Lessons from Airport Privatization, Commercialization, and Regulation in the United Kingdom

Abstract

The possible lessons of airport privatization, commercialization, and regulation in the United Kingdom (U.K.) are discussed. This is both timely and topical because of the huge financial pressures on governments to meet the infrastructure investments required to accommodate the forecasts of growth in air traffic and modernization such as new, larger aircraft. In response to these trends, the U.S. government and governments around the world have looked at the U.K. as a model of privatization. It was the first nation to privatize its airports, and a variety of ownership structures have been adopted. The history of privatization, commercialization, and regulation in the U.K. is traced, and important lessons are highlighted. Regulation may be the only policy lever available to shape a privatized and commercialized airport system and its role within a wider integrated transport strategy. The authors contend that a commercialized model of ownership similar to that at many U.K. municipal airports could be adopted in the United States, potentially relieving the financial pressure on the federal government to fund development. Countries need to have a strategic airports policy to guide development toward national, economic, and environmental goals.