Abstract
The purpose of this paper is to develop an empirical model of demand for travel to the airport recently privatized by the federal government: the Confins-Tancredo Neves International Airport, Belo Horizonte, Brazil. Estimates of the modelling suggest that the future of the airport concession is considerably related to the economic growth of the country: with the use of industry data and econometric model of instrumental variables, it was possible to estimate GDP and price elasticities of demand around 2 and -0.15, respectively. The robustness of the estimates was checked by means of a set of sensitivity analyses using alternative estimators. In conclusion, we have, on one hand, a low growth economy may negatively affect the expected return of the concession given to high GDP elasticity of demand of airport, on the other hand, the low price elasticity may generate pressures from the regulated entities for tariff increases that maintain economic and financial stability and profitability of the operator.
Key words:
privatization; demand; air transport; airports
