Airport Privatization:

Issues Related to the Sale of U.S. Commercial Airports

T-RCED-96-82: Published: Feb 29, 1996. Publicly Released: Feb 29, 1996.

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GAO discussed airport privatization, focusing on the: (1) extent of private-sector participation at U.S. commercial airports and foreign countries; (2) incentives and impediments to more extensive forms of commercial airport privatization; and (3) implications of extensive privatization for major stakeholders. GAO found that: (1) U.S. commercial airports are owned and operated almost exclusively by municipalities and states, but the private sector delivers most services and finances a significant portion of airport development; (2) a large portion of airport development is financed through long-term debt raised in capital markets; (3) foreign airports are owned and operated by national governments, but recently these governments have attempted to sell or lease these airports to the private sector in order to discontinue government subsidies; (4) the Federal Aviation Administration (FAA) does not support entire airport privatization because of the potential to divert an airport's revenues; (5) legal and economic constraints limit more extensive U.S. privatization; (6) the effects of privatization on municipalities, airlines' and passenger's, costs and the federal government depends on how it is implemented, whether airports charges to airlines continue to be regulated, and whether private airports would have access to federal grants and loans.

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