Jazmin Li
Unlike in Europe, airports in the United States are predominantly owned and operated by the government. Although the US has considered airport privatisation, only one airport has been successfully privatised since the inception of the Airport Privatisation Pilot Program in 1996. Under this program, airports can only be leased to private parties and not sold. This is to ensure that the state government uses the revenue generated from the airport for the development of the airport itself, rather than for other sectors.
| Characteristics | Values |
|---|---|
| Number of independent special districts operating as airport authorities, airport commissions, or port authorities | 435 |
| Midwest had the most number of airport authorities | 189 |
| Second highest number of airport authorities | 159 (South) |
| Number of publicly operated airports | 435 (as of 2022) |
| Number of privately-owned and operated airports with scheduled commercial service | 1 (Branson, MO) |
| Ownership of New York airports | City of New York |
| Ownership of Los Angeles International Airport (LAX) and Van Nuys Airport (VNY) | Los Angeles World Airports (LAWA) |
| Ownership of Hartsfield-Jackson Atlanta International Airport | State government |
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What You'll Learn
US airports are state-owned
US airports are predominantly state-owned, with only one airport being privately owned. This is in contrast to Europe, where many airports have been privatized. The US's state-owned airports are owned and operated by the local government, with the city or state they are in acting as the owner. These local governments operate like private companies, using a cost-revenue model to make operational decisions.
The state ownership of airports in the US can be traced back to the inception of the Airport Privatization Pilot Program in 1996, which aimed to increase access to private capital for airport development and make airports more efficient, competitive, and financially viable. Despite this program, only one airport has been successfully privatized, with the rest remaining under state ownership.
There are several reasons why US airports are predominantly state-owned. Firstly, the US has a much bigger reliance on air travel than any other country, and with thousands of airstrips, there is a lot of acreage to consider. State ownership ensures that there is always a government-controlled airport in each region, keeping prices down and preventing regions from being cut off from the rest of the country.
Additionally, the privatization of airports in the US comes with certain challenges. One of the key challenges is the requirement for security from various agencies, which may not be as easily facilitated by private enterprises. Moreover, the potential for lawsuits in the event of accidents or incidents is a significant liability that private enterprises may struggle to navigate.
Finally, the US government has an interest in maintaining quick and efficient travel across the country, and state-owned airports provide a valuable method of achieving this.
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The US federal government has tried airport privatisation
In the United States, airports are owned by state and local governments, with aid and federal policies provided by the central government. However, the US federal government has made attempts to privatize these airports.
The US federal government has tried airport privatization through the Airport Privatization Pilot Program, which was launched in 1996. This program was designed to test the idea of privatization on a small scale before implementing it nationwide. Up to five public airports were allowed to sell or lease their facilities to private companies under this program. The objectives of this program were to increase access to private capital for airport development and enhance the efficiency, competitiveness, and financial viability of airports. However, since its inception, only one airport has been successfully privatized, with the rest remaining under state ownership.
The privatization program included terms and conditions to ensure that state governments invested in improving airports instead of using them to finance other sectors. It also aimed to prevent an increase in air travel costs for passengers due to private companies chasing profitability. Additionally, veto power was given to airlines, one of the critical stakeholders in airport privatization.
Despite the potential benefits of privatization, legal and economic constraints have impeded the sale or lease of US airports. The Federal Aviation Administration (FAA) has generally discouraged the complete privatization of airports due to concerns over the fulfilment of legal obligations tied to federal grants. According to FAA rules, airports are restricted from diverting revenue generated for non-airport purposes, and proceeds from privatization must be reinvested into the airport. These restrictions limit the financial incentives for state and local governments to privatize their airports.
While the 2018 Reauthorization Act removed restrictions on the number and type of airports that could participate in the program, interest in airport privatization remains limited. As of June 2020, only two airports were participating in the program. This lack of interest suggests that the privatization of US airports may not be a widely embraced concept, and the federal government's efforts to privatize airports have had limited success.
