Full Privatization of U.S. Airports: Potential Issues and Options for Congress
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Full Privatization of U.S. Airports: Potential
Issues and Options for Congress
July 22, 2026
Congressional Research Service
https://crsreports.congress.gov
R49041
SUMMARY
Full Privatization of U.S. Airports: Potential
Issues and Options for Congress
In 1996, Congress established the Airport Privatization Pilot Program (Federal Aviation
Reauthorization Act of 1996; P.L. 104-264, §149). The program was established to increase
access to sources of private capital for airport development and make airports more efficient,
competitive, and financially viable.
R49041
July 22, 2026
Rachel Y. Tang
Analyst in Transportation
and Industry
The FAA Modernization and Reform Act of 2012 (P.L. 112-95) increased the number of airports
that may participate in the 1996 program from 5 to 10. The FAA Reauthorization Act of 2018 (P.L. 115-254) renamed the
program the Airport Investment Partnership Program (AIPP; 49 U.S.C. §47134) and removed the restriction on the number
and type of public airports that may participate in the program. Participation in the AIPP has been limited, in large part
because major stakeholders have different, if not contradictory, objectives and interests.
As of June 2026, three U.S. airports—two commercial service airports and a general aviation airport—have completed the
privatization process established under the AIPP. Two of those airports, Stewart International Airport in New York and Avon
Park Executive Airport in Florida, subsequently reverted to public ownership. Luis Muñoz Marín International Airport in San
Juan, PR, is now the only airport with a private operator under the provisions of the AIPP. Another AIPP participant, Hendry
County Airglades Airport—a noncommercial general aviation airport in Clewiston, FL—has not completed its privatization
process after receiving FAA approval in September 2019.
Some Members of Congress have expressed interest in airport privatization as a way to save money by making airports less
dependent on federal assistance while increasing the nation’s aviation capacity to meet growing demand for air travel in the
long run by enlisting private sector financing and expertise in building and operating airports. Under current federal law and
regulations, some argue the AIPP has struggled to achieve these goals.
Congress could terminate the AIPP, introduce new measures to reform the existing program, or establish a new program. If
Congress were to have interest in encouraging full airport privatization, it might consider several policy options, including
•
making privatization more attractive to public sector owners by facilitating the use of privatization revenue
for non-airport purposes;
•
providing similar tax treatment to bonds issued by public sector and private sector airport operators, as
public sector operators have access to less costly, longer-term finance than private operators;
•
easing requirements for private owners to comply with assurances previously made by public sector owners
to obtain federal Airport Improvement Program grants; and
•
accelerating the application and approval procedures for the AIPP.
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Full Privatization of U.S. Airports: Potential Issues and Options for Congress
Contents
Introduction ..................................................................................................................................... 1
Overview of Airport Privatization ................................................................................................... 2
Selected Stakeholders................................................................................................................ 3
The Airport Investment Partnership Program .................................................................................. 4
Participation in the AIPP ........................................................................................................... 6
Selected Case Studies ................................................................................................................ 8
New York Stewart International Airport ............................................................................. 8
Chicago Midway Airport .................................................................................................... 9
Luis Muñoz Marín International Airport ............................................................................ 9
Hendry County Airglades Airport ....................................................................................... 9
Avon Park Executive Airport ............................................................................................ 10
AIPP Privatization Challenges ...................................................................................................... 10
AIPP Application Process ....................................................................................................... 10
Regulatory Conditions and Obligations ...................................................................................11
Adequate Access to Funding ....................................................................................................11
Airport Privatization in Europe and Canada.................................................................................. 12
Europe ..................................................................................................................................... 13
Canada ..................................................................................................................................... 14
Potential Issues and Options for Congress .................................................................................... 15
Figures
Figure 1. Levels of Airport Privatization ......................................................................................... 2
Tables
Table 1. Comparison of Full Airport Privatization Under and Outside the AIPP ............................ 6
Table 2. Participation in the AIPP ................................................................................................... 7
Appendixes
Appendix. Airport Definitions ....................................................................................................... 18
Contacts
Author Information........................................................................................................................ 19
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Full Privatization of U.S. Airports: Potential Issues and Options for Congress
Introduction
Almost all commercial service airports in the United States are owned by local and state
governments or by public entities such as airport authorities or multipurpose port authorities.
These airports are included in a biannual Federal Aviation Administration (FAA) publication, the
National Plan of Integrated Airport Systems (NPIAS), and are eligible to receive federal Airport
Improvement Program (AIP) grants (see Appendix for a list of airport definitions).1
Most of these commercial airports also have some form of private sector involvement—from
service or management contracts (partial privatization) to full privatization. Full privatization is
defined by FAA as the transfer of airport operations to a private sector operator through a formal
transfer of federal grant obligations and the issuance of a Part 139 airport operating certificate to
the new operator.2
In 1996, Congress established the Airport Privatization Pilot Program,3 which was renamed the
Airport Investment Partnership Program (AIPP) in the FAA Reauthorization Act of 2018 (P.L.
115-254). The program was to explore the prospect of fully privatizing publicly owned airports to
improve and develop them using private capital. Privatization has been promoted as a way to
reduce demand for government funds for these activities and to make airports more efficient and
financially viable.
Participation in the AIPP has been limited. Since 1996, three airports have completed the
privatization process; one of them, as explained below in the selected case studies, later reverted
to public ownership. Other airport owners reportedly considered privatization but chose not to
proceed. The lack of interest in privatization among U.S. airports, including the relatively
profitable large or medium hub airports, could be the result of (1) readily available financing
sources for publicly owned airports; (2) perceived lack of incentives to privatize; (3) potential
implications for major stakeholders; and (4) satisfaction with the status quo.
President Donald J. Trump signed Executive Order 14344, “Making Federal Architecture
Beautiful Again,” on August 28, 2025. In December 2025, the Department of Transportation
(DOT) issued a request for information (RFI) soliciting design, construction, and financing
proposals, including public-private partnership (PPP) proposals, for replacing or improving the
main terminal and satellite concourses at federally owned Washington Dulles International
Airport (IAD) in Virginia.4 Although the RFI was described as an information-gathering
1 A commercial service airport, as defined in 49 U.S.C. §47102(7), is a publicly owned airport that receives scheduled
passenger service and boards at least 2,500 passengers per year. There are 502 commercial service airports listed in the
2025-2029 National Plan of Integrated Airport Systems (NPIAS) published in September 2024. NPIAS airports are
eligible to receive federal Airport Improvement Program (AIP) funding. Two commercial airports in metropolitan
Washington, Reagan National (DCA) and Dulles International (IAD), are federally owned.
2 U.S. airports serving passenger-carrying operations must be inspected and certificated by the Federal Aviation
Administration (FAA) under 14 C.F.R. Part 139 if scheduled operations are conducted on aircraft with more than 9
passenger seats or unscheduled operations on aircraft with at least 31 passenger seats. FAA issues Part 139 certificates
to airports that comply with safety and emergency response requirements specified in Part 139. See 14 C.F.R. Part 139
for more information.
