State of the Industry Report

We live in fractured times, with fractious leadership and a Congress that is split in two. FAA and the system are being funded by a 19th Congressional continuing resolution, the ongoing compromise between Democratic and Republican legislators on the Hill...

Kelly L. Johnson, A.A.E., the director of the Northwest Arkansas Regional Airport and recently appointed chair of the American Association of Airport Executives, concurs. Says Johnson, “Government should step out of the way. We need to rethink airports, and it’s going to be imperative that we rethink all of aviation.” That, she adds, means taking a new look at how we fund airports.

Johnson say the cornerstone of her year as AAAE chair will be an effort to find new ways to fund airport infrastructure.

Another funding mechanism that is being heightened in the discussion is privatization. The system, many agree, will need an injection of private investment as cities and counties grapple with the economic challenges they now face. The tide, they think, may be turning.

In the U.S., privatization (there are exceptions, such as private terminal investment at JFK) generally means contracting of services or management. The global model can mean private companies that build, own, and operate airports, or do so under very long-term leases, a la Canada. Last year a privately financed, built, and now operated airport opened in Branson, MO, and industry watches as it embarks on a different financial model. It has commercial service; it offers FBO services — yet, as a financial model it is a work in progress.

Comments Johnson, “Privatization has an opportunity to play a large role. We’re watching Branson to see how that plays out.” She points out that the airport privatization pilot program headed by FAA needs to be refined to encourage investment while ensuring that the system and its assets are protected.

Says ACI-NA’s McElroy, “Within our membership we have airport directors that would love to see privatization and we have those who would oppose it, so our position has been you need to make the existing pilot program as effective as it could be to have an accurate test.

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