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.