3 49 U.S.C. §47134; §149 of the Federal Aviation Reauthorization Act of 1996 (P.L. 104-264).
4 The two federally owned airports, IAD and DCA, were transferred to Metropolitan Washington Airports Authority
(MWAA) under a long-term lease authorized by the Metropolitan Washington Airports Act of 1986 (P.L. 99-500).
MWAA is an independent public agency governed by a 17-member board of directors appointed by the governors of
Virginia and Maryland, the mayor of Washington, DC, and the President. For more information, visit MWAA’s
website at https://www.mwaa.com/about-airports-authority.
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Full Privatization of U.S. Airports: Potential Issues and Options for Congress
initiative,5 it appeared to reaffirm federal interest in private sector involvement in airport
infrastructure development and therefore may renew discussion of airport privatization in
Congress.
Overview of Airport Privatization
Privatization refers to the shifting of governmental functions, responsibilities, and sometimes
ownership, in whole or in part, to the private sector. With respect to airports, privatization, such as
a public-private partnership (PPP), can take many forms, including the formal transfer of an entire
airport to private operation and/or ownership (see Figure 1). In the United States, most cases of
airport privatization fall into the category of partial, not full, privatization.
Figure 1. Levels of Airport Privatization
Source: CRS based on Transportation Research Board, Airport Cooperative Research Program, Considering and
Evaluating Airport Privatization, Report no. 66, 2012, p. 3.
Figure 1 illustrates four generic privatization models:
•
•
Service contracts. Many U.S. airports outsource some ancillary operations to
private firms that specialize in those functions. Examples of these specific and
usually stand-alone operations that are frequently outsourced include cleaning
and janitorial services, airport landscaping, and shuttle bus operations. Service
contracts are the most common type of privatization among U.S. airports.
Management contracts. Some airports engage the private sector’s management
expertise by contracting out airport facilities or responsibilities, such as parking,
terminal concessions, terminal operations, airfield signage, fuel farms, and
aircraft refueling. In a few cases, a private management company has been
awarded a comprehensive contract to manage an entire airport. The operating
company often acts as an extension of the airport owner, with operational control
over budgeting, staffing, and regulatory compliance. This is a form of partial
privatization. For example, Virginia-based Avports, a specialized aviation
facilities company, has management services contracts with numerous airports,
5 The request for information (RFI) received over 30 responses by the final deadline of January 20, 2026. The
Department of Transportation (DOT) stated that the RFI was consistent with Executive Order 14344, “Making Federal
Architecture Beautiful Again,” signed by President Trump on August 28, 2025. DOT indicated that it “intends to
provide all submissions received under this RFI to the Metropolitan Washington Airport Authority (MWAA), which
operates the airport under a long-term lease, for MWAA’s consideration and potential sponsorship.” For more
information, see Docket DOT-OST-2025-1887 at https://www.regulations.gov/document/DOT-OST-2025-1887-0001.
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•
•
including Albany International Airport (ALB) and Westchester County Airport
(HPN) in New York and Teterboro Airport (TEB) in New Jersey.6
Developer financing/operation. A wide range of contracts have been used in
PPPs to involve the private sector in providing financing, development,
operation, and maintenance services, known as the Design-Build-FinanceOperate-Maintain (DBFOM) model. Airport DBFOM examples include
passenger terminals (notably Terminal 5 at Chicago O’Hare International Airport
[ORD] and Terminal 4 at New York John F. Kennedy International Airport
[JFK]), parking garages, and rental car facilities.7 In 2022, New York LaGuardia
Airport (LGA) opened its new Terminal B, which was developed by LaGuardia
Gateway Partners, a consortium selected by the Port Authority of New York and
New Jersey to design, build, operate, and maintain the new terminal. In June
2022, Ferrovial Airports was appointed to design, build, and operate the New
Terminal One at JFK, which would replace Terminals 1 and 2 and the former
Terminal 3 at JFK upon full completion around 2030.8
Long-term lease or sale. Full privatization involves the sale or long-term lease
of an airport to a private owner or operator. Under a long-term lease or
concession agreement, the airport owner grants full management and
development control to the private operator in exchange for capital improvements
and other obligations, such as an up-front payment and/or profit-sharing
arrangements. Two U.S. airports (i.e., Stewart International Airport in New York
and Luis Muñoz Marín International Airport in San Juan, PR) have successfully
entered into long-term leases under the AIPP. Under a full sale, ownership and
full responsibility for operation, capital improvements, and maintenance would
be transferred to a private buyer. Several airports in Europe have been privatized
in this way, but there have been no full sales of commercial service airports in the
United States.
The following discussion refers to full privatization, unless otherwise stated.
Selected Stakeholders
Full airport privatization in the United States generally involves four major stakeholders: (1)
airport owners, which in the United States are mostly local or regional governments or public
entities; (2) air carriers; (3) private investors; and (4) the federal government. These stakeholders
ultimately decide whether a privatization deal goes forward. They tend to have different
objectives and, in many cases, divergent interests. Some commonly reported concerns of each of
these stakeholders’ interests are discussed below.
Airport owners, which are usually local governments, might opt for privatization if they can
extract money for general (unrelated to the airport) use. Federal regulations generally require that
lease or sale revenue from airport privatization be used for airport purposes only (unless the
majority of airlines serving the airport agree otherwise, under the AIPP). Furthermore,
privatization involves surrendering control of an economically important facility. The reduction
6 See Avports website at https://avports.com/ for a list of Avports projects, as viewed in May 2026.
7 Transportation Research Board (TRB), Airport Cooperative Research Program (ACRP), Considering and Evaluating
Airport Privatization, Report no. 66, 2012, p. 4.
8 For more information, see Port Authority Builds, “The Award-Winning Terminal B,”
https://www.portauthoritybuilds.com/redevelopment/us/en/lga/projects/terminal-b.html; and “Transforming JFK into a
World-Class Global Gateway,” https://www.portauthoritybuilds.com/redevelopment/us/en/jfk.html.
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or elimination of the public owner’s responsibilities or authority may lead to the loss of public
sector jobs. Therefore, a public sector owner may not see benefits from selling or leasing an
airport to a private operator unless the facility is losing money—in that case, private investors
might not find the airport an attractive investment. The AIPP is meant to encourage privatization
by granting certain exemptions to public sector owners regarding revenue diversion and other
obligations known as AIP “grant assurances.”9
Air carriers, including scheduled passenger airlines and cargo airlines, generally aim to keep
their costs low. They also may want to have some control over how airport revenues are used,
especially to ensure that the fees paid by themselves and by their customers are used for airportrelated purposes. Their interest in low landing fees and low rents for ticket counters and other
facilities may be contrary to a private operator’s potential interest in increasing revenue. At the
same time, air carriers have an interest in ensuring that the airports they use are well maintained
and carefully managed. They might have reason to support privatization if it could result in lower
charges, better airport services, and/or increased efforts to promote use of the airport.
