Airports and State Advocacy
Deal to privatize Midway Airport goes bust
A deal to privatize Midway Airport in Chicago has fallen through because investors failed to raise the necessary money, city officials said this week.
Midway would have been the first major airport to privatize under an FAA pilot program that allows up to five public airport sponsors to sell or lease an airport. While the program began in 1997, it was met with little interest until recently, when some states saw the Midway privatization as a model for obtaining short-term injections of cash to address budget shortfalls.
Midway Investment and Development Company LLC was expected to pay $2.521 billion for a 99-year lease of the airport. Proponents had said a private operator could turn a profit and create revenue for local government, but the investors’ abandonment of the deal raises the question of how private investors would manage an airport in difficult economic times—and what effect private management would have on general aviation operations.
“Privatization of airports is often not in the best interest of general aviation pilots,” said Andy Cebula, AOPA executive vice president of government affairs. “Private investors are out to make money. If that money isn’t coming in, they could look to GA pilots and operators to shoulder the financial burden.” Higher fees and increases in operating costs could force GA pilots to move to other airports, he added.
AOPA testified about the potential negative effects of privatization this February when the Connecticut state legislature considered privatizing state-owned airports. Other states have explored the prospect of privatizing airports, but Midway was the only airport participating in the FAA privatization pilot program when the deal fell through.
April 23, 2009