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https://nap.nationalacademies.org/catalog/27432/critical-issues-in-transportation-for-2024-and-beyond

Attracting Investment at General Aviation Airports Through Public–Private Partnerships

Over the past five years, the private sector has been assuming a larger role in the funding of general aviation airport development projects. This trend is expected to continue. This report focuses on the use of public–private partnerships (PPPs) to attract investment at general aviation airports. This study is based on information acquired through literature review; survey results from 26 airports representing a range of geographic locations and airport categories; and interviews with experts in airport privatization, airport law, and airport management/development. Case examples representing in-depth interviews are presented. Findings from the literature review suggest that both large and midsized PPP deals have increased at commercial service airports. These deals, which in a few cases have involved the transfer of financing and revenue risk, suggest that the trend in the aviation industry largely follows that experienced in the U.S. highway transportation industry. Findings indicate that more state and municipal governments are expressing interest in exploring ways to transfer a larger share of the construction and operational risk of their assets to a private-sector partner in the hopes of attracting more infrastructure development and revenue. One potential issue affecting how general aviation airports can attract more private investment is the heavy reliance of general aviation airports on limited federal funding from FAA under the Airport Improvement Program (AIP). The associated grant assurances as well as the unique rules, regulations, and minimum standards associated with the airport operating environment make it different from PPP arrangements in other industries. The relatively limited revenues and sources of money available to general aviation airports has meant that investment is short of what is typically available to larger, commercial service airports. Survey findings suggest this trend may be changing, as general aviation airports become more creative at monetizing their existing assets. The literature review highlighted that most PPPs in aviation are focused on larger, commercial service airports. The survey results indicate that airports are pursuing such partnerships for many reasons and are structuring them in many ways on a seemingly ad hoc basis. Many survey respondents noted that working with private partners to share risk had helped to increase project financing flexibility and in some cases helped the general aviation airport deliver projects on time and within the original scope and budget. Many airports across several states have turned to professional airport management companies in an effort to accomplish their goals. These goals include not only managing the facilities but also leveraging the expertise of these companies to increase activity and revenue as well as take advantage of the real estate management and capital development expertise. During the course of this study, it became evident that many general aviation airport officials were new to PPPs. Innovative solutions and increased efficiencies can be gained while limited government flexibilities, the misperception of a private-sector takeover of a facility, and unforeseen challenges can be downsides. However, open communication between the stakeholders, transparency throughout the process, and a willingness of government in addressing needs can help make such a project successful.

Language

  • English

Media Info

  • Media Type: Digital/other
  • Features: Appendices; Figures; References; Tables;
  • Pagination: 75p
  • Serial:
  • Publication flags:

    Open Access (libre)

Subject/Index Terms

Filing Info

  • Accession Number: 01715869
  • Record Type: Publication
  • ISBN: 9780309480567
  • Report/Paper Numbers: Project 11-03, Topic S01-17
  • Files: TRIS, TRB, ATRI
  • Created Date: Sep 4 2019 10:38AM