Worcester Blog

Great story on Airport Privatization from Austin Business Journal.

ABIA officials consider going private

Despite taking out a $400 million loan eight years ago to build Austin-Bergstrom International Airport, the city's thinking about becoming a landlord and leasing it out to a private company for hundreds of millions of dollars. City officials are debating that prospect privately and so far have not announced plans to pursue it, Assistant City Manager Rudy Garza says.

"Literally, we have spent ten minutes worth of discussion," he says, primarily spurred by plans by Chicago to lease its Midway airport. "It's really a stretch to say we're considering leasing the airport. Garza calls the leasing idea a "very limited opportunity -- if in fact we had any interest in pursuing the challenges and barriers that come along with it," he says. "We literally cannot say whether its a good thing or a bad thing -- whether the pros outweigh the cons -- we don't know."

But City Manager Toby Futrell will present the idea to city council members sometime in the future, Garza says, for the purpose of "reviewing and discussing the concept." The proposal would mirror that of at least six other U.S. cities that have applied to the Federal Aviation Administration to go private under that agency's Airport Privatization Pilot Program. FAA says Congress established the program in September 1997 to determine whether airport privatization could produce new sources of capital for airport development.

It is limited to just five participants, and only one large hub commercial-service airport can be leased under the program. Only general aviation airports can be sold. To be approved, FAA and most of the airlines using the airport have to agree. So far, Stewart International Airport in Newburgh, N.Y. is the only airport to go private under the program in March 2005. New Orleans Lakefront Airport has a pending application for final agency action. That leaves three positions available for interested airports, the FAA says.

Chicago submitted a preliminary application in September to take its Midway International Airport private, saying the arrangement would improve operations, safety and security. Three other airports have applied to the program, but later withdrew their applications, the FAA says. Niagara Falls International Airport in Niagara Falls, N.Y.; Rafael Hernández Airport in Aguidilla, Puerto Rico; and Brown Field Municipal Airport in San Diego all withdrew their applications in 2001.

If approved, Midway would be the largest airport to go private under the program. FAA ranks it 30th in the country by number of boarding passengers in 2005. It would be the only large-hub airport allowed under the pilot program.