SPECIAL REPORT: SUSTAINABILITY The private ownership model is not yet fully accepted, of course,
especially in North America where state support from the Federal Aviation Authority (FAA) (paid for by ticket taxes), allied with tax-free public bonds, remain the most popular funding method in the US where airports are still largely regarded as being in ‘common ownership’ like bus and rail stations. Despite the recession-induced dearth of public fi nancing (the FAA’s
Reauthorisation Bill – “to authorise appropriations for the FAA for fi scal years 2010 through 2012, to improve aviation safety and capacity, to provide stable funding for the national aviation system, and for other purposes” – remains unsigned), despite 15 airports queuing up for a couple of slots on the privatisation pilot programme, and despite a shining example of a privately built low-cost airport wholly in tune with the times (Branson, Missouri), most US politicians still consider the ‘private airline public airport’ scenario to be the one that ‘works’ for them. Interestingly, one alternative method of airport fi nancing that
the US has been able to export, rather than import, is bond fi nancing, having dealt with its own local diffi culty – the Alternative Minimum Tax that was hampering airport investment (a two-year exemption was granted last year). Towards the end of 2009 there was a plethora of bond issuing activity at such diverse locations as Prague (where the privatisation of Ruzyne Airport is suspended, possibly indefi nitely); London (BAA); Madrid (Ferrovial); New Zealand; India and China. Neither have any of the privatisation models yet caught on in Canada,
where the ‘not-for-profi t ‘ model has been employed at the major airports (Toronto, Montréal, Vancouver etc) since Transport Canada transferred operational responsibility to corporatised entities run by local authorities, in 1994. The method is widely regarded there as being both successful
and appropriate, although many airlines may not agree as charges at some airports are amongst the highest in the world. Intriguingly, the 1994 Federal Government reorganisation led to one
of the rail companies that Transport Canada had responsibility for – CN Rail – being privatised by IPO, but unlike the US, which introduced its airport privatisation pilot programme in 1996, Canada has not considered such an option itself. There is a great deal of academic debate about the value and
effi cacy of privatisation. The well known economist, Joseph Stiglitz, argues that this level of ‘semi-privatisation’ of the variety found in Canada usually offers the best option – with local stakeholders (perhaps even airlines) determining the future direction of the facility while it is free to use its profi ts to the betterment of the region as a whole, a judgement best left to local representatives of the city. He goes on to say that there has been too much polarisation around
government ownership versus outright privatisation and that there are ‘halfway houses’ and other alternatives that merit investigation. Right now there is a hiatus in privatisation activity. When that
activity picks up again (probably with an IPO/strategic investor deal at Korea’s Incheon International Airport later this year), the debate will resurface.
About the author David Bentley is a director of Big Pond Aviation and editor of Airport Investor Monthly. *The Global Airport Investors Database is researched by Big Pond Aviation and published by Centre for Asia Pacifi c Aviation (CAPA).
AW
AIRPORT WORLD/AUGUST-SEPTEMBER 2010
29
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88