Existing Competition
Introduction
3.48 The extent of competition between the airfield services provided by existing airports depends largely upon the degree to which airports are substitutes for one another. This depends on the following two kinds of substitutability:
- Supply-side substitutability - the extent to which different airports are technically capable of accommodating different plane types and airline hubbing requirements.
- Demand-side substitutability - the extent to which different airports are substitutable by passengers and other users, which depends largely upon their geographic proximity.
3.49 These two types of substitutability overlap to some extent, since the willingness of airlines to switch between airports depends in part on demand-side considerations. Each is introduced below, and discussed in more detail in the airport-specific chapters.
Supply-Side Substitutability
3.50 Airport substitutability from a narrow supply-side perspective depends largely upon the size of aircraft. Smaller aircraft are more flexible as to where they can land, with a grass strip being adequate for small, general aviation (GA) aircraft. For such aircraft, it is possible that smaller airports are substitutes for international airports. Indeed, such substitution has to some extent been forced upon GA operators by operating constraints at the three international airports, and also by charges, as GA aircraft landing charges have seen the biggest increases in the last ten years. Although GA aircraft still use the major airports, and some operators have a preference to do so because of the better facilities and location, much of that traffic has been forced out at peak times.43
3.51 Although it is difficult to generalise, larger turboprop and jet aircraft tend to be confined to the larger regional airports. The issue as to which aircraft can use which airports is complex. The factors involved are predominantly aircraft wheel loadings ("weight") and performance, runway characteristics (including length, layout, local terrain, altitude and ambient air temperatures), and commercial viability. With respect to the last, it may be technically possible for a "large" aircraft to use a "small" runway, but its payload and operational range may be so restricted as to make it not commercially viable (as is the case with Boeing 747s at Wellington International Airport).
3.52 At the extreme, Boeing 747s are restricted to Auckland and Christchurch International Airports, so that no other airport in New Zealand could be a supply-side substitute. As long-haul international flights from New Zealand typically use B747s, those two airports are the only ones capable of servicing such flights. Boeing 767s use those two airports plus Wellington, while Boeing 737s and BAe146s (Whisper Jets) are also able to use several of the regional airports. The smaller aircraft used on regional services - including Dash 8s, Metroliners and Bandeirantes - are even more flexible as to airport availability and use.
3.53 From a supply-side perspective, and focusing only on domestic traffic which does not involve the use of the larger aircraft, there appears to be considerable scope for substitution between a number of airports. There is also some flexibility for trans-Tasman routes, as B737s are now commonly used. However, for long-haul international traffic, which typically uses larger aircraft, the scope for supply-side substitution is much reduced.
3.54 Hubbing advantages to airlines are likely to further reduce airport options. With deregulation, airlines internationally have found it economic to form networks around a base or "hub" airport.44 An airline's demand (and also its investment) at its hub is likely to be greater than at potential substitute airports, suggesting that it is less likely to shift from such a hub, even in the event of an increase in landing charges at that airport. It may also derive some degree of market power in its hub. In New Zealand, Auckland International Airport acts as a hub for international travel for Air New Zealand. Wellington International Airport claims to be a domestic hub, although it argues that it potentially faces competition in this role from direct flights to and from regional centres.
3.55 It is understood that plans have been aired at certain regional airports, such as Rotorua and Tauranga, to extend the runways to accommodate international flights. This would potentially increase the number of alternative suppliers of airport facilities for international flights. However, it is understood that the international airlines would resist using such additional airports for international traffic, given the extra costs of so doing. Nonetheless, the airports have acknowledged that there is scope for certain regional airports to compete for traffic at the margin.
Conclusion on Supply-Side
3.56 From a narrow supply-side perspective, there appears to be considerable scope for substitution between adjacent airports for airfield services by the relatively "footloose" GA aircraft. However, GA yields insignificant revenues for the major airports, and would not be expected to induce competition between them. Indeed, GA switching to another adjacent airport in response to a rise in landing charges may be considered beneficial by freeing up runway capacity at peak times.
3.57 At the other extreme, the largest civilian aircraft with the most restrictive airport requirements - B747s - can only be used at Auckland and Christchurch. This limits the range of possible substitute airports for flights requiring the use of those aircraft. Most other aircraft can use the three international airports and a number of the larger regional airports, opening up a range of possible substitutes on this narrow supply-side view. However, as the discussion below will indicate, it is the demand-side issues that are critical in determining substitutability between different airports.