Private investors and operators expect a financial return on their investments. They tend to
look at growth potential, such as opportunities to bring additional passenger flights to the airport,
to earn additional lease revenue by improving amenity offerings (e.g., shopping and dining
options for passengers), or to draw more freight traffic by offering lower fees or improved
facilities. If private entities attempt to increase profitability by raising landing fees or rents, this
may conflict with the interests of air carriers using the airport.
The federal government, specifically FAA and generally DOT, has been directed by Congress to
engage private capital in aviation infrastructure development and to reduce reliance on federal
grants and subsidies.10 FAA also has statutory mandates to maintain the safety and integrity of the
national air transportation system and to enforce compliance with commitments, known as grant
assurances, that airports have made to obtain AIP grants. Thus, while FAA administers the AIPP,
it is likely to scrutinize privatization proposals that might risk runway closures or partial or
complete airport closures, actions that could otherwise reduce aviation system capacity, or
provisions that appear to favor certain airport users over others.
In addition, airline passengers may experience potential consequences of privatization (e.g.,
changes in airport concession offerings, prices and fees, and operational efficiency), as passenger
interests are usually not represented formally in the privatization process.
One of the purposes of the AIPP is to strike a balance among stakeholders’ divergent interests
while facilitating full privatization.
The Airport Investment Partnership Program
Under the AIPP, the Secretary of Transportation and, through delegation, the FAA Administrator,
may exempt participating airports from certain federal requirements. Specifically, the
administrator may exempt the airports from all or some of the requirements to use airport revenue
9 Airports receiving AIP grants must comply with federal requirements, known as “grant assurances,” with respect to
the use, operation, and maintenance of the airport. Examples of such assurances include making the airport available
for public use on reasonable conditions and without unjust economic discrimination (against all types, kinds, and
classes of aeronautical activities); charging air carriers making similar use of the airport substantially comparable
amounts; and expending airport revenue only on capital or operating costs at the airport (no revenue diversion). For a
complete list, see FAA, “Grant Assurances (Obligations),” updated April 28, 2025, https://www.faa.gov/airports/aip/
grant_assurances.
10 P.L. 104-264, §149.
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for airport-related purposes only, to repay federal grants, or to return airport property acquired
with federal assistance on the lease or sale of the airport deeded by the federal government.11
Section 160 of the FAA Reauthorization Act of 2018 specified that if an exemption from the
requirement to use airport revenues only for airport purposes is granted to an airport sponsor, the
obligation to repay federal grants must also be waived.12 The provision also stipulates that if such
waiver is granted, FAA must grant an exemption to the private purchaser or lessee to allow the
purchaser or lessee to earn compensation from operation of the airport.13 This provided more
certainty to airports that they would be eligible for other exemptions if they were permitted to use
airport revenues for non-airport purposes. This could make privatization more attractive to private
investment, as investors would not need to face these obligations and restrictions.
Originally, the Federal Aviation Reauthorization Act of 1996 limited participation in the Airport
Privatization Pilot Program to no more than five airports. The FAA Reauthorization Act of 2018
renamed the program and made it permanent. The law removed the restriction on the number and
type of public airports that may participate in the program, though the condition stands that a
commercial airport may only be leased to private operators, not sold. The 2018 law permitted
public sponsors and private operators to jointly manage an airport. It also allowed a public
sponsor to privatize multiple airports under its control if they are located in the same state.
The FAA Reauthorization Act of 2024 (P.L. 118-63) included a provision that could help expedite
the review process in certain cases when a benefit-cost analysis is required as part of an AIPP
application.14
There are no requirements, however, that airports must be privatized under the AIPP. Airports
may be privatized outside the AIPP, though CRS is not aware of privatization cases outside the
federal program. Table 1 provides a comparison of the requirements and regulations governing
airport privatization under and outside the AIPP.
11 49 U.S.C. §§47134(b)(1) and (2). Airports may obtain exemptions under the Airport Investment Partnership Program
(AIPP) by applying to FAA and securing statutory approvals from air carriers. For any primary airport participating in
the AIPP, the use of sale or lease proceeds for non-airport-related purposes requires approval by 65% of the scheduled
air carriers serving the airport and by the scheduled and unscheduled air carriers representing 65% of the total landed
weight of all aircraft serving the airport in the preceding calendar year. For more information about the AIPP, see FAA,
“Airport Investment Partnership Program, formerly Airport Privatization Pilot Program,” updated February 4, 2026,
http://www.faa.gov/airports/airport_compliance/privatization/. See the Appendix for a definition of primary airports.
12 49 U.S.C. §47134(b)(2).
13 49 U.S.C. §47134(b)(3). For more information, see FAA, “Airport Investment Partnership
Program (AIPP) – Formerly Airport Privatization Pilot Program,” fact sheet, March 11, 2022,
https://www.faa.gov/newsroom/airport-investment-partnership-program-aipp-formerly-airportprivatization-pilot-program-0?newsId=24114.
14 49 U.S.C. §47134(b)(4) directs the Secretary of Transportation to issue a preliminary and conditional finding within
60 days of receiving a benefit-cost analysis.
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Table 1. Comparison of Full Airport Privatization Under and Outside the AIPP
Privatization Under AIPP
Privatization Outside AIPP
Eligible airports
No restrictions on number or type of
airports. Commercial airports may only
be leased; general aviation airports may
be leased or sold.
No restrictions on number or type of
airports.
Use of sale/lease
proceeds
Airports can request DOT approval to
use sale/lease proceeds for non-airport
purposes. For commercial service
airports, this requires consent of 65% of
airlines. For general aviation airports, this
requires consultation with owners of
aircraft based at the airport.
Sale/lease proceeds are considered
airport revenue and must be used for
airport purposes.
Grant repayment
DOT may grant exemptions from
existing repayment obligations. Airports
must abide by other grant assurance
obligations.
DOT cannot grant exemptions from
grant assurance obligations or existing
repayment obligations.
AIP formula grants
Private operators are eligible for grants
from AIP formula funds at a lower federal
share than public operators.
Private operators may be eligible for
grants from AIP formula funds under
certain conditions, such as when a
privately owned airport is used for public
purposes as a reliever or provides at
least 2,500 passenger boardings a year.
Rates or charges on
airlines
Rates on airlines may not rise faster than
the inflation rate without consent of 65%
of airlines. Rate increases for general
aviation aircraft owners may not exceed
percentage rate increase for airlines.
Rates and charges must be reasonable
and not unjustly discriminatory, pursuant
to grant assurances.
Charges on passengers
Private operators are authorized to
impose, collect, and use revenue from
passenger facility charges (PFCs).
Private operators are authorized to
impose charges on passengers (subject to
reasonableness and nondiscrimination
requirements of the grant assurances)
but not to impose, collect, or use PFCs.
Source: Compiled by CRS using information from the Federal Aviation Administration (FAA).
