Abstract

Aeronautical charges in Italy have been based traditionally on airplanes' weight and set to be very small. Similarly, concession revenues have been limited, if not nil, and slots are mostly allocated among airlines according to the grandfather rule. Moreover, concessionaires have run commercial activities related to the aeronautical business under monopolistic conditions without being regulated. This paper studies the inadequacy of current mechanisms underlying the structure of aeronautical charges and it discusses the definition of alternative pricing mechanisms based on economic grounds, such as marginal cost pricing and peak load pricing. Finally, an auction mechanism governing slot allocation in substitution of grandfather rights is qualitatively developed and the steps required by its implementation are discussed.