Air Transportation Privatization

April 4, 2014

Ever since Margaret Thatcher's government privatized the British Airports Authority, airport privatization has gained popularity, say Robert Poole, director of transportation policy at the Reason Foundation.

  • European, Asian, Australian, Latin American and Caribbean governments all privatized major airports after Britain did.
  • At the end of 2010, 22 percent of Europe's 404 main airports were either wholly investor-owned or had public-private ownership.
  • That same year, 48 percent of all European air passengers used private or public-private airports.

Last year, the most airport privatization continued to occur in Europe and South America.

  • Portugal sold a 50-year concession for Aeroportos de Portugal (ANA) to a French infrastructure company, Vinci Concessions, for $4.04 billion. That included the four largest Portuguese airports, five airports in the Azores, and one in Madeira.
  • Spain nearly privatized AENA, its airport and air traffic control provider, in 2011, but talks were temporarily put aside when a new government came in. In the fall of 2013, however, privatization discussions began anew. Facing huge budget deficits, Spain could see massive amounts of revenue from the sale of AENA, whose 2012 revenue was seven times that of ANA.
  • Greece owns 55 percent of the Athens Airport. While it is unclear whether the country will offer its share of the Athens Airport for sale, it does seem likely to lease Greece's 21 regional airports.
  • Turkey sought bids for a 25-year concession to finance and develop a new airport for Istanbul, which would make it the fourth largest airport in the world. A five-company consortium was selected as the highest bidder in May of last year.
  • Brazil already made long-term concessions deals in 2012 for three of its largest airports. Currently, two more airport upgrade deals are under way.
  • The United States has seen airport privatization in Puerto Rico, as part of the federal Airport Privatization Pilot Program, enacted by Congress in 1996.

Privatization is also an issue in airport screening. When lawmakers passed the 2001 law that created the Transportation Security Adminitration (TSA), they also allowed for outsourced passenger and bag screening. However, TSA Administrator John Pistole rejected pending applications for the Security Screening Partnership program in 2011, and the TSA has since stonewalled, despite new Congressional efforts to push the process along.

On the air traffic control front, more than 50 governments worldwide have commercialized their air traffic control systems since 1987.

Source: Robert W. Poole, Jr., "Annual Privatization Report 2014: Air Transportation," Reason Foundation, March 2014.

 

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