Unlike the airline industry, where deregulation has become the preferred regulatory mechanism and where competition is strong, airports have high barriers to entry and are near-monopolies in many cases. Consequently regulation has been considered essential as airports pass into private hands. In turn, the basis for transferring airports to private ownership is that state funds are better employed in other ways than running airports. It is necessary therefore both to deliver suitable returns to private investors to ensure they make the necessary investments, while at the same time protecting the interests of consumers and airlines. Hence, regulation – transparent and predictable regulation – is essential.
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