[Second Semester – Compulsory Course for Stream 3, Elective Course for Streams 1 & 2]
This course offers insight into the economic parameters of providing air navigation services (ANS) from both the demand and supply sides within ANS markets. It explores various funding options for Air Navigation Service Providers (ANSPs) and the pricing of ANS implemented in different countries. The course focuses on cost-effectiveness issues in delivering ANS, along with explaining the role of economic regulation concerning liberalization in the structural reforms of the European airspace (Single European Sky). Particular attention is given to the emergence of new entrants into liberalized ANS markets in certain countries, new forms of ANS provision due to technological advancements (e.g., remote control towers, etc.), and new emerging business models in ANS provision. The limitations of market organization for ANS will be critically discussed, analysing the natural monopoly of airborne services. This leads to an examination of regulatory institutions and various economic regulation methods. By the end of the course, students will possess knowledge and skills to compare ANSPs using specific financial metrics and interpret these metrics concerning the parameters of the ANSP environment (corporatization, commercialization, liberalization, commercial activities, operational factors, economic regulation, etc.). Furthermore, participants will have the skills to apply economic theory to discuss alternatives to the status quo, primarily concerning pricing and economic regulation of ANS.
Upon successful completion of the course, students should be able to:
- Understand the role of Air Navigation Service Providers in the economy of the global air transport system.
- Perceive the provision of air navigation services as a specific economic production activity.
- Distinguish between alternative financing and pricing methods for air navigation services within the context of the financial sustainability of these providers.
- Analyse the milestones of the Single European Sky, focusing on the economic dimensions of the process, as well as regulatory strengths and weaknesses.
- Discuss market options for the provision of air navigation services and new pricing concepts.
- Consider interactions between economic issues and technological advancements in the provision of air navigation services.
- Utilize economic benchmarks for comparing air navigation service providers for the purpose of their financial and economic management (business model selection, commercialization, market expansion, etc.).
- Understand the incentives and disincentives for effective management emerging from the existing regulatory framework and proposed reform options.
- Gain a comprehensive understanding of the key players operating in the commercial (non-regulated) global air navigation service market, understanding their market strategies.