Notes: AIPP = Airport Investment Partnership Program; DOT = Department of Transportation. The Airport
Improvement Program (AIP) provides federal grants to support airport development and planning. AIP structure
and authorizations are set in FAA authorization acts. Authorized by the federal government, PFCs are state,
local, or port authority fees imposed on each paying passenger boarding an aircraft at an airport.
Participation in the AIPP
To begin the AIPP application process, an airport files a preliminary application for FAA
approval. The application must include a summary of privatization objectives, a description of the
process and a timetable, current financial statements, and a copy of the airport owner’s request for
potential private operators to submit proposals. FAA has 30 days to review the preliminary
application.
Once an airport receives preliminary approval, it may select a private operator from among those
offering proposals, negotiate an agreement, and submit a final application to FAA. There is no
timeline as to how quickly FAA must complete its review of the final application. After FAA
gives notice of its proposed approval of the final application and lease agreement in the Federal
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Register, a 60-day public review and comment period begins. After that, FAA completes its
review and prepares its findings and Record of Decision (ROD), in which it is to address any
public comments and publish details of its decision.15
The AIPP has had limited success in increasing the number of privately run airports. Since its
inception, 13 airports have applied to enter the program, and 3 have completed the entire
privatization process. Two of these later reverted to public ownership. Table 2 lists the AIPP
applicants (in alphabetical order) and their status.
Table 2. Participation in the AIPP
as of June 2026
Status
Airport
Location
Application Results
Inactive
Avon Park Executive Airport
Avon Park, FL
Privatized in 2024 after Federal Aviation
Administration (FAA) approval; private
operator’s lease terminated by the City
of Avon Park on December 8, 2025
Inactive
Brown Field Municipal Airport
San Diego, CA
Application withdrawn in 2001
Inactive
Chicago Midway International
Airport
Chicago, IL
Revised preliminary application
withdrawn in 2013
Inactive
Gwinnett County Briscoe Field
Airport
Lawrenceville, GA
Preliminary application withdrawn in
2012
Active
Hendry County Airglades
Airport
Clewiston, FL
Preliminary application approved in 2010;
final application approved by FAA in 2019
Inactive
Louis Armstrong New Orleans
International Airport
New Orleans, LA
Preliminary application withdrawn in
2010
Privatized
Luis Muñoz Marín
International Airport
San Juan, Puerto
Rico
Preliminary application approved in
December 2009; final application for
privatization under long-term lease
approved in February 2013
Inactive
New Orleans Lakefront
Airport
New Orleans, LA
Application terminated in 2008
Inactive
Niagara Falls International
Airport
Niagara Falls, NY
Application withdrawn in 2001
Inactive
Rafael Hernandez Airport
Aguadilla, Puerto
Rico
Application withdrawn in 2001
Inactive
St. Louis Lambert International
Airport
St. Louis, MO
Preliminary application withdrawn in
2020
Inactive
Stewart International Airport
Newburgh, NY
Privatized in 2000 after FAA approval;
reverted to public operation in 2007
Inactive
Westchester County Airport
White Plains, NY
Preliminary application accepted in 2018;
application removed in 2019 after
extended window for submitting final
application expired
Source: Compiled by CRS using FAA, “Airport Investment Partnership Program, formerly Airport Privatization
Pilot Program,” updated February 4, 2026, https://www.faa.gov/airports/airport_compliance/privatization.
15 For more information about the AIPP application process, see FAA, “Airport Investment Partnership Program
(AIPP) – Formerly Airport Privatization Pilot Program.”
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Selected Case Studies
CRS examined five AIPP applicants (three commercial airports and two general aviation airports)
and their reported experiences and challenges of privatizing airports under the program.
New York Stewart International Airport
In 2000, New York Stewart International Airport (Stewart, or SWF) in Newburgh, NY, became
the first commercial service airport privatized under the Airport Privatization Pilot Program.
National Express Group PLC, a United Kingdom (UK)-based transportation company,16 made a
$35 million up-front payment to the owner, the State of New York, for a 99-year lease and agreed
to pay the state 5% of the airport’s gross income on the lease’s 10th anniversary or after 1.38
million passengers used the airport, whichever occurred first. National Express made $10 million
in capital contributions during its operation of the airport.17 Unable to obtain airline approvals to
use airport revenue for general purposes, the State of New York agreed to use the lease payments
for airport purposes and to recoup past subsidies for Stewart and other state-owned airports in
accordance with FAA’s revenue use policy.18
According to FAA data, National Express registered 274,126 enplanements in 2000, the year it
assumed management, and 156,638 six years later.19 The company’s attempt to make the airport
more attractive to passengers going to and from New York City by renaming it “New YorkHudson Valley International Airport” was abandoned amid local opposition.20
In 2006, National Express decided to focus its U.S. efforts on school bus operations and moved to
dispose of its lease on Stewart.21 The following year, the Port Authority of New York and New
Jersey purchased the remaining term of the lease for $78.5 million. Although National Express
never disclosed the profitability of its operation at Stewart, the Port Authority reported a $0.8
million loss in 2007, when it ran the airport for part of the year, and a $5.5 million loss in 2008,
its first full year of operation.22 This suggests that the operation may not have been profitable for
National Express. However, National Express booked a profit of £16.2 million (approximately
$33 million in 2007) on the sale of the lease to the Port Authority, which suggests that it earned a
significant return on its investment.23
16
National Express Group PLC changed its name to Mobico Group PLC in 2023 (see Mobico Group, “Change of
Name,” June 20, 2023, https://www.mobicogroup.com/media/news-releases/2023/change-of-name-1/).
17 TRB, ACRP, Considering and Evaluating Airport Privatization, pp. 43-44, 86-87; and FAA, Report to Congress on
the Status of the Airport Privatization Pilot Program United States Code, Title 49, Section 47134, August 2004, p. 7.
18 New York Department of Transportation (NYDOT), “Governor Pataki Hands Stewart Airport Keys to National
Express (Orange County),” press release, March 31, 2000.
19 Enplanements at Stewart International Airport fluctuated between 2000 and 2006; see NYDOT, “New York State
Enplanements by Airport/Years 1997-2008,” https://www.dot.ny.gov/divisions/operating/opdm/aviation/repository/
Yearly%20Enplanements%201998-2008%20Web.pdf.
20 Ulster County New York, “Resolution No. 143: Opposing the Name Change of Stewart International Airport,” April
11, 2006, https://legislature.ulstercountyny.gov/sites/default/files/documents/143-06.pdf.
21 National Express Group, Annual Report & Accounts 2006, pp. 16-20, https://www.annualreports.com/HostedData/
AnnualReportArchive/n/LSE_NEX_2006.pdf.
22 Port Authority of New York and New Jersey, Annual Report 2007, p. 94; and Annual Report 2008, p. 90,
https://www.panynj.gov/corporate/en/financial-information/annual-report.html.
