Privitization of airports essay

There are the little gray tubs on the rollers, the ticket checkers, the body scanners. But there is one hard-to-detect difference. The people working there are employed by a private contractor instead of the federal government.

Privitization of airports essay

The History of Privatization

It was the first port of call for President Lyndon B. Johnson on his trips home to LBJ Country aboard Air Force One, it was where Chuck Yeager, the first pilot to break the sound barrier, once brought a disabled jet to rest in an emergency landing.

But the timing was fortuitous, because the closure came as the city of Austin, Texas was considering where to build a new airport. But with the possibility of utilizing the prior Bergstrom Air Force Base as an airport the Austin economy was expected to have an opportunity to rebound and even improve these results from the base closure by privatizing the airport.

The trend worldwide toward airport privatization presents an exciting and dynamic opportunity Privitization of airports essay the flying public, governments, operators and investors. Following this success, the Government of Australia announced their plans to privatize fifteen more airports.

Several Latin American airports already are in private hands. Major airports in Argentina, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay and Venezuela are already concessioned or scheduled for privatization over the next two years.

Smaller airports in Central America and the Caribbean also are to be privatized. In Europe, a significant number airports have been privatized and opportunities are imminent in Germany, Portugal and elsewhere.

Governments in Southeast Asia, Africa, and the world over also are developing airport privatization plans.

Why has this marked trend emerged and why did the city of Austin choose to act in this capacity? Governments in many cases do not have the financial capacity to invest in airport expansion as well as meet other needs of their citizens.

They are recognizing that on one hand there are limits to their own knowledge of, and expertise, in managing airports; and, on the other, that such expertise can be provided by others with the effect of reducing costs, increasing revenues and improving services.

An important objective in many instances is to increase competitiveness and enhance ability to attract economic development by improving airport facilities and obtaining additional air service.

The private sector increasingly has come to view airports as an attractive investment; airports serve a dynamic growth industry--commercial aviation--and represent essential infrastructure with a near monopoly. Qualified private airport operating companies have materialized and others will evolve, while successful public airport operators are seeking to expand to provide airport management services--generally as part of broader investor groups.

As a result, substantial numbers of airports will come to be operated by a worldwide network of airport operators. These worldwide operators will engage in healthy competition with each other to be efficient and offer superior services, and thus support the objectives of the investor groups in which they participate.

The city of Austin expectations by privatizing were: Private contractors are paid for results. This gives them an unwavering focus on performance that can rarely be sustained in a public agency.

Moreover, private contractors operate under the very real possibility that if their performance is found lacking, the contract may end. This accountability is transferred directly to employees who must deliver top-notch performance to preserve their position in a private organization.

Just as private contractors are paid based on results, they can base employee compensation on performance. Contractors can pay bonuses for exceptional performance and give merit increases alone rather than longevity-based pay increments. This elicits greater productivity and effectiveness from staff.

Contractors develop expertise to compete effectively. They hire well-known experts and develop management structures geared toward continuous improvements in performance. Private contractors have the flexibility to respond quickly to changing program requirements or evolving needs of organizations.

Most importantly, if they can increase their revenue by investing in more staff and other resources, they have the flexibility to do so without the artificial constraints of limits found within the government bureaucracies.

Because of purchasing power and a conduit to leading edge technology, private companies can obtain and adapt technology to improve productivity and track performance in ways that the public sector is typically not able to match.

Governments rarely act quickly enough to develop or use leading edge technology. Private contractors tend to place a strong emphasis on customer service because, for competitive reasons, they must be acutely sensitive to their reputations in the communities that they serve.

They also bring a level of expertise in improving customer service that may not be as well developed in the public sector. Numerous studies have documented the cost savings agencies achieve from outsourcing services to private organizations. For full-service private airports, an initial investment may be required to transition to privatization, but a private contractor will tend to reduce the costs of operations.

What the results were for the city of Austin In their effort to privatize Bergstrom, the city met many challenges and issues such as environmental clean up, what do with existing structures, noise pollution and re-use issues.

The cleanup chore When Bergstrom closed init was among more than 50 military installations being closed or realigned because of defense cutbacks. There was considerable work to do before the Air Force could turn the site over to the city. Foremost among the chores was the cleanup of hazardous waste sites -- everything from landfills of household waste to jet fuel spills.

Such sites can make it difficult to reuse military installations for many purposes because of the cleanup required. Environmental Protection Agency and U.

Army Corps of Engineers, among others. Airport construction in any area could not be started without environmental clearance.Determining the potential of an airport for privatization. Not all airports are suitable for privatization, and the experience differs in the developed and less developed worlds.

In the developed world, the USA is an anomaly. The business of owning and managing airports, once considered a safe haven, is challenging even the best managers.

Higher fuel prices and an economic downturn that started in the United States and is spreading to other countries are reducing demand for air travel and causing airlines to make deep cuts in capacity.

While the impacts of these. Privatization of publicly owned airports had many arguments both supporting and against it. Privatization reduces the need of public sector investment and provides access to commercial sectors.

It reduces government control and interference enabling the organization to diversify. The security at San Francisco International Airport (SFO) looks like it does at any other airport in the country.

There are the little gray tubs on the rollers, the ticket checkers, the body. Essay Privatization of Airports By: Maiea E-mail: [email protected] For 51 years Bergstrom Air Force Base was home to fighter pilots, bombers, troop carriers and reconnaissance jets.

It was the first port of call for President Lyndon B. Johnson on his trips home to LBJ Country aboard Air Force One, it was where Chuck Yeager, the first . Government Privatization: History Examples, and Issues PAGE Executive Summary i I.

Privatization 1 II. Forms of Privatization 1 III. Privatization around the World 3 IV. Reasons for Privatization 4 V. Valuation of Assets 7 Airports (Page 16), 7.

Privitization of airports essay

and Other Assets and Services (Page 17).

The pros and cons of privatizing airport security