Privately Owned Airports: Who's In Control Of Takeoff?

There are indeed privately-owned airports around the world. While airports in the US are largely owned and operated by public entities, there is one exception: Branson Airport in Missouri, which is the only privately-owned, privately operated airport in the country with scheduled commercial service. Outside of the US, there are several privately-owned airports, including London Heathrow Airport, London Gatwick Airport, Rome Leonardo da Vinci-Fiumicino Airport, and Zurich Airport. Additionally, countries like India, the UK, and Australia have a mix of publicly and privately-owned airports.

The US's Branson Airport is the only privately-owned airport with scheduled commercial service

Branson Airport in the United States is the only privately-owned airport with scheduled commercial service. Branson Airport is located in the city of Branson, in Taney County, Missouri. It is owned by Taney County and leased to the Branson Regional Airport Transportation Development District. The airport is operated by Branson Airport, LLC, a private company, through an operating agreement with the Branson Regional Airport Transportation District.

The airport opened in 2009 and has been serving residents, vacationers, and business travellers to the Branson Tri-Lakes region for over a decade. Branson Airport covers an area of 922 acres at an elevation of 1,302 feet above mean sea level. It has one runway, measuring 7,140 by 150 feet, and a 58,000-square-foot terminal designed to accommodate 1.4 million passengers annually. The construction of the airport was a massive undertaking, involving the flattening of several Ozark Mountains, and is considered the largest earth-moving project in the history of Missouri.

Branson Airport has a limited number of airlines operating scheduled passenger service. As of 2024, only Sun Country Airlines operates scheduled flights, offering seasonal service between Branson and Minneapolis/St. Paul. In previous years, other airlines such as AirTran Airways, Frontier Airlines, Southwest Airlines, and Buzz Airways have also served the airport.

The availability of scheduled commercial service at Branson Airport may vary over time, as airlines adjust their routes and destinations based on demand and other factors. Therefore, it is always a good idea to check the latest information on the airport's website or with the airlines directly.

Most airports in the US are owned by the government

While there are some privately-owned airports in the world, most airports in the US are owned by the government. In the US, major airports like Hartsfield-Jackson Atlanta International Airport and Los Angeles International Airport are owned by local authorities. These entities are responsible for infrastructure development, maintenance, and the implementation of security protocols. The government's involvement ensures that airports serve broader public interests and adhere to national aviation regulations.

Public-private partnerships (P3s) are long-term contracts where a private entity assumes certain responsibilities for a public asset, such as building, financing, operating, and maintaining it. P3s allow local governments to transfer the financial risk involved with transportation projects to private partners while also incorporating private sector innovations and investment, all without fully privatizing public infrastructure.

P3s are responsible for a substantial number of airport projects today, both large and small. For example, while Heathrow Airport in the UK is privately owned, the government plays a regulatory role to safeguard public interests. This unique collaboration allows for strategic investment, efficient management, and continuous improvements in passenger experience.

In the US, only one privately-owned airport with scheduled commercial service has been identified: Branson, MO, which only has seasonal service to three other destinations.

Airports are generally self-sustaining entities and act as landlords for businesses, including airlines

Airports can implement various models to manage their real estate and maximise income from commercial tenants. One approach is to engage external property professionals through a property management agreement, where they can advise on and run the airport's property. Another option is to create a joint venture with a property company, transferring a share of ownership and benefiting from their expertise and cash injection. Airports can also improve their income by offering all-inclusive rental packages that cover service charges, insurance, and rates. Additionally, with the rise of onsite renewables, airports can require tenants to purchase electricity directly from the airport.

To ensure flexibility, airports can incorporate a mix of break clauses and relocation rights, allowing them to accommodate expansion or alteration needs. When dealing with shared spaces, such as hangars or retail concessions, airports can use licence agreements, which are quicker and cheaper to implement than leases. It is essential for airports to have appropriate legal documentation for all types of occupiers to mitigate risks and maximise rental income.

Overall, by effectively managing their commercial tenants and adopting strategies to maximise income, airports can thrive as self-sustaining entities while providing valuable services to their business tenants.

Corporatisation: An independent entity is created to plan, operate and manage an airport

Corporatisation is a process that involves the transformation of a government-owned entity into a corporation. This can be done through the creation of an independent entity that plans, operates, and manages an airport. This approach has been increasingly adopted worldwide, with the exception of the US, where airports are typically owned and operated by government branches or independent airport authorities.

The benefits of corporatisation include improved operational efficiency and easier access to private sector financing and investment. By transferring majority ownership to the private sector, airports can achieve significantly higher operating profit margins and derive a larger proportion of their total revenue from non-aviation services. This is because private enterprises tend to have stronger incentives for profit maximisation and can make decisions more efficiently without the bureaucracy associated with government ownership.

However, it is important to note that not all airports are suitable for corporatisation. Airports with government majority ownership tend to have lower operating efficiency and profit margins. Additionally, some airports may be considered critical infrastructure, and full privatisation could result in reduced access for smaller communities or increased prices. Therefore, a careful assessment of each airport's characteristics and business environment is necessary before implementing corporatisation.

Public-Private Partnership (PPP)/Concession: The private sector takes on the most risk, being responsible for planning, financing, executing, and operating the airport

Public-Private Partnerships (PPPs) or Concessions models transfer the most risk to the private sector, as they are responsible for planning, financing, executing, and operating the airport. This model involves long-term contracts of more than 20 years, with the private operator paying a concession fee to the public authority and recovering costs through charges to airport users. This shifts revenue and demand risk to the private operator, who must balance protecting profit margins with keeping airport access affordable for the public.

The PPP model is particularly useful for growing the market and can be successful when there is a solid strategic definition of objectives and a sound business case. For example, the Queen Alia International Airport in Jordan, which accounts for approximately 97% of the country's air traffic, is run under a PPP model.

Another example is the Australia Airport Privatization Program, where control is transferred from the government to the private sector. This model can be useful for mature markets when the government has a financial incentive to monetise its investment.

In India, private companies can operate airports but must obtain a license under the Aircraft Rules 1937 and enter into an Operation, Management and Development Agreement with the Airports Authority of India.

Frequently asked questions