Dublin Airport WACC

Should Dublin Airport's regulatory WACC be amended in light of Covid-19?

Airport waiting room

Client

Commission for Aviation Regulation (CAR)

Project period

2022

Related expertise

Regulation, Transport, Financial Services, Data Science

Team

Tobias Binz, Matteo Mattmann, Lilia Habibulina, Luca Apreda, Seline Spillmann, Leah Meyer de Stadelhofen

Contact

Tobias Binz, Lilia Habibulina

Project Description

Swiss Economics supported the Irish Commission for Aviation Regulation (CAR) in the assessment of the appropriate level of the regulatory WACC. The market turmoils that have been observed following the Covid-19 outbreak have led CAR to reassess all building blocks of Dublin Airport's price cap regulation.

 

Methods

  • Determination of the risk-free rate using evidence from government bond yields
  • Determination of market risk premia using backward- and forward-looking evidence
  • Determination of the Beta using a regression analysis of peer airports' stock returns
  • Determination of debt premia using evidence from Dublin Airport's outstanding debt and comparable corporate bonds

Publications

  • Swiss Economics report on the efficient regulatory WACC for Dublin Airport
  • CAR's Draft Decision

 

 

 

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