Xiaowen Fu

A comparative analysis of productivity performance of the world's major airports: summary report of the ATRS global airport benchmarking research report—2002

This paper compares productive efficiency for 50 major airports in Asia Pacific, Europe and North America by computing gross total factor productivity (TFP), further analysing TFP by regression models, and then computing ‘residual’ TFP after removing the effects of the factors largely beyond managerial control. The results reveal: larger airports are expected to achieve higher gross TFP because of the economies of scale in airport operations, not necessarily because they are more efficient than smaller airports; airports with a larger percentage of international traffic are expected to have lower gross TFP levels; an airports ownership structure does not appear to have any statistically significant effect on its productivity performance; airports with higher passenger satisfaction level does not appear to have lower productivity; an airport that diversify and expand their non-aeronautical activities such as concessions and other commercial services are likely to achieve a higher TFP level; airports with capacity constraints are expected to have a higher TFP level although it will impose delays on aircraft and passengers.

The impacts of maritime piracy on global economic development: the case of Somalia

This paper investigates the impacts of maritime piracy on global economic development. Calibrated with data between 2003 and 2008, we model shipping demands and competition in the Far East-Europe container liner shipping service and investigate the economic welfare loss effects due to reduced volumes of trade and shipping, as well as efficiency loss due to geographical re-routing of shipping networks which would be otherwise uneconomical. The substantial economic loss simulated from our model indicates that, even from purely the perspective of economic interests, more efforts from the international community should be dedicated to tackle maritime piracy.

Regional cooperation and management of port pollution

This paper investigates the market-based policy on pollution control in a region with multiple ports. Although the fraction of in-port pollution is modest compared to at-sea emission, port pollutions generally occur near populated areas and have a higher impact on public health. Most of the studies on maritime pollution control have focused on technical designs and operating issues over deep sea shipping. In addition, while pollution from a ports operation may spread out and has influence over a wider region, few studies have analyzed emission control across ports. This paper aims to complement this stream of research by examining the behaviors of ports and port users (i.e., shippers and shipping lines) if a certain incentive or disincentive policy is implemented. Our investigation reveals that in the absence of inter-port coordination, pollution spill-over and inter-port competition can lead to distorted pollution taxation and emission constraints. As a result, there will be excessive pollution and sub-optimal social welfare. Therefore, despite the potential competition among the ports in a region, it is important for them to coordinate their pollution control efforts. Our study recommends a regional approach in pollution control, and suggests areas where inter-port cooperation is needed among the competing ports.

A game theory analysis of port specialization—implications to the Chinese port industry

The fast growth of the Chinese economy and its international seaborne trade has escalated the demand for high-quality and efficient port services. “Decentralization” of the port management regime has given local government greater freedom in port development and operational decision-making. However, major port capacity expansion in coastal areas, coupled with the slowing down of both the economy and trade growth over recent years, has led to overcapacity and excessive competition. Although both port specialization and government regulations are called for to address these issues, few studies have investigated the formation mechanism and economic implications of port specialization. This paper uses alternative duopoly games, namely a Stackelberg game and a simultaneous game, to model port competition, where ports provide differentiated services in the sectors of containerized cargo and dry-bulk cargo. Our analytical results reveal that inter-port competition can lead to port specialization in the following three ways. A port can specialize in a type of cargo (1) for which there is relatively high demand, (2) where it has established capacity first, or (3) for services which require prohibitively high capacity costs. Also, it is seen that overcapacity is likely if strategic port decisions are made simultaneously instead of sequentially. These results suggest that if there is a clear market leader, policy intervention may not be necessary. However, if no port has clear market power, then government coordination and intervention may be needed in order to prevent overcapacity and to encourage specialization.

DEVELOPMENT STATUS AND PROSPECTS FOR AVIATION HUBS — A COMPARATIVE STUDY OF THE MAJOR AIRPORTS IN SOUTH-EAST ASIA

This paper benchmarks the key performance measures of the hub airports in Southeast Asia. Our investigation suggests that (1) Hong Kong has been a leader in terms of network connectivity, traffic growth, hub airline developments, and cargo logistics. (2) Bangkok airports growth has been constrained by political instability and weak hub airline development; in the long-run, the airport, however, has great potential. (3) The development of low-cost carriers have become a major driver for traffic growth, but the implications to airport connectivity have been unclear. (4) Despite limited progress on regional liberalization, intra-Asian routes have clearly contributed to traffic growth and hub airport connectivity. (5) Governments should safeguard airline competition by promoting market liberalization and airport capacity investments.

