As airports across the country grow, they are increasingly looking toward a new engine to drive the growth: private investment.
Overseas, many airports are run by investor-owned companies -- including London Heathrow, Frankfurt Airport in Germany, Paris-Charles DeGaulle Airport, Osaka International Airport in Japan and Sydney Airport in Australia.
"There's certainly a long-term, 30-year global trend that's continuing," said Bob Poole, director of transportation policy at the Reason Foundation and an advocate of airport privatization.
Airports are facing expensive projects to add terminals and gates for a growing number of travelers.
This year, Congress as part of a broader Federal Aviation Administration reauthorization bill passed legislation for private investment in all or part of an airport through long-term leases, expanding beyond a federal pilot program for airport privatization. Privatization would still require airline and FAA approval.
In St. Louis, city officials are studying whether to privatize St. Louis Lambert International Airport. Other airports -- including New York's John F. Kennedy and LaGuardia, and Los Angeles International -- have struck smaller public-private partnerships for terminal upgrades or for a new automated people-mover train.
"One of the trends is to say, 'Well, maybe I can get the upfront money from a private entity, and I will turn that asset over to them for a period of time, and at the end of that period they will turn that back to me in good condition," said Steve Van Beek, head of North American aviation at consulting firm Steer.
At Hartsfield-Jackson International in Atlanta, officials have spent years planning a few smaller public-private partnership projects, including a hotel next to the terminal, a recycling and composting facility, and a cargo facility.
But those projects have taken years longer than expected to complete.
The idea of an airport hotel has been in the works since 2014. By late 2015, a winning team, Majestic Carter Atlanta Mixed Use LLC, was chosen for the contract with plans to build an InterContinental Hotel.
In early February 2016, then-Atlanta Mayor Kasim Reed said the hotel would be completed in about two years. Later that year, Reed, airport officials and the developers held a news conference to lay out plans for the "grand facility."
Now, 34 months after February 2016, the hotel has not yet begun construction.
Current airport general manager John Selden says the project is awaiting work by the private development team.
"We're waiting on their due diligence for their financing," Selden said. "They're on their third extension."
In Atlanta and most airports with federal funding, airport revenue must be used for airport expenditures and cannot be diverted to other uses like schools or city streets.
A terminal is key to an airport's operations, Selden said. In Atlanta, he said, "Do we really want to let somebody build a concourse here? If you can build the terminal ... I think there's more money to be made."
One prominent advocate of airport privatization globally is former Hartsfield-Jackson General Manager Angela Gittens.
Gittens, who ran the Atlanta airport from 1993-98 and today leads industry group Airports Council International, issued a statement in June saying there is "a global need to finance new airport infrastructure and if government spending cannot be relied upon as it has been in the past then there is ample evidence of the value created by private investment in airports around the world."
There is private-sector participation in 51 of the 100 busiest airports in the world, according to the Airports Council International.
But others are more skeptical.
In the U.S., whole airport privatizations are unlikely and "can have more adverse long-term outcomes for the public," according to Fitch Ratings managing director Cherian George. More likely to happen is increased use of public-private partnerships, according to George.
An airline industry group, the International Air Transport Association, has voiced opposition to airport privatization.
Association Chief Executive Officer Alexandre de Juniac issued a statement in June saying "it is wrong to assume that the private sector has all the answers. Airlines have not yet experienced an airport privatization that has fully lived up to its promised benefits. Selling airport assets for a short-term cash injection to the treasury is a mistake."
Business on 12/28/2018