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Private companies can lease US airports
In the US, airports are typically owned by the government in some form, be it federal, state, or local. For instance, the Dallas-Fort Worth Regional Airport is jointly owned by the cities it serves. However, private companies can lease US airports.
Congress established the Airport Investment Partnership Program (formerly the Airport Privatization Pilot Program) in 1997 to explore privatisation as a means of generating access to private capital for airport improvement and development. The Act authorised the Federal Aviation Administration (FAA) to allow up to five public airport sponsors to sell or lease an airport with certain restrictions and exemptions from federal requirements. The 2012 Reauthorization Act increased the number of airports that could participate from five to ten, and the 2018 Reauthorization Act removed the restriction on the number and type of public airports that may be leased or sold.
Despite this, very few airports have participated in the program. However, public-private partnerships (P3s) are more common. P3s are long-term contracts where private entities assume certain responsibilities for a public asset, such as building, financing, operating, and maintaining it. P3s allow local governments to transfer financial risk while incorporating private sector innovations and investments without fully privatising public infrastructure.
Leasing airport land to private businesses can help airports diversify their revenue streams. Airports can either wait for the right tenant or proactively seek out businesses to lease land to. Airports should develop their facilities to support a range of uses while balancing community expectations. Fair and open procurement, equitable dealing with tenants, and being a reliable partner to the private sector are crucial. However, administering leases can be challenging, and airports should be mindful of how they spend their money to avoid controversial investments that may never pay off.
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US airports can be run by private companies
While the US has not seen the same level of airport privatization as other countries, there are still examples of privately-run airports and public-private partnerships (P3s). For instance, the Indianapolis International Airport has successfully completed a management contract with a British airport company. Other contract-managed airports include Albany, Burbank, and White Plains/Westchester.
P3s allow local governments to transfer the financial risk of transportation projects to private partners while incorporating private sector innovations and investments. P3s can be used to build and operate entire airports or for smaller projects like water supply and parking. One study estimated that leasing 31 medium to large airports in the US could generate $1.3 billion in income over 50 years, which could fund infrastructure projects.
Privatization can also enhance competition between airlines as private managers are more willing to take risks with new investments and attract new carriers. Additionally, private airports in the US used to be entrepreneurial in generating revenues, with airports like Grand Central in California and Central in New Jersey earning a substantial income from on-site amenities such as hotels, restaurants, and sightseeing flights.
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Air traffic control towers are usually separate
Airports in the US are generally owned by the government, either Federal, State, or Local. For example, the DFW International Airport is jointly owned by the cities of Dallas and Fort Worth. There are also privately-owned airports, which are not included in the Census data.
Air traffic control towers are an essential element of aviation operations, ensuring the safety and efficiency of aircraft within the designated airspace and around the airport. These towers are tall structures, strategically positioned to offer optimal visibility for operators coordinating aircraft on the ground and in the air.
The functions of air traffic control towers include ground control, flight clearance control, approach control, and airspace control. Ground control manages the movement of vehicles and aircraft on the airport surface, while flight clearance control issues and manages clearances for flight plans. Approach control authorizes and instructs aircraft approaching the airport to ensure safe arrivals, and airspace control oversees all actions within the controlled airspace.
Air traffic controllers work in these towers, providing taxiing and take-off instructions, air traffic clearance, and advice to pilots. They ensure the safe separation and movement of aircraft, utilizing radar, GPS, and digital systems to monitor aircraft positions.
The work of air traffic controllers in the towers is crucial for maintaining the orderly and efficient flow of air traffic. Their comprehensive overview of the airspace enables them to prevent conflicts and ensure a steady stream of aircraft movements.
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Frequently asked questions
Most US airports are owned by state or local governments. However, there is one privately owned airport in the US, the Branson Airport in Missouri.
Airports are funded in a variety of ways. They can issue bonds, charge rental fees, and determine the amount of tax to be levied by the sponsoring government. They can also receive funding from state governments as part of their transportation programs.
US airports are typically operated by airport authorities, airport commissions, or port authorities. These entities are independent of general-purpose local governments and are governed by their board of directors or commissioners.
