Are private airports ready for liftoff?

Airports are valuable -- and cities could put the money from privatization toward more pressing issues.


August 21, 2020

Cities are struggling to pay their workers and ditching growth plans. The Atlantic has a fix: Turn airports private.

One dealmaker estimated that investors would pay 17x an airport’s annual cash flow for one.

It may be a billion-dollar payday that cities could put toward more pressing issues.

So what does ‘privatize’ actually mean?

Airports are insanely complicated, but here are some quick facts:

  • Every commercial airport in the US gets federal money, except for Branson Airport in Missouri. That means the government runs them.
  • In 2018, Congress cleared any airport in the US to go fully private.
  • Privatizing doesn’t mean handing over the keys to an investor — cities would only lease the space.

Privatized airports tend to bring 2 things

More people and more stores. Companies want to make extra money, which means swanky new shops packing the terminal.

In 2013, a holding company took over Puerto Rico’s Luis Muñoz Marín International Airport.

It opened 2 terminals and added 118k feet of retail space. A year later, ridership was up by 3.5m people.

But usually, someone gets cold feet

St. Louis, Chicago, and Denver have all tried to turn their airports private. They’ve never stuck the landing.

A British transit company bought New York’s Stewart Airport in 2000 — but it backed out 7 years later because it couldn’t turn a profit.

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.