Demand-Side Substitutability
Introduction
3.58 The question as to whether individual airports operate in airfield services markets where competition is limited or likely to be lessened depends upon the extent to which the airfield services they provide are substitutable from the viewpoint of users and consumers. Hence, the question of competition reduces to one of geographic market definition. Specifically, the issue is which of the following alternatives apply:
- Either do Auckland, Christchurch and Wellington each operate in their own regional geographic airfield services markets, in which case they are likely to be the only suppliers, with competition between them for users and customers being low?
- Or do they operate in a wider (perhaps national) market, in which case each would compete with, and be constrained by, one or both of the others?
3.59 WIAL commented that the Commission had, in the Draft Report, conducted a collective market analysis that had paid insufficient regard to its particular circumstances.45 As a result, the constraints applied by other airports are considered here only in generic terms. The particular circumstances relating to each airport are considered in each of the airport-specific chapters, along with the Commission's assessment as to whether competition in each case is limited.
The Significance of Demand Elasticity
3.60 Each of the airports would have little market power in the airfield services market if users were able to switch readily to another airport in the event of a small price rise (a "ssnip"). In this case, the services provided by each of the airports would be close substitutes in the eyes of users, and hence would be competing against each other in the same geographic market. Put another way, the airfield services supplied by each airport would face a relatively elastic (price responsive) demand curve. Technically, this would reflect the high values of the underlying cross-price elasticities for the substitute products (the airfield services of the other airports).46 In such circumstances, the three airports would probably fall in the same geographic market.
3.61 On the other hand, were there to be no close substitutes for the airfield services of each airport, the cross-price elasticities of demand between the airports would be low, and the demand curve of each would be unresponsive to changes in price, because users would have no alternatives to turn to in the event of a price increase. In this case, the individual airports would, by implication, be operating in their own regional geographic markets in which they would be able to exercise market power (given that the mere ability of airlines to switch aircraft between airports as a supply-side measure would not be a constraining factor if demand for the services of those aircraft were absent).
3.62 It is also important to note the distinction between demand from the traveller for airline travel, and demand of the airline for airfield services. Information on demand elasticities (of which there is little) relates to the former, whereas the interest in the Inquiry is with the latter. However, the price elasticity of the derived demand by airlines for airfield services can be inferred from the elasticity of the demand for airline travel, although this requires an assumption to be made about what portion of any change in landing charges, if any, is passed on to passengers by airlines in ticket prices. Landing charges make up a relatively small proportion both of airline total costs, and of passenger ticket prices (both domestic and international flights). Hence, even a substantial increase in that charge may have a very muted impact on the price of, and hence on the demand for, airline tickets, even if the charge were fully passed on. This means that the price elasticity of the demand for airline tickets is expected to be much lower with respect to changes in landing charges, implying that airline passengers are not likely to be easily provoked into switching to another airport by an airport raising its landing charge.
Competition between Airports for Passengers
3.63 In considering passenger demand, it is customary to distinguish between leisure travellers (the latter including visiting friends and relatives) and business travellers, and between domestic and international travellers.
3.64 For leisure travel, it is sometimes claimed destinations compete. New Zealand airports might compete indirectly with other international airports as stop-over points and for the international tourism trade, and with Australian airports as regional hubbing points. International deregulation of airline routes (e.g., through a single trans-Tasman airlines market) may encourage further competition between airports, and in the future possibly lead to by-pass of current connection points. One example is the by-pass of Christchurch International Airport by direct flights from overseas to Queenstown. Another is the potential for passengers to transit at different hubs (e.g., passengers originating outside of Auckland could go through Sydney to Asia or Europe rather than through Auckland).
3.65 However, the ability of airports to influence travellers' ultimate destination choices through varying their airfield landing charges seems slight, as most travel seems to be destination-specific. This is especially the case for international travellers to New Zealand, because it tends to be a destination at the "end of the line", and for business travel. Hence, it seems unlikely that competition between destinations will constrain airports' charging behaviour for these types of passengers.
3.66 For domestic services, there appears to be very limited competition between the three major airports, or between them and other regional airports. Passengers wishing to fly from one airport to another are unlikely to find a third airport a substitute either as a departure or arrival point. Domestic travel tends to be destination-specific. This suggests that for domestic services the three major airports are essentially regional monopolies, in that there are no substitutes for their services for travellers wishing to fly into or out of those centres.
