ARTICLES THE PRIVATIZATION OF COMMERCIAL AIRPORTS IN THE UNITED STATES What Is Wrong With the Federal Aviation Administration Privatization Program, and What Might Be More Successful?

This article summarizes current discussion regarding the privatization of U.S. air-ports in general and the Federal Aviation Administration airport privatization pilot program in particular. The lack of success of this program is analyzed in terms of general airline opposition to privatization and the inherent advantages to the air-lines of the current airport financial system. Those advantages are primarily (a) the historic cost method of calculating landing fees and (b) the subsidization of the cap-ital improvement program. Reference is made to other airport financial systems that may be more successful, such as the management of Indianapolis Airport by the British Airport Authority U.S., Inc. Privatization of state industry has been a popular movement for the past two decades, asbelief in the power of the market economy has swept the world. The shift began when Mar-garet Thatcher dismantled the nationalized industries in Britain in the 1980s through public offerings of shares on the stock market. Wave after wave of industry went through this revolu-tionary change. In 1987, the privatization of the British airport industry began with the $1.9 bil-lion public stock offering of the British Airport Authority. Following the success of the British experience, it was widely believed that privatization o