In the late 1980s and the 1990s manycountries privatized airports or concessioned theiroperation. The United Kingdom began the trend, followed byother countries adopting new forms of infrastructureownership and management. To control infrastructurelicensing and the "natural monopoly"characteristics of some airport services, governmentsdeveloped regulatory policies for airport systems. Theoperation of an airport creates incentives to transfer theairport's market power to the air transport market. Ifthe airport market is regulated but the airport operator isallowed to control at least one airline, those incentivescan give rise to anticompetitive practices aimed atdisplacing competing airlines. When the regulatory frameworkfor airports lacks explicit rules about such verticalintegration, that can have consequences for competition inthe air transport market. Australia and Chile, for example,have an explicit prohibition on vertical integration. Bycontrast, Argentina has no restrictions on verticalintegration leaving it to the antitrust agency to decidewhether to approve or reject a vertical merger. Airlinesprovide air transport services by combining aircraft,personnel, airport services, and other inputs. Airportssupply a series of services to air transport companies andto passengers. Aeronautical services (rescue, security,firefighting, infrastructure supply, runway and taxiwaymaintenance). Aeronautical-related commercial services(catering; supply of fuel and lubricants; baggage,passenger, and aircraft assistance). Commercial services(banks, hotels, restaurants, car rental, car parking, retailshops, duty-free shops).
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