3.67 International passengers potentially have more flexibility as to choice of airport for arrival and departure, and may be more price conscious than domestic travellers, due to the availability of substitutes and the higher costs of getting to New Zealand from many European and American countries. However, about 42% of arriving international passengers are New Zealand residents (the majority returning after short-term holidays overseas).47 Of the remaining foreign arrivals, 63% come from Oceania (mostly Australia).
3.68 Auckland International Airport has by far the largest share of New Zealand's international traffic. In the year to 30 June 2001, about 70% of international passengers travelled through Auckland, 18% through Christchurch and 8% Wellington.48 Auckland has advantages over the other two airports because of the larger population in its catchment area, its relative importance in air freight (Auckland carries most New Zealand-originating international freight), and its proximity to international aviation routes.49 It also has the necessary infrastructure associated with servicing international airlines. It has a further advantage over Wellington in being able to handle the largest international jets needed for maximum flight distances. Apart from destinations in Australia (where all three airports host airlines with direct flights), the majority of New Zealand residents will have to go through Auckland airport to join connecting flights en route to their ultimate destination.
3.69 WIAL contended that airlines have the ability to influence demand for air travel through fare setting and promotion of particular destinations or events, and that this applies for both domestic and international destinations.50 However, the airlines will only promote particular destinations where it is profitable to do so. Meeting demand for flights is the overriding factor determining which airports an airline flies to, rather than the costs of doing so. Airport charges, although not insignificant to airlines, are unlikely to make the difference between an airline flying or not flying to a particular city, although they may have some impact at the margin and on budget airlines. Although cut-price charter operations are an important feature of the aviation business in Britain, they are at present insignificant in New Zealand.
3.70 The above analysis suggests that, with respect to airfield services, each of the three major airports operates largely within its own geographically distinct regional market, which are the greater population areas around the three airports (namely the greater Auckland, Wellington and Christchurch areas). Each airport faces a demand from acquirers who largely do not see other airports as offering viable substitute services. This is discussed in more detail for each airport in the airport-specific chapters.
Demand Elasticities
3.71 In assessing the elasticity of the demand for an airport's airfield services, the picture is complicated by the fact that the demand in question is a derived demand, i.e., the demand for an intermediate input. Such inputs have the characteristic that they are not wanted for themselves, but rather have value because they contribute to the production of the final good or service demanded by customers. Since estimates of price elasticities are easier to obtain for final rather than intermediate products, the question in principle becomes one of how to infer the elasticity of the one from that of the other?
3.72 At one level, the final service could be characterised as being the provision of passenger and freight transport services by aircraft operators. The demand for airfield services is thus derived from the demand for passenger and freight transport services. Arguably, however, the latter are themselves intermediate products, again not wanted for themselves, but as a means of satisfying some ultimate consumer want: the activities engaged in at the destination, either for business or leisure purposes in the case of a passenger, or the use of the item of freight by the recipient in the case of freight transport services.
3.73 A focus on the demand for air passenger and freight transport services is a useful starting point as these have been the subject of demand studies and elasticity estimates. A limitation of such studies is that they are country-specific and do not distinguish between the demands for air passenger and freight transport services provided at individual airports. Hence, the resulting elasticities have more to say about the substitutability between air travel and other transport modes, than between airports. Nonetheless, if the airports were in separate markets, so that the cross-price demand elasticities between them are low, then the country-wide demand for airport services would provide a reasonable estimate of the demands at each airport, at least after allowance is made for differences in traffic mix between them.
3.74 Where an airport serves various consumer groups, the derived demand for its services will be a weighted average of the demands from each of those groups. However, since the primary focus of commercial aviation is with passengers, and the great majority of air freight is carried in the belly-holds of passenger aircraft as a by-product of meeting passenger demand, attention can probably be limited to the demand from passengers.
3.75 On these assumptions, the price elasticity of demand for airfield services will be related to the price elasticity of demand for air travel by business and leisure passengers through standard factors that link intermediate and final product demand curves. These factors are:
- The price elasticity of demand for the final product (measuring the responsiveness of buyers of that product to changes in its price, reflecting in part the availability of substitute products).
- The relative cost of the input of interest in the total cost of the final product.
- The elasticity of input substitution (measuring the ease or difficulty with which that input can be substituted for by other inputs, in a given time period).
