Since October 2019, the Autorité de régulation des transports (ART) has been responsible for approving airport charges levied by French airports. Under French transport law, the cost of equity of these airports must be determined using the Capital Asset Pricing Model (CAPM). Swiss Economics was commissioned to determine the beta – a measure of an airport's systematic risk – that is central to this calculation.

Methodology

The mandate was delivered through two sequential reports:

• In a first report, Swiss Economics used a microeconomic framework to identify the key drivers of differences in airport beta risk – in particular the flexibility of price cap regulation, traffic composition, and supply-side factors such as capacity utilisation and cost fixity. Building on this, French airports and a group of European comparator airports were grouped by risk profile, and a weighting matrix was derived to determine which comparator airports are relevant for each risk group.
• In the second report, empirical beta estimates were derived for listed comparator airports (including Fraport, Aéroports de Paris, Zurich, Copenhagen and AENA), complemented by betas from international regulatory precedent (including Amsterdam Schiphol, London Heathrow and Gatwick, and Dublin). These were de-levered using the Hamada approach and combined into group betas using the weighting matrix. Several sensitivity analyses (alternative market indices, GARCH models) confirmed the robustness of the results.

The analysis provided ART with a transparent and methodologically sound basis for setting the regulatory cost of equity of the French airports under its mandate.

Both reports are available here: Assessment of airport characteristics that capture differences in Beta risk and Betas for French airports based on empirical and regulatory evidence.