ABSTRACT
Chapter 5 asks what kind of airport ownership arrangements promote efficiency and service quality at reasonable cost. Disappointing airport performance under traditional public ownership led to many airports being sold to private owners. The pattern of airport ownership and the record of different ownership forms are considered. The chapter notes that private ownership changes managerial objectives and increases external monitoring of performance. There is some evidence it improves airport efficiency but, without either sufficient competition or effective regulation, much of the benefit would accrue to shareholders. Chapter 5 also considers the quality of airport investment decisions. It is not uncommon for investment projects to cost several billion dollars. But the record is mixed, with a number of large projects delivered very late and far over budget. The chapter argues for stronger incentives for careful investment by having projects independently assessed using professional cost benefit methods. Such arrangements would better identify projects likely to yield clear benefits to the airport users who ultimately will pay for them.
