Using U.S. airport data from 2009 through 2016, this thesis examines the determinants of aeronautical charges of large and medium hub airports and accounts for the spatial dependence of neighboring airports in a spatial panel regression model. The major finding of this thesis are (1) U.S. airports' aeronautical charges are spatially dependent, and neighboring airport charges are spatially and positively correlated; (2) there is evidence of airport cost recovery through nonaeronautical revenues; (3) airports sharing non-aeronautical revenues with airlines charge lower aeronautical fees than their peers that do not share revenues; (4) aeronautical charges increase with higher delays. v DEDICATION To my lovely wife, Esin and our twins, Janset and Jem. viTABLE OF CONTENTS

Could airlines manage their excess capacity? This is a timely question, considering the likely growth in demand in the post‐pandemic period. As capacity reflects competitive priorities, business models can account for excess capacity. This study examines the impact of business models on excess capacity. The results show that capacity utilization decreased by 7%, although technical efficiency increased by 6%. As excess capacity differs across business models, airlines adopting the full‐service airline business model have higher capacity utilization than their competitors. This can be explained by the actions taken by full‐service airlines after the 2008 financial crisis.

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