Measuring and Explaining Airport Efficiency and Sustainability: Evidence from Italy

From an environmental point of view, it is widely recognized in economic literature that an efficient management of regional airports produces positive effects both for congestion reduction in the larger airports and for better use of existing infrastructures. Regional airports generally suffer from economic vulnerabilities because of scarcity of traffic volume; besides, their small catchment areas often determine low cash flow levels. As a result, significant problems of economic sustainability arise. In this context, airport infrastructure providers have the incentive to hide failures in their strategic decisions, justifying the low share of cost recovery through market characteristics. By means of the DEA (Data Envelopment Analysis) method this paper analyses overall technical, pure technical, and scale efficiency of 34 Italian airports in the period 2006-2016 in order to investigate how a number of factors impact on the efficiency and economic sustainability of regional airports. Our findings reveal that airport size, presence of low-cost carriers and cargo traffic have a significant influence on the technical and scale efficiency of Italian airports. In other words, air transport privatization and deregulation can positively affect regional airport efficiency and sustainability. This is to say that the market mechanism is a useful tool in achieving regional airport sustainability even if the empirical analysis of the effects of privatization and deregulation is recommended for evaluating such political programs.