structure and economic efficiency and how it relates to the overall issue of the rationale for privatisation and corporatisation: it has been hypothesised and shown that it is expected that changing ownership from the public to the private sector or to private-like business models will be associated with increased economic efficiency. This seems to be due largely to the presence of pressures for the actions of management to match the goals of the owners/shareholders and to innovate. That is, the incentives for efficiency in a private enterprise are greater than in a public endeavour. While in a private firm management has very clear goals, in a public agency goals vary, from the personal fulfilment of management, appeasing the government or pursuing the public good (Bös 1993; Jasi_ski and Yarrow 1996). There is however some contradictory evidence, suggesting that in some cases privatisation of transportation infrastructure did not result in increased efficiency (Oum et al. 2008).

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