Institutional Reform of Air Navigation Service Providers
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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.
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Chapter 9: Conclusion and policy implications

Extract

This final chapter discusses some of the main concerns that commercialisation brings from a public policy perspective. These include the challenges that arise when a country intends to commercialise a system, the failures of current economic regulation schemes and issues regarding capacity, innovation and equity. A summary concludes the chapter and the book. Although commercialisation is a simple concept in theory, the particular circumstances in which air navigation service providers (ANSPs) operate – a highly technical, highly regulated environment, with long-lived equipment that relies on very specialised employees to operate the system – bring a number of challenges that can complicate any decisions to commercialise the system. When deciding to commercialise decision makers face a number of questions. This is especially the case if commercialisation goes beyond the simple creation of a government corporation, and intends to introduce competition – via an auction for example – for the provision of air navigation services. Issues such as who will have the ownership of the equipment (operator, regulator, government or other public entity?), who is responsible for capital investments and modernisation efforts, and if the operator is responsible, the contract length needed for the contract to allow both the necessary investments and for the operator to have a reasonable return on that investment. Defining reasonable return on investment is, of course, a challenge in itself. Issues such as any restrictions on the bidding companies (in terms of country of origin, for example) further complicate the matter.

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