Airport Privatization Could Take Off

By Benita M. Dodd

For years, Georgia has been trying to site an airport to supplement Atlanta’s Hartsfield-Jackson International Airport, the busiest passenger airport in the world. Suggestions have been all over the map, from Dawsonville to Macon to Chattanooga. Now a plan to make a Gwinnett County airport a regional relief valve – by privatizing it – finally holds promise.

The 600-acre Briscoe Field is a general aviation airport about 37 miles northeast of Atlanta and a mile outside Lawrenceville. Owned by Gwinnett, its 6,001-foot runway and parallel taxiway can handle light general aviation and most corporate jet aircraft. The airport handled 83,458 aircraft operations and served as a base for 236 aircraft in the most recent 12-month reporting period ending March 2009. Its 2010 total economic impact was about $79 million, with $47 million in direct impact.

Under the 15-year-old Airport Privatization Pilot Program, the Federal Aviation Administration (FAA) can select up to five airports for privatization. Despite the program’s age, the privatization process has not been easy.

  • A deal to privatize Chicago’s Midway Airport fell through in 2009. This week, Chicago asked the FAA for a sixth extension on its application.
  • In September 2009, the FAA accepted the city of New Orleans’ preliminary application for Louis Armstrong New Orleans International Airport. In October 2010, the airport withdrew from the program.
  • In December 2009, the FAA accepted the preliminary application for Luis Muñoz Marín International Airport in San Juan, Puerto Rico. The airport, the busiest in the Caribbean, continues to actively pursue privatization.
  • Outside Miami, Hendry County Airglades Airport’s preliminary application was accepted last year.
  • The FAA gave preliminary approval to Briscoe’s application in May 2010 and the Gwinnett County Commission is expected to announce a request for proposals soon.

Qualified private investors must deal with local political power struggles and neighbors’ concerns, win support of airport carriers and cope with the fallout of the economic downturn.

In Briscoe Field, Gwinnett County faces a promising opportunity and the potential to become home to a secondary commercial airport, an origination-to-destination airport. At Hartsfield-Jackson, more than 75 percent of passengers are taking connecting flights, just “passing through” the airport.

Opponents cite the downside of Briscoe’s privatization as increased traffic congestion, more flights and noise, all of which they say would hurt property values nearby. But a recent study found that no homes would be affected by noise from additional flights.

That study, commissioned by Hartsfield-Jackson for the FAA to seek out a reliever airport, also dismissed Briscoe as an unsuitable site. The study maintained that the runway was too short; the airport’s proximity to Atlanta’s would interfere with Hartsfield-Jackson’s flight path and it would cost $2.2 billion to upgrade.

Given that Briscoe’s proposed 10-gate commercial service would relieve Hartsfield-Jackson, not replace it, and serve aircraft no larger than 737s, the study’s assumptions – including a 9,000-foot runway– appear to be costly overkill.

Proponents see the privatization and scheduled service approach as an enormous economic boost for Gwinnett and the region, and evidence from across the nation indicates they are correct. Privatization will take the cost of operating the airport off taxpayer books and create a positive revenue stream for Gwinnett County, whose shrinking tax digest shows no signs of improving soon. While Gwinnett maintains its AAA bond rating, it owes nearly $160 million, making it the county with the third-highest debt in Georgia, according to Moody’s.

The FAA pilot program streamlines privatization and enables the expansion to commercial scheduled service, leading to growth in jobs and related industries at and around the airport. Tourism could grow through international flights. Now, international passengers headed to Briscoe must first land and clear customs at DeKalb-Peachtree Airport. Briscoe falls outside the current Port of Atlanta customs clearance boundary, which was drawn in 1962, when Atlanta’s population was smaller than the current population of Gwinnett.

Three companies have expressed interest in Briscoe’s privatization and commercial scheduled service. Propeller Airports Briscoe Field, Inc. appears the likely successful bidder. Its parent company’s executives and advisors have lengthy experience in the aviation industry. Transportation expert Robert Poole of the Reason Foundation notes that the company claims access to $4 billion in investment capital, “which is plausible, given the $100-plus billion amassed by various infrastructure investment funds over the last several years.”

A recent Economist magazine article focused on airport management and “grim” airports. It quoted Andreas Schimm of Airports Council International, an umbrella group, saying that in the past airports were “administered rather than managed” to serve state-owned airlines. “Governments now try to run airports on commercial lines, but few do it well. Privatization could help.” It can help in more ways than one, for Gwinnett and metro Atlanta.

Benita M. Dodd is vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (August 5, 2011). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.

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