The Economic Impact of Security Costs on Airports in the Global Air Cargo Market

Abstract

This thesis analyzes the economic effects of aviation security costs in the global air cargo industry, with an emphasis on small and medium-sized airports (SMSAs). This study finds structural inefficiencies mainly due to SMSAs being disproportionately affected by global security regulations. While an airport is able to achieve economies of scale, SMSAs are constrained to their throughput, higher fixed costs, and rigid compliance requirements leading to limited competitiveness and economic sustainability.