At the Economics & Finance Conference ...

... this week in Phoenix, a side discussion turned to the proposed privatization of Chicago’s Midway Airport, which had also been highlighted at one of the sessions. The conference is hosted annually by Airports Council International – North America. Chicago mayor Richard Daley has already privatized the Chicago Skyway expressway and the massive underground parking complex downtown. He has proposed privatizing Midway under the auspices of the FAA’s airport privatization pilot program, which has had little success to date. Privatization of airports, commonplace in most of the world, has never really taken root in the U.S. for a variety of reasons; however, some suspect that could change if Daley is successful. The Chicago mayor is seen as someone who gets the deal done, or he doesn’t go public with it in the first place. And, it may be said that his greatest strength as mayor is his ability to get business interests on board. Roy Williams, who popped onto everyone’s radar screen during Hurricane Katrina as the airport director at New Orleans, is now a consultant with CH2M HILL. He relates that the day Daley gets the Midway deal done, he can envision the photo op with the mayor holding the big check. That moment, Williams predicts, will send shock waves through political offices in cities nationwide, and the movement toward similar activity nationwide could take hold. “This changes everything,†he says. David Plavin, long-time ACI-NA president and today a consultant with his firm dzpConsult, Inc., speculates that the primary reason for the Midway move is the attraction of revenue diversion, a no-no otherwise but part of FAA’s pilot program. (Of course, getting a big chunk of change is also always attractive to politicians, either to spend on new programs or to reduce debt.) A central component of the pilot program is the support of airlines. Plavin questions the notion of a subsequent tidal wave. The biggest question, he says, is, What will the mayor need to give Southwest Airlines – the dominant carrier at Midway – to get its agreement? Therein lies the key, in his estimation, as to how attractive the move is to other mayors. Hottest topic at the meeting: The decision last week by an administrative law judge to turn down the City of Los Angeles’ attempt to change its rates and charges methodology at LAX for some of the carriers. It’s a big issue, one that officials fear could reverberate throughout the U.S. industry. The DOT Secretary will make a ruling on the judge’s recommendations June 15. More on the conference to come in the print edition on AIRPORT BUSINESS. Thanks for reading. jfi