Airport Privatization in the United States

Abstract

Prior to the COVID-19 pandemic, airport infrastructure investments, such as new runways, modern terminals, and improved ground access, were a top priority for governments and the traveling public. The robust revenues from parking, concessions, and landing fees piqued the interest of private sector investors looking for stable, long-term returns. While the current economic slowdown brought airport operations nearly to a halt, there is an expectation that it will eventually return to normal. When it does, there may be increased interest in airport privatization of state and local governments that are strapped for cash. Governments may be interested in giving airport investment and management responsibilities to a private company that keeps excess returns, and then invest to attract more air service and passengers. While airports are commonly privatized abroad, only one airport is privatized in the United States. This chapter reviews the policies that govern airport privatization in the United States, recent history in domestic case studies, and the implications going forward. At 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 very specific contexts, policymakers first need to clearly understand the problem they are trying to solve and then determine whether privatization is the best approach.