This paper analyzes the effect of airport ownership structure on management efficiency as reflected through their credit ratings. A game-theoretical model is proposed to examine the role of credit ratings in mitigating the moral hazard problem of public-owned airports. The analytical results derived from the model are then used to supplement a supporting case study. Notwithstanding the fact that the less competitive environment of a public-owned entity and its credit ratings might bring some welfare loss , this research concludes that public-owned airports have some advantages.
Airport, Ownership, Revenue Bond, Credit Rating, Incentive Contract, Moral hazard, Hidden Action, Management Efficiency
Operations and Supply Chain Management | Transportation
Air Transport Research Society 14th World Conference 2010, July 6-9
City or Country
KATO, Kazusei; TEZUKA, Koichiro; and LOW, Joyce M. W..
Effect of Credit Ratings on Airport Financing and Management. (2010). Air Transport Research Society 14th World Conference 2010, July 6-9. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/3265