Evolution and research trends of container shipping

The shipping industry was transformed by the expansion of international trade and technological innovation, notably containerization, since the 1960s. Accordingly, this was followed by a significant increase in research addressing different aspects of container shipping. Despite such availability, important questions have remained unanswered: what are the major contributions that the research community has made to the container shipping industry, global and regional economies? Have their contributions been skewed towards particular themes, directions, and geographical areas? What can the shipping research community learn from the evolution and trends of container shipping research so that they can continue to contribute to the well-being of the global and regional economies? To address these questions, the paper undertakes a critical review and analysis on the evolution and trends of research in container shipping in the past four decades, based on a collection of 282 papers investigating different topics in container shipping featuring in major scholarly journals between 1967 and 2012. The study enables the shipping research community to enhance self-understandings and identifies major gaps for further research.

Impacts of Airports on Airline Competition: Focus on Airport Performance and Airport- Airline Vertical Relations

This paper examines revenue structure, regulation, and market power of airports, and how they affect airport’s services to airlines and influence the form of vertical relationship between airport and airlines, and thus, eventually on competition in airline markets. In addition, we also examine the competitive consequences of common ownership, coordination or alliance among multiple airports in a region. The key findings are: Concession revenues are of increasing importance to airports. The positive externality of air traffic on the demand for non-aeronautical services, along with competition among both airlines and airports, induces a vertical cooperation between airports and the dominant carrier at the airport. Airports have substantial market power due to the low price elasticity of their aeronautical services. However, such airports’ market power is moderated by competition in both the airline and airport markets. There are benefits for both airports and airlines from entering into long term relationships.

Across the waves: a bibliometric analysis of container shipping research since the 1960s

ABSTRACT The paper investigates collaborative and semantic patterns that emerged between 1967 and 2013 about the theme of container shipping based on a corpus of 294 articles published in scholarly journals within the fields of transportation, supply chain, economics, geography, regional planning and development, and operations research. An analysis based on the co-occurrence of title words allows identifying dominant sub-themes and their evolution. Main results point to the gradual diversification of container shipping research, from the dominance of economics towards a more trans-disciplinary set of approaches which integrate port-related activities and multimodal networks. Yet, disciplinary specialization remains strong up to nowadays so that container shipping research remains rather fragmented. While co-authorships have increased over time, they remain polarized by few, weakly connected research battalions. Our study suggests that research on container shipping would benefit from more frequent contacts between such communities to foster in-depth cross-disciplinary studies and fundamental cooperation.

Air Transport Liberalization and its Effects on Airline Competition and Traffic Growth – An Overview

Abstract This chapter reviews the effects of air transport liberalization, and investigates the roles played by airport-airline vertical arrangements in liberalizing markets. Our investigation concludes that liberalization has led to substantial economic and traffic growth. Such positive outcomes are mainly due to increased competition and efficiency gains in the airline industry, and positive externalities to the overall economy. Liberalization allows airlines to optimize their networks, and thus may introduce substantial demand and financial uncertainty to airports. Vertical arrangements between airlines and airports may offer a wide range of benefits to the parties involved, yet such arrangements could also lead to airline entry barriers which reduce the effects of liberalization. Three approaches have been developed to model the effects of liberalization in complex market conditions, which include the analytical, econometric and computational network methods. These approaches should be selectively utilized in policy studies on liberalization.

The Effects of Mergers on Airline Performance and Social Welfare

Abstract This chapter reviews the key results obtained in previous studies of airline mergers. It is found that the effect of mergers on airfares is dependent on the network configurations of merging airlines. Fare increases are frequently observed on overlapped routes. However, if the networks of two merging airlines are complementary, the expanded network after the merger leads to cost savings, increase in travel options, and improvement in service quality. Therefore, in a deregulated market, with few entry barriers, relaxing merger regulations is likely to improve welfare. However, most welfare evaluations do not incorporate quality changes or dynamic competition effects. Empirical investigations are primarily ex post analysis of mergers that have already passed antitrust reviews. The relationship between market concentration and welfare might be nonlinear and market specific. Therefore, airline mergers and alliances should be reviewed case by case. Methodological improvements are needed in future studies to control for the effects of complicating factors inherent in ex post evaluations.