AIRPORT PRIVATIZATION

The worldwide trend to privatize airports has led the Congress to direct the US Federal Aviation Administration to experiment with privatization. How should this best be done? Because there always will be a public interest in the operation of major commercial airports, that are both vital assets to the community and potential monopolies, it is generally impractical to transform airports into wholly private businesses. Most privatization projects involve substantial regulation of the private investors, detailing the design of their services, the prices they may charge, and their openness to users. Worldwide experience provides three lessons: 1. U.S. airports are among the most privatized in the world. There is little scope for privatization in the United States compared to elsewhere. 2. Major aspects of airport operation must remain under government control, because of the public interest in these facilities. 3. Privatization may take a long time. The process requires considerable negotiation between the stakeholders in the airport business, and there are no simple solutions. The fundamental choice in the privatization process is how the government should sustain the publi