23 National Express Group, Annual Report and Accounts 2007, p. 66.
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Chicago Midway Airport
In the case of Chicago Midway International Airport (Midway, or MDW), the City of Chicago
received airline approval to lease the city-owned airport to private investors. On October 3, 2006,
FAA authorized the city to select a private operator, negotiate an agreement, and submit a final
application under the pilot program.24 On October 8, 2008, the Chicago City Council agreed to a
$2.52 billion, 99-year lease with Midway Investment and Development Corporation (MIDCo), a
consortium led by Citigroup, Inc., John Hancock Life Insurance Co., and a unit of Vancouver
(British Columbia) International Airport. The deal was delayed because of the consortium’s
inability to secure financing in the credit market during the global economic crisis of 2008. The
lease agreement was terminated when the group missed the April 6, 2009, payment deadline.
MIDCo subsequently paid a $126 million penalty to the city.25
A renewed effort to lease Midway was abandoned in 2013 after one of the two bidding groups
dropped out. The city then announced that it would suspend plans to lease the airport. On
September 9, 2013, the City of Chicago withdrew its preliminary privatization application.
Luis Muñoz Marín International Airport
Luis Muñoz Marín International Airport (Muñoz Marín, or SJU), a medium hub airport in San
Juan, PR, is the only commercial service airport operating under private management after
privatization under the Airport Privatization Pilot Program, now the AIPP. FAA approved the final
privatization contract in February 2013, and the airport was transferred to a private operator,
Aerostar Airport Holdings (Aerostar), on February 25, 2013.
Aerostar paid $615 million in up-front proceeds to the Puerto Rico Ports Authority.26 The
company is to pay a further estimated $550 million over the 40-year lease, which includes an
annual lease payment of $2.5 million for the first 5 years of the contract, 5% of gross airport
revenues in the following 25 years, and 10% of gross airport revenues during the final 10 years of
the lease.27
Aerostar also agreed to a $1.2 billion capital plan, including the remodeling and renovation of the
terminal buildings. Aerostar reported that by the end of 2025, it had invested nearly $380 million
in construction and rehabilitation, as well as in facilities and operational equipment.28
Hendry County Airglades Airport
Hendry County Airglades Airport (Airglades, or SI2) in Clewiston, FL, a public-use general
aviation airport,29 received preliminary approval from FAA for privatization under the Airport
24 See FAA, “Fact Sheet: Chicago Midway Airport Pilot Privatization Program,” FAA News, April 2008. Also see FAA
Docket: 2013-0011 at https://www.regulations.gov/docket/FAA-2013-0011.
25 TRB, ACRP, Considering and Evaluating Airport Privatization, p. 44.
26 Aerostar Airport Holdings, LLC, is jointly owned by Aeropuerto de Cancún S.A. de C.V. and Highstar Capital.
Aeropuerto de Cancún S.A. de C.V. is a subsidiary of Grupo Aeroportuario del Sureste S.A.B. de C.V. of Mexico. It
operates the Cancún Airport. For more information on the lease, see FAA, Record of Decision for the Participation of
Luis Muñoz Marín International Airport, San Juan, Puerto Rico, in the Airport Privatization Pilot Program, FAA
Docket 2009-1144, February 25, 2013.
27 Email exchange between CRS and FAA in 2016.
28 Luis Muñoz Marín International Airport privatization status report (July 10, 2026) that FAA shared with CRS.
29 General aviation airports do not receive scheduled commercial or military service and typically support business,
personal, and instructional flying; agricultural spraying; air ambulances; on-demand air-taxis; and/or charter aircraft
service.
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Privatization Pilot Program in October 2010. The airport submitted a final application in August
2019 and received FAA’s approval in a September 2019 ROD.30 The airport has subsequently
requested multiple extensions and is working to meet the conditions and requirements in the 2019
ROD, including securing investors and reaching financial closure.31
Avon Park Executive Airport
Avon Park Executive Airport (Avon, or AVO), a general aviation airport in Florida, filed a final
AIPP application in July 2023. The application proposed a long-term lease of the airport to
Florida Airport Management (FAM), a private operator, to operate the airport as a public-use
general aviation facility. The airport received approval on October 29, 2024, when FAA signed
the ROD permitting its participation in the AIPP.32
In December 2025, the City of Avon Park terminated the privatization lease with FAM, reportedly
over a dispute involving alleged financial mismanagement and contract breaches.33 The city is
reportedly managing the airport in-house.34 It is not clear if the city has notified or involved FAA
with respect to AVOs current status in the AIPP.
AIPP Privatization Challenges
In its 30-year history, the AIPP and its predecessor pilot program have not been successful in
stimulating wide interest in airport privatization. The program’s modest results appear to have
several causes.
AIPP Application Process
The process of applying to privatize an airport, FAA stated in 2004, makes the transfer from
public to private ownership “time consuming” and presents risks that could cause a potential deal
to fail.35 From a federal perspective, the oversight and procedural framework described by FAA
are put in place to ensure thorough evaluation of each application and compliance with federal
aviation policy.
The process may take years to complete. In the case of Muñoz Marín, more than three years
elapsed from the preliminary application submission to FAA’s final approval, and informal
discussions with FAA may have consumed additional time prior to the filing of the preliminary
application. In the case of Airglades, approximately nine years elapsed between the preliminary
and final approvals, and the airport appears to have difficulty finalizing financial arrangements.
30 FAA Docket 2010-1052. Also see FAA, “Airport Investment Partnership Program (AIPP) – Formerly Airport
Privatization Pilot Program.”
31 Based on emails between CRS and FAA, May-July 2026.
32 FAA Docket 2023-1724.
33 Romona Washington, “Avon Park works toward taking over airport operations,” Highlands News-Sun, December 5,
2025, https://www.midfloridanewspapers.com/highlands_news-sun/news/avon-park-works-toward-taking-over-airportoperations/article_77960bc3-ba83-4574-9a0d-0799cd28ecf6.html.
34 Diego De Jesus, “Avon Park Airport to be city managed,” Highlands News-Sun, January 2, 2026,
https://www.midfloridanewspapers.com/highlands_news-sun/news/avon-park-airport-to-be-city-managed/
article_1f187d09-999c-4029-8daa-4ab23d3707e8.html.
35 FAA, Report to Congress on the Status of the Airport Privatization Pilot Program United States Code, Title 49,
Section 47134, p. 1; and Matthew Hummer, “Airport Privatization: A Plan to Help Fill a $50 Billion-Plus Investment
Gap,” Bloomberg Government, December 20, 2011, p. 13.
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The length of the application process tends to introduce uncertainties. For example, within the
application time frame, new local officials may be elected who might disagree with their
predecessors’ decision to privatize the local airport. For example, in 2019, Westchester County
leadership decided to withdraw its airport privatization application, which had been championed
by the previous county administration several years earlier.36
Regulatory Conditions and Obligations
Privatization under the AIPP involves numerous regulatory requirements, some of which have
been criticized as overly restrictive. These requirements tend to consider and balance multiple
stakeholders’ interests but may lessen airport owners’ and/or investors’ interest in privatization.
