Journal of Emerging Trends in Economics and Management Sciences: Home

Abstract:
The changing objective and strategy of airports, together with the evolving regulatory policies and governance structures influence airports? performance and their services. This is noticeable in the operational cost and revenue generation.The paper is aimed at analyze airport cost performance in relation to airport productivity. The paper adopted a case study approach, utilising detailed and sectionalized questionnaires as data collection instrument from ten airports located in six geo-political zones of Nigeria based on multistage techniques. The questionnaire elicited primary data on cost structure of airports. These were analysed using Cobb-Douglas and Translog cost functions that modeled cost performance of sampled airports. Cobb-Douglas, single-product and multiproduct cost function for airport operations have been estimated using data obtained from selected Nigerian airports. Cost performance estimates were conducted using restricted translog model. The outcome of the first order estimated coefficients for output suggests economies of output scale in the airport in the industry in view of passenger .It further revealed considerable level of explanation of all variables considered ? percentage of international passenger, delays, cargo volume and contractual service cost. This suggests that economies of output scale exist in all categories of airports and that the magnitude of the economies slightly increases in size of airport and diminishes with output scale. The outcome of the analysis is a confirmation of the advantage of the use of flexible functional forms like the translog model avoiding the misinterpretation of scale economies due to the lack of flexibility of the Cobb-Douglas model. No doubt, some of the differences in results in this paper and previous research might be due to differences of airport management goals in different eras or other types of regulatory constraints rather than exclusively to different estimation approaches. The results are expected to provide a key and fundamental framework for increasing efficiencies in the design and operations of airports across Nigeria and elsewhere. The paper explores the problem of the economic advantages from the joint provision of handling and airside operations as well as aeronautical and commercial activities using return to scope measures, derived using an input distance cost function approach. This would turn out to provide evidence which may be relevant to decision makers, especially in the light of the recent organizational evolution of the sector.

Keywords: appraisal, cost, performance, airports and functions

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