Airport Privatization

873 Words2 Pages

Airports are key enhancers of commerce and trade; they generate massive transportation and key economic benefits (Vasigh, 2007). Privatization of airports relates to transfer of ownership of airport from public ownership sector to private ownership (Jobs Consultancy, 2007). Privatization process aims at increasing of efficiency, competitiveness and viable financing of airports. Considerations on whether to privatize an airport are made by governments and the decision has a long-term impact that follows (Jobs Consultancy, 2007). A complete and thorough review of the decision is made for a government to come up with a decision whether to privatize an airport or not. The complete review is necessary to ensure the decision is viable financially speaking and to avoid making a mistake that may be chaotic in the long run.

Privatization could be full privatization or just partial privatization. Financial implications of the idea of privatization must be thoroughly revised so that a clarified and transparent decision would be made. Ownership of airports takes place in many different forms. It could be through management articulating new investment programs such as selling of assets; management contracts; and private and public partnership agreements. Objectives of airport privatization includes modernization of both land and air-side facilities of the airline, minimize public or rather government interruption in airport management and operations, facilitate utilization of private capital and funding, building and financing airports, and or finally improving of service quality and efficiency (Vasigh, 2007).

Traditionally, airports have been managed, operated and owned by the government entities. United Kingdom started privatizing its ai...

... middle of paper ...

...n there long enough in the United Kingdom and hence most airports in UK are privately owned such that they generate a lot of profits due to passenger traffic despite the high government charges in airline fees.

In Conclusion privatizing of airports is generally meant to facilitate private financing for airport development, increase efficiency and upgrade its facilities. This has largely contributed, to fully or partial privatization of airports. Airports sought to expand and diversify their financial sources of funding for development purposes.

List of References

Adam Smith Institute, (2002). Plane Commonsense.

Retrieved from: http://adamsmith.org/80ideas/idea/70.htm

Job Consultancy, (2007). New Interest in US airport Privatization.

Retrieved from: http://www.leighfisher.com

Vasigh, (2007). Airport Privatization. Retrieved from: http://www.airports.org

More about Airport Privatization

Open Document