The FAA is bringing airport executives, airlines, operators and investment firms together Tuesday to examine expanded use of private capital for airport development, particularly at small and medium-hub airports. The daylong FAA event in Washington is intended to examine funding models and the regulatory limits surrounding private investment.
“The event will convene airport executives, air carriers, operators, investment firms, industry groups, and regulatory leaders to examine how private capital can supplement traditional funding, clarify regulatory/policy boundaries, and address infrastructure needs—particularly for small and medium-hub airports,” the FAA said.
Funding Airport Projects
The event agenda includes discussions with airport sponsors, airlines and investors from BlackRock, Carlyle, Apollo, Goldman Sachs and other firms. FAA officials will also address existing airport funding programs and the regulatory requirements that apply when private money is used for airport development.
Traditional federal funding remains a major source of airport capital. The FAA awarded nearly $615 million through the Airport Improvement Program in August for runway, taxiway, terminal and other projects at airports around the country, including numerous GA facilities. That funding round included projects at more than 100 airports nationwide, according to FAA grants.
Traditional federal grants and airport-generated revenue remain major sources of funding for airport development. Tuesday’s event is focused on where private capital could supplement those existing sources and what regulatory or policy changes may be needed to encourage additional investment.
Existing Privatization Program
The FAA also operates an investment program that allows public airport sponsors to sell or lease airports to private operators under certain conditions. Congress removed limits on the number and types of participating airports in 2018, but participation has remained limited. As of February, only Luis Muñoz Marín International Airport in Puerto Rico and Hendry County Airglades Airport in Florida were listed in the program.
Tuesday’s discussions are broader than outright airport privatization and focus on ways private capital could supplement existing government and airport funding for future projects.
Copying Carney?
(Whose arithmetic doesn’t make sense as he won’t sell the land of airports like YVR and YYJ that are run by local consortiums of governments and professional groups. (Accounting and Engineering licensing organizations for example. I do not know the debt load of such airports.)
FAA’s proposal ability to sell something - does that include primary land (runways and control towers)? Probably not.
As for non-aviation use of some of the land, there are airports with activities like storage and manufacturing because there is not enough aviation demand.
Of course Canada created a separate non-profit no-shares organization to run the ATC system.
After a bit of vibration after startup it has worked well for decades. Depends on cooperation between ‘stakeholders’ in the management consortium - airlines through organizations, GA through organizations, unions.
Nav Canada improved service and sought revenue (it improved handling of flights so that more would come through its airspace thus increase fees). GA pilots may not like paying fees for service.
The federal government has safety oversight.
What could possibly go wrong with accepting private money for public infrastructure?
Generally these public private ventures end up costing the public dearly. Look at toll roads. We have one public/private airport venture in Fort Worth and there is almost no access for small GA aircraft due to cost.