ABSTRACT
This chapter analyzes and discusses the appropriate ownership of airports and the use of pricing mechanisms to allocate and improve the scarce resources. Airline and passenger dissatisfaction with privatization most often occurs when the service level deteriorates and airport users face skyrocketing prices. Although the theoretical grounds for supporting airport privatizations seem solid to most economists, actual experience may be the most persuasive evidence. The techniques used to privatize airports vary in terms of the scope of responsibility and the degree of ownership transferred to the private sector. The US Transportation Department said on Monday it has granted preliminary approval to St. Louis to explore putting its city-owned airport under private management. As airport privatization gained momentum in the 1990s, there was a call for legislation to eliminate federal regulations hostile toward private airports. The only airport actually privatized under the 1996 law was Stewart Airport in Newburgh, New York.
