Airport privatisation across the Atlantic: Contrasting examples of success and failure, aspiration and reticence in the USA and UK

Abstract

For many reasons, partly financial, partly political and partly historic, the privatisation of airports in the USA (and Canada) has never really ‘taken off’. Even taking into account the recently concluded transaction to lease the major airport in Puerto Rico, the track record of deals since the Airport Privatisation Pilot Program was instigated in 1996 is abysmal. In contrast, the UK embraced airport privatisation to such a degree since the mid 1980s that it is now one of the most privatised countries in the world in terms of airport infrastructure. In the UK, political factors were very much at the forefront of this tendency. Only one airport group held out against the movement, but it too has now succumbed to the tide and, belatedly, has both peculiarly and innovatively concocted a scheme by which at one and the same time it will sell part of its own equity to a strategic partner in order to invest in another airport on a ‘no win-no fee’ basis to the partner. This paper seeks to examine the underlying reasons behind this dichotomy while posing the question, ‘has airport privatisation to date really been of benefit to the consumer?’