The requirements include, in the case of a commercial airport, that 65% of air carriers serving the
airport approve the lease or sale of the airport,37 restrictions on increases in airport rates and
charges that exceed the rate of increase of the Consumer Price Index, and the private operator’s
compliance with grant assurances made by the previous public sector operator to obtain AIP
grants.38 After privatization, the airport is eligible for AIP formula grants to cover 70% of the cost
of improvements versus the 75%-90% federal share for AIP projects at publicly owned airports.
This may serve as a disincentive to privatize because an airport would receive less federal money
after privatization.
Adequate Access to Funding
Publicly owned airports have access to five major sources of funding: federal grants, passenger
fees, bonds, various types of charges, and state and local grants. The AIP provides federal grants
to airports for planning and development of mainly capital projects relating to aircraft operations,
such as runways and taxiways.39 Local passenger facility charges of up to $4.50 per boarding
passenger, imposed pursuant to federal law, can generate revenue for a broad range of projects,
including “landside” projects on airport property (e.g., passenger terminals and ground access
improvements), and for interest payments. Tax-exempt bonds, often secured by airport revenue,
offer less costly financing than is generally available to private entities. Tenant leases, landing
fees, and other charges provide revenue sources at some airports. Many airports, especially
smaller ones, also benefit from state and local grants.40
Amid the COVID-19 pandemic, billions of dollars in federal emergency funding were distributed
to eligible airports.41 The Infrastructure Investment and Jobs Act (P.L. 117-58) provided airports
36 FAA Docket 2016-9477.
37 Approval must be granted by 65% of the air carriers using the airport and by carriers collectively accounting for 65%
of the landed weight during the previous year.
38 Examples of grant assurances include making the airport available for public use on reasonable conditions and
without unjust economic discrimination (against all types, kinds, and classes of aeronautical activities); charging air
carriers making similar use of the airport substantially comparable amounts; maintaining a current airport layout plan;
making financial reports to FAA; and expending airport revenue only on capital or operating costs at the airport. For a
listing of the AIP grant assurances, see FAA, “Grant Assurances (Obligations).”
39 For more discussion of the AIP and airport financing, see CRS Report R43327, Financing Airport Improvements, by
Rachel Y. Tang.
40 Government Accountability Office (GAO), Airport Finance: Observations on Planned Airport Development Costs
and Funding Levels and the Administration’s Proposed Changes in the Airport Improvement Program, GAO-07-885,
2007, p. 8.
41 The Coronavirus Aid, Relief, and Economic Security Act (H.R. 748, P.L. 116-136), signed into law on March 27,
2020, included $10 billion in emergency supplement funds to be awarded as economic relief to eligible U.S. airports
(continued...)
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with $25 billion between FY2022 and FY2026, in addition to annual AIP funding.42 Airports
receiving federal funding may have little motivation to seek private investment.
In addition, how an airport undergoes its privatization process has implications for its funding and
financing options.
•
•
If a publicly owned airport were to be privatized outside the AIPP, its private
operator may not be eligible to receive AIP formula funds and may have to draw
on its own resources to improve runways and taxiways. The operator would not
be entitled to issue bonds with federal tax-exempt status and would therefore
have to pay higher interest rates on its bonds than a public sector operator. The
private operator would also have relative freedom to impose passenger usage fees
and to increase landing fees, rents, and other charges, so long as this is not done
in a discriminatory fashion.
An airport privatized under the AIPP would have access to federal AIP grants,
although the private operator would have to provide a 30% match, which is more
than the 10%-25% match required of publicly owned airports. The operator
would not be entitled to issue bonds with federal tax-exempt status and would
therefore have to pay higher interest rates on its bonds than a public sector
operator. It could collect passenger facility charges but could not impose charges
higher than those authorized by federal law. Its ability to raise fees paid by air
carriers would be constrained.
These factors, largely the consequence of federal laws, may offer insight into why airport
privatization has been less attractive in the United States than in other places, such as Europe and
Canada.
Airport Privatization in Europe and Canada
Several European countries and Canada have undertaken steps in airport privatization. At least
two factors that have facilitated privatization in other countries do not exist in the United States.
One factor is that many of the privatized major airports in Europe and Canada were previously
owned by national governments, not by local or provincial governments, so the decision to
privatize did not need to be deliberated at multiple levels of government. Another factor is that
there is no analogous tax-favored status of debt issued by state and local governments in most
other countries as there is in the United States, so the shift from public to private ownership does
not necessarily entail higher borrowing costs in Europe and Canada.
affected by the COVID-19 pandemic. The Coronavirus Response and Relief Supplemental Appropriations Act (P.L.
116-260), signed into law on December 27, 2020, included nearly $2 billion in supplemental funds to these airports as
economic relief. The American Rescue Plan Act of 2021 (H.R. 1319, P.L. 117-2), signed into law on March 11, 2021,
provided another $8 billion in economic relief funds to eligible airports. For details, see FAA, “2020 CARES Act
Grants,” updated March 30, 2023; and FAA, “Airport Coronavirus Response Grant Program,” updated September 2,
2025, https://www.faa.gov/airports/cares_act/ and https://www.faa.gov/airports/crrsaa/.
42 The Infrastructure Investment and Jobs Act (P.L. 117-58) appropriated an additional $25 billion from the U.S.
Treasury General Fund to eligible airports over a five-year period (FY2022-FY2026), including $15 billion for airport
infrastructure projects that increase safety and expand capacity, $5 billion for FAA air traffic control facilities, and $5
billion for airport terminals.
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Europe
Airport privatization in Europe gained momentum when British Prime Minister Margaret
Thatcher’s administration privatized the former British Airport Authority (BAA) in 1987. BAA
had been part of the British Aviation Ministry from 1946 to 1966 and then became an independent
government agency. The transfer of BAA to the private sector in 1987 transformed the airport
sector in the UK and, eventually, in other countries. BAA plc was incorporated under the Airports
Act 1986, which called for dissolution of BAA and the transfer of its property, rights, and
liabilities to a new public limited company, BAA plc. By listing the shares of BAA plc on the
London Stock Exchange, the government privatized the seven BAA airports, including Heathrow,
Gatwick, and Stansted in the London metropolitan area.43 The British government initially owned
a stake in BAA plc but had sold all its shares by 1996. It retained a “golden share” until 2003,
which entitled it to block a takeover by foreign investors.
Under the British approach to privatization, airports’ charges were subject to economic regulation
by the Civil Aviation Authority, a government agency, which had additional authority over the
largest airports. Due to statutory changes enacted in 2012, only airports with more than five
million annual passengers are subject to government regulation of their charges. Heathrow,
Gatwick, and Stansted have been deemed “designated” airports subject to closer regulatory
supervision.44
Some analysts have criticized the privatization of BAA. Some economists, for example, argued
that by selling BAA’s seven airports together, the UK government had, in effect, converted public
assets into a regulated private monopoly.45 In 2009, the UK’s Competition Commission required
BAA plc to divest Gatwick, Stansted, and either Edinburgh or Glasgow airports to maintain
competition.
