Seattle

Deal or No Deal: Prospects for Airport Privatization in the United States

Airport infrastructure investments, such as new runways, modern terminals, and improved ground access, are a top priority for governments and the traveling public. Robust revenues from parking, concessions, and landing fees pique the interest of private sector investors looking for long term, stable returns. Airport privatization proposes to bring the two together: governments give airport investment and management responsibilities to a private company that keeps excess returns, and then invests to attract more air service and passengers. While airports are commonly privatized abroad in places like Europe and Australia, only one airport is privatized in the United States. This report reviews the policies that govern airport privatization in the United States, recent history in domestic case studies, and the implications going forward. In the end, circumstances unique to the United States greatly limit the usefulness of privatization in solving airport problems. While privatization may be attractive in some circumstances, policymakers first need to clearly understand the problem they are trying to solve, and whether privatization is the best approach.

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