After years of anticipation and disappointments, airport privatization in the U.S. (commonly referred to as “public-private partnerships” or “P3s”) seems finally ready to take off. A number of P3 transactions are currently in the works with the promise of more to come. This has investors, operators, and U.S. public sector airport owners sitting up and taking notice.
The history of airport P3 transactions in the U.S. has been disappointing. Over the past 20 years of the Federal Aviation Administration’s (FAA’s) Airport Privatization Pilot Program (APPP), only two airports have successfully navigated the process: Luis Munez International Airport (LMM) in Puerto Rico and Stewart Airport in Newburgh, New York. (Stewart reverted back to a publically owned airport in 2003 when it was purchased by the Port Authority of New York/New Jersey.) Several failed attempts at Chicago Midway Airport (MDW) and elsewhere in the U.S. have led to the widespread belief that it cannot happen here.
ICF believes that within the next five years, partial privatizations - in the form of P3s -will become commonplace in the U.S. as an important option for U.S. airports to upgrade infrastructure and deliver a better passenger experience. Terminal privatization, gate privatization, operating contracts with investment requirements and commercial concession operation will become the norm.
Recent U.S. airport privatization activity, along with construction and development needs, opens the door for new ways of delivering airport projects in the U.S. Watch ICF Vice President Eliot Lees providing his take on this hot topic at GAD World Paris.