3.76 Although submissions appeared generally to agree with this approach, which appeared in the Draft Report, some raised concerns about how the Commission had applied the approach in practice. CIAL raised the following concerns:51
- The elasticity studies the Commission had referred to (see below) were for other countries and were not airport-based.
- The elasticities related more to substitutability between air travel and other discretionary expenditures, than to substitutability between airports by airlines.
- There was no mention of the time periods covered by the studies, nor the expected speeds with which higher landing charges would be reflected in higher ticket prices, and hence in passenger demand responses.
- Although the Commission noted in the Draft Report that there are likely to be differences in price elasticities of demand between business and leisure passengers, and between domestic and international passengers, it did not attempt to use these to compute airport-specific price elasticities of demand for each of the three airports to reflect their different passenger mixes.
3.77 AIAL considered that the Commission's approach to elasticity estimation was fundamentally flawed, mainly because it assumed that airlines pass on changes in airfield charges to ticket prices, which AIAL thought was unlikely, and because changes in landing charges bear no relationship to movements in airline ticket pricing. Nonetheless, whilst disagreeing with the approach, AIAL concurred with the ultimate finding that "the price elasticities of demand for the range of likely changes in airfield charges are small..."52
3.78 Each of the three factors listed in paragraph 3.75 is now examined in turn, in the light of these submissions.
Demand Elasticities for Air Travel
3.79 In some countries and regions air travel in general, and therefore airports as a group, may be constrained, at least in part, by competition from other transport modes serving the same routes. Possible examples include the high-speed trains in Europe, and leisure travel along the eastern seaboard of Australia. If such were often the case, the ability of airports to exploit any potential market power they might appear to have as input providers would be constrained by the contestability in the final product market for transport services.
3.80 However, although other transport modes may offer some limited competition at the margin (most likely for small aircraft on short flights, and for long-term pleasure travellers), air travel is much faster, which is a factor especially valued by business travellers. In addition, there tend to be fewer alternative modes of transport available to long-haul passengers, particularly when crossing a body of water. Hence, it would appear that airports are unlikely to be constrained in their pricing behaviour by competition to airlines from other transport modes to any significant degree. Put in economic terms, the demand for air travel is unlikely to be influenced much by the presence of other transport alternatives. There is no evidence that airlines in New Zealand compete directly with other transport modes, except possibly for some limited classes of freight.
3.81 The more elastic the demand for the final product, the more elastic (or less inelastic) will be demand for intermediate inputs used in its production, all else remaining the same. Overseas studies of the demand for air travel suggest the price elasticity is moderately high. One survey by Tretheway and Oum, which referred to studies published in the 1980s, mentioned a range of between -1.1 and -1.3 for Canada (based on a 10% drop in price), and figures of -1.15 and -1.5 for business and leisure travellers respectively in the United States.53 The latter pair of figures reflect the established view that business travellers are less price sensitive than leisure travellers. The figures represent the percentage change to be expected in quantity demanded from a one per cent rise in price.
3.82 There are no comparable estimates for New Zealand. As a consequence, in the Air New Zealand/Ansett Holdings business acquisition authorisation application in 1996, the applicant recommended, and the Commission accepted, that for New Zealand the use of a price elasticity of demand of -1.5, averaged across all domestic air travellers, was appropriate.54 This figure was said by Air New Zealand to reflect overseas experience of airline demand.
3.83 The time periods implicit in these estimates are not known. Although the estimates relate to demand for the final product - air travel - on a national basis, and no doubt reflect substitutability between air travel and other discretionary expenditures, they are an appropriate basis for estimating the associated demand elasticity for an input, airfield services. The lack of New Zealand-based estimates is not helpful, however.
3.84 One of CIAL's concerns can be addressed by recognising that the price elasticity of demand for international air travel is higher than for domestic air travel. This is because much more international travel is leisure related, and hence more discretionary and income sensitive, and because of the availability of substitute destinations. In addition, international travel is typically more costly than domestic travel, implying that a given percentage rise in price would have a relatively larger "income effect".55 There may be other factors, such as exchange rate risks related to spending money, and possibly fears of international terrorist attacks, which may also make international travellers more sensitive to changes in the price of air travel.
