The National Academies

ACRP 03-46 [Active]

Implementing Airport Privatization: Guidance for Airport Decision Makers

  Project Data
Funds: $350,000
Staff Responsibility: Theresia H. Schatz
Research Agency: WSP
Principal Investigator: Louis Wollinetz
Effective Date: 4/24/2018
Completion Date: 4/23/2019

There is a broad range of strategies available for private sector participation in airport management, operations and development. This range extends from the lowest level of private involvement, such as contracting out for services, to the highest private sector involvement, such as the sale of long-term lease of the entire airport. In the United States, there are many examples of the former, with partial privatizations such as service and management contracts and terminal development, but very few of the latter where the airport has been fully privatized and the complete control of the operation is vested with a private entity through a long-term lease or sale.  
Recently, there has been increased interest in greater privatization in the U.S. and some major airports are undertaking major privatization efforts for terminal and airport modernization and expansion. There are various financial and non-financial reasons an airport may want to consider some form of privatization, such as capital infusion, attracting outside expertise, or generating greater revenues. 
ACRP Report 66: Considering and Evaluating Airport Privatization provided significant background on the various types of privatization options and case studies on several international airports and U.S. privatization before 2012. Research is needed to build on the guidance provided in Report 66 and to leverage experience from more recent privatization activity in the U.S. and around the world to provide best practices for selecting a privatization model, evaluating proposals, and implementing the model. 
The objective of this research is to expand upon ACRP Report 66 to (1) identify lessons learned in U.S. and international airport privatization models and (2) provide airport practitioners and policymakers with guidance on strategies and capabilities necessary for achieving the benefits of successful implementation of privatization.  This research should focus on developer financing/operation and long-term lease or sale of commercial service airports/terminals (as initially referenced in Report 66, page 1 in Section 1.3, Figure 1.2.).  The guidance should address, but not be limited to:  
  • Considerations for selecting a privatization model to include:
    • Risk and control transfer, including the underlying complexity;
    • Optimizing financial and non-financial objectives;
    • Innovation and creativity;
    • Stakeholder engagement;
    • Political and governance;
    • Economic impact; and
    • Airport reputation.
  • Best practices for the solicitation, engagement, assessment and selection of the private partner, to include:   
    • Alignment of organizational goals;
    • Financial  considerations;  
    • Operational considerations;   
    • Qualifications and track record or experience; and
    • Transparency of the process.
  • Best practices for the implementation and oversight of privatization to include:
    • Airport governance (ownership structure and decision making);
    • Laws and regulations (federal, state, and local);
    • Contractual audit and compliance;
    • Performance management (e.g., KPIs, etc.); 
    • Leadership and organizational culture; and
    • Key stakeholder engagement.
The ACRP is seeking the insights of proposers on how best to achieve the research objective. Proposers are asked to develop and include a detailed research plan for accomplishing the project objective. Proposers are expected to describe research plans that can realistically be accomplished within the constraints of available funds and contract time. Proposals must present the proposers' current thinking in sufficient detail to demonstrate their understanding of the issues and the soundness of their approach to meeting the research objective. The work proposed must be divided into tasks and proposers must describe the work proposed in each task in detail.
The research plan should include appropriate interim deliverables, for ACRP approval, that include at minimum:
1. Case study examples that incorporate the concepts in Chapter 8 of ACRP Report 66 that explains the benefits and challenges of privatization in the U.S. Refer to all the Tables to identify all factors that contributed to the outcome of the privatization models pursued.   
2. A comparative analysis of the key performance indicators of specific private and publicly owned airports. Include various models of privatized airports/terminals and include dimensions that reflect the values of U.S. public airports (e.g., economic development, labor policies, social participation [i.e., DBE], etc.).
3. An interim report that describes work done in early tasks with an updated work plan for remaining tasks; and a detailed outline of the final guidance document that will require ACRP approval.  
The research plan should include other appropriate checkpoints with the ACRP panel, including at a minimum (1) a kick-off teleconference meeting to be held within 1 month of the Notice to Proceed and (2) one face-to-face interim deliverable review meeting, as well as web-enabled teleconferences tied to the panel review and ACRP approval of other interim deliverables deemed appropriate. 
The final deliverables will include: (1) a guidance document that meets the research objective and includes an updated glossary from Report 66 as necessary; (2) a presentation to be used to communicate findings to key stakeholders, both technical and non-technical, in the industry; (3) a contractor’s final report that documents the methodology of their entire research effort, including any background information and the research team’s recommendation of research needs and priorities for additional related research; and (4) a stand-alone technical memorandum titled “Implementation of Research Findings and Products.”

TATUS: WSP has been contracted. Research is underway.

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