In 2006, BAA plc was acquired for £10.1 billion by Airport Development & Investment Ltd.
(ADI), a consortium led by Ferrovial Aeropuertos S.A. of Spain. Ferrovial then sold the stakes
that BAA plc held at the time in airports outside the UK, such as those in Budapest, Hungary, and
a few Australian airports. The name BAA plc was officially dropped on November 12, 2012, and
the company was rebranded as Heathrow Airport Holdings Ltd. (HAH). Following the
transactions, Spain’s Ferrovial remains the largest shareholder in HAH, with a 25% stake.
Not all privatized airports in the UK stayed in private hands. Cardiff Airport in Wales, formerly
operated by a consortium of the Spanish companies Albertis and AENA,46 was purchased by the
Welsh government for £52 million in March 2013. The private owners were interested in selling
after annual passenger numbers fell from 2.1 million in 2007 to just over 1 million in 2012, and
43 The other airports originally owned by BAA plc were Glasgow, Edinburgh, Aberdeen, and Prestwick. BAA plc
purchased Southampton Airport in 1990 and sold Prestwick in 1992. International Civil Aviation Organization (ICAO),
“Case Study: United Kingdom,” February 2013, https://www.icao.int/sites/default/files/sustainability/CaseStudies/
UnitedKingdom.pdf.
44 Civil Aviation Authority, Transition of the framework for the economic regulation of airports in the United
Kingdom, 2013, https://www.caa.co.uk/publication/download/14494.
45 GAO, Airport Finance: Issues Related to the Sale or Lease of U.S. Commercial Airports, GAO/T-RCED-96-82,
February 29, 1996, p. 6.
46 Aeropuertos Españoles y Navegación Aérea (AENA, translates to “Spanish Airports and Air Navigation”), the
world’s largest airport group, runs 46 airports and 2 heliports in Spain and has airport holdings in the United Kingdom,
Mexico, and elsewhere. AENA formerly was entirely owned by the Spanish government, but 49% was sold through a
public offering in 2015. See AENA, “Fact Sheet,” https://www.aena.es/en/shareholders-and-investors/generalinformation/fact-sheet.html.
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the airport became unprofitable.47 Prestwick Airport in Scotland, which BAA plc sold to another
private operator in 1992 and was most recently owned by the New Zealand company Infratil, was
purchased by the Scottish government in November 2013 for the nominal amount of £1.48 As with
Cardiff, several carriers had ceased service at Prestwick and passenger numbers had fallen
sharply.
After the British privatization action of 1987, numerous European governments (including
Germany, Italy, and Spain) privatized their major airports, either fully or partially. Some of these
private owners or operators then acquired full or partial ownership interests in other airports. At
the same time, some public sector airport operators expanded by providing management services
to other airports. Entities such as AENA, Ferrovial of Spain, Fraport of Germany, and Schiphol
Group of the Netherlands are active internationally. Schiphol Group, of which the Dutch
government is the majority owner, rebuilt and now operates Terminal 4 at JFK. According to
Airports Council International Europe, in 2020, fewer than half of the European airports were
100% owned by public entities (down from about 78% in 2010); approximately 31% of European
airports are owned by mixed public-private shareholders, and 21% are fully privatized.49
Canada
The Canadian Air Transportation Administration (CATA) of the Department of Transport (later
renamed Transport Canada) owned and managed most airports and air navigation facilities in
Canada until the early 1990s. In 1992, the Canadian government started to devolve the operation,
management, and development of airports in Canada from Transport Canada to local airport
authorities (LAAs) that were set up as not-for-profit corporations. These LAAs are fully
responsible for funding all operating and infrastructure costs and must invest all profits back into
the airports.50 As a first round of airport transfer, the federal government leased out four major
airports in the summer of 1992—Calgary, Vancouver, Edmonton, and Montreal.51
In July 1994, Transport Canada announced a National Airports Policy (NAP) that grouped
airports into 5 categories: National Airports System (NAS) airports (26), regional and local
airports (71), small airports (31), remote airports (13), and Arctic airports (11). The NAP required
that ownership of regional and local airports be transferred from the federal government to
regional or local interests, such as provincial and local governments, airport commissions, and
private businesses. The NAS airports—that handled more than 200,000 passengers per year or
served provincial or territorial capitals—were leased to Canadian Airport Authorities (CAAs),
not-for-profit and non-share corporations similar to LAAs that are responsible for operations,
management, and capital expenditures. The government retains ownership of the airports and
receives rent payments from the CAAs and LAAs.52
47 Auditor General for Wales, Welsh Government Acquisition and Ownership of Cardiff Airport, January 28, 2016,
https://senedd.wales/media/qk5buy2u/agr-ld10522-e.pdf.
48 Auditor General for Scotland, The Scottish Government’s Purchase of Glasgow Prestwick Airport, February 2015,
https://audit.scot/docs/central/2015/nr_150224_prestwick_airport.pdf.
49 Airports Council International (ACI) Europe data, per email exchange between CRS and ACI.
50 For more detailed information, see Transport Canada, “List of airports owned by Transport Canada,”
https://tc.canada.ca/en/aviation/operating-airports-aerodromes/list-airports-owned-transportcanada#National_Airports_System.
51 ICAO, Air Transport Bureau, Economic Analysis and Policy Section, “Case Study: Canada,” January 9, 2013,
https://www.icao.int/sites/default/files/sustainability/CaseStudies/Canada.pdf.
52 ICAO, Air Transport Bureau, Economic Analysis and Policy Section, “Case Study: Canada.”
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The Canadian government removed operating subsidies from regional and local airports over a
five-year period. In its place, an Airport Capital Assistance Program (ACAP) was established to
provide federal funding for safety-related airside capital projects at these airports. Per a NAP
requirement that all small airports be transferred to local interests or closed, 30 of the 31 small
airports have been transferred to local interests. The government continues to support remote and
Arctic airports that service isolated communities.53
Except for the airports operated by or on behalf of Transport Canada, the federal government does
not regulate airport charges at airports already transferred to CAAs, LAAs, or local interests. The
government permits airport authorities to determine airport charges as long as they are
nondiscriminatory and competitive. Airports are free to impose local passenger fees to generate
revenues for capital improvements or infrastructure expansions.54 The airports pay hundreds of
millions of dollars per year in rent to the Canadian government and hundreds of millions in
“payments in lieu of tax” to municipal governments across Canada. In 2024, Transport Canada
collected C$525 million in land lease from NAS airports.55
Some critics of Canada’s “users pay” system question whether it has benefited aviation
consumers. Some contend that these “quasi-independent” authorities, whose board members are
often nominated by municipalities, often represent the interests of local stakeholders.56 A 2012
report prepared for the Canadian government’s Standing Senate Committee on Transport and
Communications indicated that passengers departing Canadian airports often pay 60%-75%
above the base airfare to cover taxes and charges, compared with 10%-18% in the United States.