3.85 The demand price elasticities for air travel at individual airports can then be estimated as the weighted averages of the differing demand elasticities of domestic and international travellers, where the weights used are the proportions of such travellers in the passenger mixes of each of the airports. The overseas studies quoted above suggest that for domestic passengers, a figure of about -1.3, being the rough midpoint of the range, might be appropriate. There are no demand price elasticity estimates for international passengers, although there are reasonable grounds (as explained above) for expecting that elasticity to be higher (in absolute terms). Support is provided by the extra demand created by cut-price airlines, such as Freedom Air and the former Kiwi International. Hence, a figure of -1.8 is used arbitrarily here.
3.86 Although the airports argued otherwise,56 the results derived later in this Report are not, in fact, very sensitive to the value chosen for the final product demand price elasticity, given that, using all reasonable values, the input demand price elasticity is likely to be very low.
Relative Cost of the Input
3.87 The relative cost of the input in question (airfield services) in the price of the final product (air travel) is important. If, as is the case, the cost of the input contributes only a small amount to the cost of an airline ticket, then even if the price of that input were hypothetically to as much as double, the increase in the airline's costs, and hence in the prices of its tickets, would be relatively small. The combination of the large increase in the input price, and the resulting small fall in the quantity demanded, would generate a low price elasticity of demand for the input.
3.88 However, CIAL questioned how quickly a rise in the price of the input would, in fact, be fed through into ticket prices.57 If there were a delay, caused by the airlines absorbing the extra cost themselves, there would be no passenger response, and so the input demand curve would be perfectly inelastic. Further, even if the extra charge were to be passed on in higher ticket prices, and there were a fall in passenger numbers, that might not translate into any reduction in the number or size of planes using the airfield. In this case, there would also be no change in the demand for the airfield services input, as the landing charge is levied on the fully-loaded weight of aircraft, not on seat-occupancy rates.
3.89 These comments can be interpreted as bearing on the speed at which changes in landing charges impact on the demand for airfield services. Although the immediate impact of a moderate increase in charges may be muted, the longer-term impact is likely to be more complete. This suggests that the Commission's estimates of the price elasticity of demand for airfield services at each of the three airports on the basis described here will, all else being the same, be an upper bound estimate of the short-run (say, less than six months) figure, and be more representative of the position in the longer-term.
3.90 It is generally accepted that airport charges constitute a small proportion of the cost of an airline ticket. A figure of 3% for the proportion of aeronautical charges to airline operating costs has often been quoted. However, Doganis points out that this figure was a world average that concealed wide variations between airlines and between short- and long-haul flights.58 For example, he found that for most European charter airlines, which generally operate on short hauls, airport charges represent about 15% of their total operating costs. The percentage costs are higher for such airlines, as they have lower operating costs (because of the lower costs of crew and catering).
3.91 The proportion of airfield charges in airline costs and prices varies between aircraft types and routes. Aircraft used by different operators vary widely in size, and consequently their sensitivity to airport charges is likely to vary. Long-haul flights tend to use large aircraft, and short-haul flights small aircraft. The former are less likely to be deterred from using airport facilities by an increase in charges, because the increase is likely to form a smaller proportion of their costs and of passengers' airfares.
3.92 In New Zealand, the indications are that airports' charges constitute less than 10% of the operating costs of airlines for domestic routes.59 In consequence, in the Draft Report the Commission used an average figure of 7% as the proportion of landing charges to ticket prices. In contrast, CIAL had, as part of its December 2000 charging document, calculated figures of about 1.6% for domestic services and about 0.8% for international services. These figures seem unduly low. BARNZ submitted that the 7% figure was reasonable.60
3.93 The Commission asked Air New Zealand to provide estimates for domestic and international flights. Air New Zealand responded with the figures given in Table 2, which differentiated by airport and by type of passenger.61
Table 2: Average Percentages of Landing Charges to Ticket Prices for Air New Zealand at the Three Airports
| Airport | International passengers | Domestic passengers |
|---|
| Auckland | [...] | [...] |
| Christchurch | [...] | [...] |
| Wellington | [...] | [...] |
3.94 The Commission proposes to use the figures in Table 2 as the basis for its price elasticity calculations. The figures are based on local operating conditions, and are from a carrier whose activities cover the full range of provincial, main trunk and international services.
Elasticity of Input Substitution
3.95 In theory the demand for airfield services could be more price elastic than that of the final product if there were alternative inputs that could easily be substituted for airfield services. In this case, any attempt by airports to raise their landing charges would be met by airlines switching to alternative inputs, resulting in an elastic demand response from users and hence little market power on the part of airports. However, there appears to be no close substitutes for airfield services available currently or in prospect. This factor cannot, therefore, be expected to exercise a competitive constraint on the behaviour of airports, nor to significantly influence the price elasticity of demand for airfield services.
