For Immediate Release
August 14, 2018
Contact: Marcia Alexander-Adams
Phone: (202) 267-3488
The airport privatization pilot program is designed to allow airports to generate access to sources of private capital for airport improvement and development. The 1996 Reauthorization Act, Title 49 United States Code §47134, authorized the Federal Aviation Administration (FAA) to establish the pilot program. The 2012 Reauthorization Act increased the number of airports that could participate in the program from five to 10. The same restrictions on participation apply. Only one large hub airport can participate in the program, and one of the airports must be a general aviation airport. Commercial service airports can only be leased and general aviation airports can be sold or leased. Most commercial service airports in the United States are owned and operated by local or state governments. Public-use general aviation airports are both publicly and privately owned.
AIRPORTS IN THE PRIVATIZATION PROGRAM
St. Louis Lambert International Airport (STL)
St. Louis Lambert International Airport (STL) is a medium hub airport in St. Louis, Missouri, owned and operated by the City of St. Louis. The airport is located about 10 miles northwest of St. Louis and is the largest airport in the State of Missouri. The airport has four runways, and the dominant carriers are Delta and Southwest Airlines. Several other airlines also provide service, including American, United Airlines and regional carriers.
The City said in its preliminary application that it thought airport privatization would be a benefit to the airport, the City, and the Metro region. Their goal is to create Public-Private Partnerships that would use innovative ideas to improve airport operating revenues with a private operator. Some of the ideas include maximizing additional parking revenue and increasing cargo revenue by utilizing additional land assets. The City anticipates that this venture would expand regional economic development and align with other multi-modal transportation projects, such as highways and rail to support airport infrastructure.
Status: The FAA accepted the City’s preliminary application to participate in the program on April 24, 2017. The City is authorized to select a private operator and submit a final application.
Hendry County Airglades Airport (2IS)
Airglades Airport, a general aviation airport in Clewiston, Florida, is located 80 miles from Miami International Airport. The airport is owned and operated by Hendry County. The airport has a 5,603-foot runway, a general aviation terminal and hangars. The FAA approved Hendry County’s preliminary application on October 18, 2010.
Status:The airport sponsor and private operator are preparing a final application.
Luís Muñoz Marín International Airport (SJU)
Luís Muñoz Marín International Airport, a medium-hub airport is owned and operated by the Puerto Rico Ports Authority. The FAA approved the Authority’s final application for the Luís Muñoz Marín International Airport on February 25, 2013.
Status: Aerostar Airport Holdings is operating the airport under a 40-year agreement with the Puerto Rico Ports Authority.
AIRPORT INFORMATION IN THE DOCKET
To review information on the airports submitted to the docket go to: www.regulations.gov.
Hendry County Airglades Airport — FAA Docket Number 2010-1052
Luís Muñoz Marín International Airport — FAA Docket Number 2009-1144
St. Louis Lambert International Airport — FAA Docket Number 2017-0325
AIRPORT PRIVATIZATION FACTS
What does FAA’s acceptance of the preliminary application mean? An airport sponsor who wants to participate in the airport privatization pilot program must receive preliminary FAA approval, through an application process to reserve one of the slots available under the program. Once the FAA approves the preliminary application, the sponsor can select a private operator to manage the airport, negotiate an agreement with the private operator, and prepare a final application for submittal to the FAA.
Application process. A public airport sponsor and the private operator selected to purchase or lease an airport may request participation in the pilot program by filing an application for exemption under Title 49 United States Code § 47134(a).
- A public sponsor may submit a preliminary application for FAA review and approval. It must contain summary narratives identifying the objectives of the privatization initiative, a description of the process and a realistic timetable for completing the program, current airport financial statements, and a distribution ready copy of the request for proposal/qualifications. The FAA has 30 days to review the preliminary application.
- When the FAA approves the preliminary application, the applicant is guaranteed one of the slots in the program.
- The airport sponsor may select a private operator, negotiate an agreement, and submit a final application to the FAA. There is no timeline for the FAA to complete its review of the final application.
- After the FAA reviews and accepts the final application and lease agreement, it publishes a notice in the Federal Registerfor a 60-day public review and comment period. During this period, the Department of Transportation, FAA, and Transportation Security Administration may conduct a public meeting in the community to solicit public comment.
- The FAA completes its review, prepares its Findings and Record of Decision (ROD), addresses the public comments in the ROD, and publishes the agency decision.
- If the FAA approves the privatization application in the ROD, it monitors the legal settlement and transfer of the airport from public owner and sponsor to the new private operator and sponsor.
Number and category of airports. The legislation authorizes 10 airports to participate in the program. At least one must be a general aviation airport and no more than one large hub air carrier airport may participate. Under the pilot program, general aviation airports may be leased or sold, but an air carrier airport may only be leased. Three of the slots have been filled and seven slots remain available.
Exemption from federal requirement. The 1996 Reauthorization Act permits the FAA to exempt an airport sponsor from certain requirements. First, the public airport sponsor may receive an exemption to use the lease or sale proceeds for non-airport purposes. Generally, all proceeds from the lease or sale of airport land must be used for the capital or operating costs of the airport. This exemption requires the approval of 65 percent of the air carriers at the airport (by number of carriers and by landed weight). The FAA also can exempt a public sponsor from an obligation to repay federal grants and return property acquired with federal assistance upon the lease or sale of the airport.
Conditions for granting exemptions. The FAA approval is based upon a number of conditions listed in Title 49 United States Code § 47134. These include the private operator’s ability to assume the public operator’s grant obligations, and ensure continued access to the airport on reasonable terms. The private operator must operate the airport safely, maintain and improve the airport, charge reasonable fees, provide security, mitigate noise and environmental impacts, and any existing collective bargaining agreements covering airport employees may not be repealed. The lease agreement must provide a plan for continued operation of the airport in case of bankruptcy of the private operator.
Federal financial assistance. The private operator of an air carrier airport may receive Airport Improvement Program (AIP) grants and collect Passenger Facility Charges. Under the Program, private operators of large and medium hub airports are entitled to the same level of grant participation as public sponsors; Large and medium hub airports grants are 75 percent federal and 25 percent local; small and non-hub airports are 90 percent federal and 10 percent local. AIP discretionary grants for private operators are 70 percent federal and 30 percent local.
Federal oversight. Air carrier airports in the pilot program must comply with Title 14 Code of Federal Regulations Part 139 and with Transportation Security Administration requirements for airport security.