Re-evaluating reasons for the failure of US airport privatisation – they’re sitting on a gold mine

The failures inherent in the attempt to privatise the United States' airport system have been well documented since the procedure began almost 30 years ago, and in a piecemeal way right from the start, with only a maximum of five airports to be privatised in the original manifestation.

That was expanded to any airport with no cap under the first Trump Administration, but the fact remains that there is still only one privately leased airport (another one was long ago given back to the public sector) - and it isn't even in the mainland US; rather in a Commonwealth territory, where the citizens can't even vote for president.

There are no other potential leases of any consequence on the horizon, but that does not mean there is no interest.

In the late 2000s and early 2010s two attempts were made to lease Chicago Midway Airport, and then in 2019 the St Louis Lambert airport.

Two of the three failures were down to political pressures on the respective city mayor, but in all cases there were plenty of big name companies (both indigenous and from abroad) that tried to get in on the action. In the case of St Louis there were 18 of them.

The conclusion of a new paper from the think tank, The Reason Foundation (and CAPA - Centre for Aviation has always taken this line), is that the problem is the lack of interest from the sellers rather than the buyers, and that this is directly tied to the tax laws that require tax-exempt bonds - which constitute a major element of airport infrastructure funding, to be paid up by the airport owner if it is leased.

The upshot is that the second Trump administration might pick up where it left off the first time around and relax those laws, and The Reason Foundation is lobbying hard for that outcome.

This report includes original content from the Reason Foundation report and additional comment from CAPA - Centre for Aviation.