Estimating Demand Elasticity
3.96 The preceding discussion suggests that the elasticity of input substitution factor can safely be ignored in estimating the price elasticity of demand for airfield services. Only the first two factors - the final product price elasticity of demand and the relative cost of the input - need to be considered. The price elasticity of demand for airfield services is found by multiplying those two elements together. For example, if the final product price elasticity were -1.5 as suggested in the Draft Report, and airport charges were to amount to, say, 7% of ticket prices on average, then the price elasticity of demand for the airport services input on average would be: -1.5 x 0.07 = -0.105. As noted above, this will generate an upper bound estimate on the assumption that aircraft landings for various reasons, will not necessarily respond by falling in response to the increase in landing charges.
3.97 In Table 3, the price elasticities of demand for air travel for domestic and international passengers, and the proportions of landing charges to ticket prices for domestic and international flights at the three airports - the elements determined above - are multiplied together to generate separate estimates of price elasticity of demand for airfield services for domestic and international passengers at the three airports. In the case of Christchurch and Wellington, the derived demand of international passengers is less elastic than that of domestic passengers. While this may seem counter-intuitive, given that the air travel demand of international passengers is more elastic, this merely reflects the offsetting effect of the much lower average of landing charges to international ticket prices at those two airports.
Table 3: Estimates of Price Elasticity of Derived Demand of Domestic and International Passengers for Airfield Services at Each Airport
| Airport | Passenger type | Price elasticity of demand for air travel | Proportion of landing charge in ticket prices | Price elasticity of derived demand for airfield services |
|---|
| Auckland | Domestic | -1.3 | [...] | [...] |
| International | -1.8 | [...] | [...] |
| Christchurch | Domestic | -1.3 | [...] | [...] |
| International | -1.8 | [...] | [...] |
| Wellington | Domestic | -1.3 | [...] | [...] |
| International | -1.8 | [...] | [...] |
3.98 The price elasticities of derived demand of domestic and international passengers for the airfield services at each of the three airports estimated in Table 3 are converted into a single weighted average for each airport in Table 4. The weights are provided by the domestic/international passenger number proportions at each of the airports for the year ending 30 June 2001 (or 31 March 2001 in the case of Wellington).
Table 4: Estimates of Weighted Average of the Price Elasticity of Derived Demand for Airfield Services at Each Airport
| Airport | Domestic / International Passenger Split | Weighted Average Price Elasticity of Derived Demand |
|---|
| Auckland | 0.402/0.598 | [...] |
| Christchurch | 0.739/0.261 | [...] |
| Wellington | 0.872/0.128 | [...] |
3.99 The revised estimates in Table 4 indicate, as did the estimates in the Draft Report, that the derived demand for airfield services at each of the three airports is very price inelastic.62 The implication is that, in the absence of off-setting factors, airports have significant pricing power, since the exercise of that power would have little impact on the demand of users for the intermediate input.
Conclusion on Demand Elasticities
3.100 All parties agreed that the demand for airfield services was likely to be very inelastic, even though some questioned the way the Commission had quantified those elasticities in the Draft Report.63 The Commission has now revised its approach to take account of the point that domestic and international passengers are likely to have significantly different elasticities of demand for air travel, and thus to produce different price elasticities of the derived demand for airfield services at each of the three airports. Although such estimates are only approximate, they do not have a large impact on calculations done subsequently in this Report.
Conclusion on Existing Competition
3.101 Although aircraft can be shifted between routes, implying substitutability of airports from a supply-side perspective, from the demand-side view, airlines supply their services to meet demand by passengers and freight for particular point-to-point routes. As passengers generally travel only from or to the most convenient airport, and most freight is carried in the cargo-holds of passenger aircraft, the ability of airlines to switch between airports is limited.
3.102 In this Chapter, the Commission has broadly canvassed whether airports are in competition with each other in the airfield services market, or whether each operates in a geographically distinct market. The Commission's generic analysis suggests (subject to analysis on an airport-by-airport basis) that, for most traffic, none of the three airports faces significant competition either from the others, or from other regional airports. The constraints posed by existing competition are considered in more detail for each airport in the airport-specific chapters later in this Report.
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