Legal Aspects of Airport Programs. Topic 1-08. The Law and Regulations of Airport Ownership

The majority of U.S. airports are owned and operated by government entities. A recent survey conducted by the North American Airports Council International revealed that city-owned airports is the most common U.S. ownership structure (38%) followed by regional/airport authority (25%), single county (17%) and multiple-jurisdictions at 9%. States account for 5% of the total, including BWI, ANC, and the Hawaiian airports. Unified port authorities account for another 3% -- examples include the Port of Seattle, Port of Portland, etc. The federal government holds the title to Ronald Regan Washington National and Dulles International airports, but has leased these facilities to a regional authority for operations and management. Approximately 1% of the airports surveyed were privately owned and operated. Domestic and international air-carrier passenger traffic though U.S. airports is expected to double within the next two decades. Some have asserted that traditional government funding for such a massive expansion of landside and airside facilities and services cannot meet that need. The answer, some assert, may lie in tapping the equity market through privatization as an effective means of avoiding congestion and upgrading facilities. In the wake of this interest in privatization of airports and air navigation services, such issues as liability, appropriate cost pricing, revenue allocation and investment management are becoming more important. It should be noted, however, that a number of federal government agencies have considered and rejected privatization, and many airports remain unsuited for private sector participation. Legal and economic constraints inhibit private U.S. airports. The Federal Aviation Administration (FAA) has permitted and even encouraged some privatization, such as contracting for airport management or allowing private companies to develop and lease terminals, but it has expressed concern about selling or leasing an entire airport to the private sector. (See Report # GAO/T-RCED-96-82). There is concern as to whether private airports should have access to tax-exempt borrowing and whether privatization would lead to an overall reduction in the funding level for federal airport grants. Other reports anticipate reluctance, particularly on the part of cities, that may lose economically when having to compete with local private airports. These are policy issues that are well beyond the scope of this study. Only a few studies and surveys have been found that address the privatization of U.S. airports. These are generally centered on the benefits vs. concerns of service contracts, leases, and ownership partnerships between public entities and private investors or contractors. Privatization presents numerous tort liability, environmental, labor, airline safety, and security regulatory challenges. In order to address these challenges, all players involved are in need of an informational source, much like a primer that is uncomplicated and easily assessable. There are few sources that inform owners and the aviation legal profession of the state of the law on private airport ownership in general, and these issues in particular. This project should define what airport ownership includes, identify and analyze existing privatization projects, and explain the legal problems encountered during these privatizations. The description of these transactions should include a variety of privatization types (transfers of fee simple, leases, management and operation contracts, etc.). One result of this analysis would be a compendium of anticipated legal issues for those considering or embarking on any variation of privatization and the way in which those legal issues have been resolved. All federal, state and local legislation and regulations that affect privatization should be identified. The analyses should identify and comment upon the relevant federal guidance on privatization and recent articles published on the subject. The goal is to produce a comprehensive Legal Research Digest Report with relevant precedent and legal guidance.


  • English


  • Status: Completed
  • Contract Numbers:

    Project 11-01, Topic

  • Sponsor Organizations:

    Federal Aviation Administration

    800 Independence Avenue, SW
    Washington, DC  USA  20591

    Airport Cooperative Research Program

    Transportation Research Board
    500 Fifth Street, NW
    Washington, DC    20001
  • Project Managers:

    Chisholm-Smith, Gwen

  • Performing Organizations:

    Kaplan Kirsch & Rockwell

  • Principal Investigators:

    McDaniel, James

  • Start Date: 20080201
  • Actual Completion Date: 20081201
  • Source Data: RiP Project 18104

Subject/Index Terms

Filing Info

  • Accession Number: 01462590
  • Record Type: Research project
  • Source Agency: Transportation Research Board
  • Contract Numbers: Project 11-01, Topic
  • Files: TRB, RiP, USDOT
  • Created Date: Jan 3 2013 2:06PM