Friday, August 31, 2007

Market failure: the airport edition

A post from Maria at Crooked Timber makes me wonder whether there isn't perhaps some sort of massive market failure going on at airports. Here's Maria:

Here are the things most people would happily pay for at an international transit airport: – a shower – clean underwear (for those of us who habitually forget to pack it) – daylight – an exercise facility to help with the jetlag and minimise DVT – nutritious but not too heavy food – a nap, lying flat, somewhere quiet.

And here’s what is generally available: – Gucci – Chanel – l’Occitane – Bodyshop – Lacoste – Nike – a few plastic seats – McDonalds, dougnuts, and the local variety of fried, sugary dross to add a sugar hangover to your jetlag.

I suppose the obvious point is that as a consumer of travel, your decision about where to travel is not about the airport but the place. If you want to go to London, you have to put up with Heathrow. So the airport company have a captive customer base, attracted by, and in a sense paid for, by the business environment and tourist attractions of the city. It's hard to see a market solution to the problem, except perhaps in very large cities, where you could conceivably have multiple airports in genuine competition.

So is there a solution? Are there any good publicly funded airports? Or are they just as bad? Is this dream airport something we're just never going to get?

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