The idea of a government owning an airport is not only ludicrous, it’s also illegal.
The who owns airports is a question that is often asked. It has many answers, but one of the most important ones is that local governments should not own airports.
Why Your Municipality Shouldn’t Own The Airport
on September 18, 2021 by Gary Leff
While the United States has a reputation for less government and more free enterprise throughout the globe, almost everything regarding aviation is an exception. Airlines in the United States were already highly subsidized before to the pandemic, but an explicit $79 billion in appropriations (not including tax relief and contractor subsidies) emphasized that.
However, it goes far beyond than that. In the United States,
- Governments are the owners of airports.
- At most airports, the government is directly responsible for airport security.
- The government is in charge of air traffic control.
From the time a passenger enters a government airport, passes through a government checkpoint, and has the movements of their aircraft determined by federal officials from gate to gate, they are much more in the hands of government than private business. Almost everything that is ostensibly private is controlled at a very fine degree.
In both security screening and air traffic control, best practices would remove the function of regulatory oversight from the actual performance of tasks. Effectively, the TSA monitors itself, which is problematic in terms of accountability. Similarly, controlling aircraft movement results in more expensive service, crowded airspace, and restricted technological investment.
In many parts of the world, screening is done privately and regulated by the government, air traffic control is much more efficient in other parts of the world (NavCanada is a great model, handling not only Canadian traffic but also traffic across the North Atlantic), and airports are privately owned, providing a significant revenue opportunity for local governments.
The Reason Foundation looked at how much major airports in the United States are worth. A total of 31 airports may be valued $131 billion. As an example,
- O’Hare International Airport in Chicago is valued between $7 and $10 billion.
- The Phoenix Airport is estimated to be valued between $3 and $4.5 billion dollars.
- The value of LAX is estimated to be between $12 and 18 billion dollars.
- The cities of Dallas and Fort Valued are worth between $8 and $12 billion.
Airports are worth billions of dollars, yet despite the fact that they are nearly always owned by local governments, they seldom contribute to paying for local services. Because of federal rules, local governments are not allowed to collect airport net income (profit). This is also unusual in the globe; other countries’ airports earn significant income for their governments.
So, rather than owning the airports, the way to access this wealth is to invest in them. Taxpayers have enormous assets that they do not profit from, but this does not have to be the case. Because federal regulations enable airports to be leased out for a long time, with leasing income supporting local government budgets, airports may be leased out for a long time. You may choose whether the funds should be used to pay down debt (or cover long-term pension obligations), reduce taxes, or support social services. But now it’s mainly money that’s been locked up (a handful of airports are grandfathered out of this, including the Port Authority of New York and New Jersey).
Because U.S. law requires airport bonds to be paid off in the case of a lease, you’ll find both a gross and net value for each airport in the Reason research.
Consumers appreciate certain aspects of privately-run airports – they tend to do a better job delivering services that customers will pay for – but there are other drawbacks. Anyone who has flown through Sydney Airport knows that they are routed via duty free for a purpose, but keep in mind that even Chicago O’Hare and Dallas – Fort Worth airports have eliminated people movers to encourage travelers to walk more and visit shops.
Airports aren’t the only assets that have the potential to be tapped yet are seldom mentioned. Did you know that the federal government owns more than 600 million acres of land, or almost a quarter of the total land area in the United States?
More From the Wing’s Perspective
The are international airports federal property is a question that has been asked for years. It seems like the answer is no, but it’s not as simple as that.
Frequently Asked Questions
Does the government own the airports?
The government does not own the airports.
Who owns the airport?
The airport is owned by the government.
Are airports federally funded?
- which u.s. airport is privately owned
- which airports are owned by the federal government
- list of privatized airports
- who owns international airports
- privatized airports in the world