St. Louis Pulls Bid to Privatize its Airport

St. Louis Pulls Bid to Privatize its Airport

January 24, 2020  | Robert Puentes

In the late 1990s, the St. Louis Lambert International Airport was the nation’s 15th-largest, with more traffic than Seattle-Tacoma, New York LaGuardia, or Charlotte Douglas. Lambert was once the home of Trans World Airlines (TWA), but after that company’s financial health declined, many flights were moved to other larger airports in Chicago and Dallas. Daily operations by air carriers averaged about 1,000 takeoffs and landings per day in 1997, compared with just 350 in 2016. The airport now suffers from excess capacity.

In 2017, the city of St. Louis applied to include Lambert in the federal Airport Privatization Pilot Program. The APPP was created in 1996 to foment airport privatization in the United States though, technically, commercial airports like Lambert can only be leased out. The first airport in the United States to be privatized under the APPP was Stewart International, north of Manhattan but the deal struggled from the outset, and the Port Authority of New York and New Jersey took it over in 2007. Today, only one U.S. airport—Luis Muñoz Marín Airport in San Juan, Puerto Rico—is privatized.

Despite its recent traffic decline, Lambert is generally considered to be a very well-run airport, and enplanements have steadily risen since the 2009 nadir. Nevertheless, the city believed a private partner would help bring in more revenue from non-aeronautical, cargo, and adjacent land, which would boost the regional economy.

In addition, the city explicitly wanted to secure an upfront payment from a private partner and then use that revenue for projects elsewhere in the city, a process known as asset recycling. The city’s application stated that it expected to “free up more than one billion in capital” for non-airport uses. The St. Louis mayor at the time specifically mentioned the North-South MetroLink light-rail expansion as a project that could be funded with proceeds from the lease. The next mayor “adopted the privatization effort as her own” and in 2018 selected an advisory team for the proposal and worked to clear several hurdles, including securing support from the city boards and gaining airline approval. Detractors asserted that recent bond rating upgrades indicate that the airport is already well operated, and the city could lose control over how the airport is run under privatized lease.

In late 2019, after 18 potential bidders expressed formal interest in submitting proposals, the Mayor abruptly ended the city’s privatization plans. In doing so she cited opposition from the general public and the regional business community. At the same time, groups of labor and community activists continue to call for privatization as a way to make airport improvements, and generate jobs and revenue without raising taxes. While the federal application is not officially withdrawn, last week city officials voted unanimously to stop the process.

It does appear that the primary impetus for the effort was to extract airport value for other city infrastructure projects rather than solving any specific airport-related problem. While asset recycling can work, it is still relatively untested in the United States. That does not mean St. Louis should not experiment with such an approach, but it is unclear if such an arrangement would address the airport’s operations any better than the current arrangement.

Share

Related Articles

Senate Committee Investigates Drone Integration for FAA Reauthorization

Senate Committee Investigates Drone Integration for FAA Reauthorization

On Wednesday, September 28, the Subcommittee on Aviation Safety, Operations, and Innovations under the Senate Commerce, Science, and...

Representatives Discuss the Impacts of Leaded Aviation Fuel on Communities and Children

Representatives Discuss the Impacts of Leaded Aviation Fuel on Communities and Children

Some general aviation aircraft use high-compression piston engines, which requires gasoline with a high octane level. While...

House Lawmakers Hear General Aviation Industry Concerns About Leaded Fuels, Workforce Shortages, and More

House Lawmakers Hear General Aviation Industry Concerns About Leaded Fuels, Workforce Shortages, and More

The House Transportation and Infrastructure Committee’s Aviation Subcommittee met this week to hear from a panel of general aviation...

Making the Case for a National Strategy for Advanced Aviation Platforms

Making the Case for a National Strategy for Advanced Aviation Platforms

Our national airspace is an artery for commerce, a key domain for national security and homeland defense, and, increasingly, a domain to...

Another Case for Increasing Participation of Women in Aviation

Another Case for Increasing Participation of Women in Aviation

The fact that the aviation industry lacks workforce diversity is old news. Various scholarly studies and industry reports have highlighted...

Webinar: Eyes in the Skies: How The Ukrainian Crisis Affects Aviation

Webinar: Eyes in the Skies: How The Ukrainian Crisis Affects Aviation

The war in Ukraine has touched almost every corner of the world in almost as many ways. From parts availability to rising oil prices, it's...

Subcommittee Hearing Examines Community Concerns Regarding Aviation Noise

Subcommittee Hearing Examines Community Concerns Regarding Aviation Noise

This week, the House Transportation’s subcommittee on Aviation held a hearing entitled “Aviation Noise: Measuring Progress in...

Communication Breakdown: T&I Hearing Shows Differing Perspectives Between FAA and FCC on 5G and Aviation Safety

Communication Breakdown: T&I Hearing Shows Differing Perspectives Between FAA and FCC on 5G and Aviation Safety

Reminiscent of a certain Led Zeppelin song, all witnesses and Representatives agreed on the utter lack of communication and coordination...

Looking to the Skies: A Centennial Institute Session Recap

Looking to the Skies: A Centennial Institute Session Recap

If there was one word to describe the state of the U.S. aviation industry in 2019, it was “soaring.” Airlines in the United States...

House Panel Grills FAA Chief Over Implementation of Congressional Directives

House Panel Grills FAA Chief Over Implementation of Congressional Directives

Yesterday, the House Aviation Subcommittee got an update from the Administrator of the Federal Aviation Administration on the status of the...

Year-End Funding Bill Creates New Requirements for Aircraft Certification

Year-End Funding Bill Creates New Requirements for Aircraft Certification

As part of the massive omnibus funding bill passed by Congress yesterday, which contains the second round of COVID relief money, Congress...

Time Running Out for Water Resources, Aviation Certification Bills in This Congress

Time Running Out for Water Resources, Aviation Certification Bills in This Congress

Several key transportation and infrastructure bills are still unsettled, and time is rapidly running out for this Congress to...

Be Part of the Conversation
Sign up to receive news, events, publications, and course notifications.
No thanks