In the past, many passengers to and from Canada used airports on the U.S. side of the border,
where fees and taxes are lower.57
Potential Issues and Options for Congress
Some Members of Congress have considered airport privatization as a way to save money by
making airports less dependent on federal assistance while, in the long run, increasing the nation’s
aviation capacity to meet growing demand for air travel. Under current federal law, privatization
has struggled to achieve these goals. Federal AIP spending is ultimately determined through the
budget process, and therefore budget savings may or may not result from airport privatization.
53 ICAO, Air Transport Bureau, Economic Analysis and Policy Section, “Case Study: Canada.” Eight Arctic airports
were transferred to territorial governments between 1995 and 1996.
54 ICAO, Air Transport Bureau, Economic Analysis and Policy Section, “Case Study: Canada.”
55 Daniel-Robert Gooch, “Why Canada’s airport model is working for taxpayers,” The Globe and Mail, March 7, 2014;
Michel Kelly-Gagnon and Alexandre Moreau, “Canada’s sky-high airport fees create turbulence for carriers,” The
Globe and Mail, June 6, 2016; and Canadian Airports Council, “Building One Strong Economy,” August 2025, p. 3,
https://canadasairports.ca/wp-content/uploads/2025/08/CAC-PBS-FINA-2025-FINAL-002.pdf.
56 Charles McMillan and George Stalk, “It’s time to privatize Canada’s leading ports and airports,” The Globe and
Mail, February 17, 2014.
57 The Hon. Dennis Dawson and the Hon. Stephen Greene et al., The Future of Canadian Air Travel: Toll Booth or
Spark Plug? Report on the Future Growth and Global Competitiveness of Canada’s Airports, Prepared for the Standing
Senate Committee on Transport and Communications, June 2012, https://sencanada.ca/content/sen/committee/411/
trcm/rep/rep05jun12-e.pdf. Kelly-Gagnon and Moreau’s June 6, 2016, Globe and Mail article, “Canada’s sky-high
airport fees create turbulence for carriers,” echoed these estimates that 80%-85% of passengers at Plattsburgh, NY, and
30% of passengers at Burlington, VT, are Canadian and that every year about 5 million Canadians cross the border to
fly from U.S. airports. Also see “Flights are more expensive in Canada than the U.S. due to tax: ‘Ottawa prefers to treat
our airports as cash cows,” National Post, December 7, 2023, https://nationalpost.com/news/canada/airlines-feescanada, https://nationalpost.com/news/canada/airlines-fees-canada.
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Privatization outside the framework of the AIPP is generally viewed as unattractive to both
airport owners and potential investors, as it is likely to result in higher financing costs and loss of
federal AIP grants and does not tend to provide the public sector owner with revenues that can be
used for other purposes. Privatization under the AIPP may generate minor reductions in federal
outlays because of the requirement for a privately run airport to match a larger share of federal
AIP grants (see Table 1). It is unclear whether full privatization serves the interests of public
sector owners or air carriers, except in cases where the airport is losing money or the owner can
channel the proceeds of privatization into capital projects at other airports. Private investors’
ability to earn money from an airport privatized under the AIPP is limited by restrictions on
passenger facility charges and limitations on increases in other airport fees. Air carriers, in most
cases, see benefits from privatization only if they can negotiate lower rents and landing fees in
return for agreeing to airport privatization, which could diminish the potential financial return to
investors.58
Congress could terminate the AIPP; this might not result in program administrative cost savings,
since the program does not appear to have a dedicated office within FAA—it has been managed
by the FAA Office of Airports Compliance and Management Analysis. If Congress were to
terminate the AIPP, few airports would be affected, but FAA would need to facilitate transition for
those airports privatized under the program.
Congress may choose to keep the program and introduce new measures that would affect it.
Although streamlining the application and review process alone has not appeared to attract
airports to the program, it might make privatization eventually more attractive by reducing the
risks arising from the long application period, such as changes in economic and capital market
conditions. To significantly increase interest in full airport privatization, structural changes to the
existing airport financing system might be considered.59 Congress might consider the following
options if it were interested in reforming the existing program or establishing a new one.
•
•
•
Offer the same tax treatment to private and public airport infrastructure
bonds. This could be done by eliminating the current federal income tax
exemption of interest on bonds issued by public sector airport owners or by
extending tax-exempt or tax-preferential treatment to airport infrastructure bonds
issued by private investors. Either change would help eliminate a disincentive to
shift airports from public to private ownership. Removal of the tax exemption on
public sector airport bonds could raise airports’ financing costs, whereas
extending it to private sector bonds could have consequences for federal
revenues.
Change AIP requirements. If Congress were to reduce the percentage match
private operators must provide to obtain AIP grants to the level of comparable
public operators, privatization might become more attractive to private investors
while increasing the share of federal funding.
Relax AIP grant assurances. If private investors were freed from some of the
requirements agreed to by the public owner in order to obtain AIP funds,
privatization might become more attractive to investors. However, some of the
changes that might be most attractive to investors, such as allowing the sale of
58 Brad McAllister, “Exploring Privatization,” Airport Business, January 26, 2011.
59 Robert Poole, “Incentivizing US Airport Privatization,” Hutchins Center on Fiscal & Monetary Policy at Brookings,
August 2025, https://www.brookings.edu/wp-content/uploads/2025/08/Incentivizing-US-AirportPrivatization_Poole.pdf.
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•
•
airport property, might interfere with the federal interest in maintaining aviation
system capacity and safety.
Liberalize rules governing fees. Allowing privatized airports more flexibility to
impose passenger facility charges and raise rents and landing and ramp fees
might make privatization more attractive to investors. This might also increase
airline opposition to privatization and could lead to higher costs for passengers
and air cargo shippers.
Ease limits on use of privatization revenue. If public sector owners faced fewer
obstacles to using privatization revenue for non-airport purposes, this could
stimulate local and state government interest in privatization. On the other hand,
it could lead to a lower level of investment in aviation infrastructure.
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Appendix. Airport Definitions
Title 49, Section 47103, of the U.S. Code requires the Secretary of Transportation to publish a
national plan for the development of public-use airports in the United States. This appears as a
biannual Federal Aviation Administration (FAA) publication called the National Plan of
Integrated Airport Systems (NPIAS), which lists nearly 3,300 airports across the United States
that are considered significant to national air transportation.60 These airports, which range from
large publicly owned commercial airports to small general aviation airports that may be privately
owned but are available for public use, are defined and categorized below.
Commercial Service Airports
Commercial service airports are publicly owned airports that receive scheduled passenger service
and board at least 2,500 passengers per year. There are 502 commercial service airports.
Primary Airports
Primary airports are defined in 49 U.S.C.§47102(16) as public airports receiving scheduled
commercial service with 10,000 or more enplaned passengers per year.
•
•
•
•
Large hub airports are defined in 49 U.S.C. §47102(11) as commercial service
airports that each account for 1.0% or more of total annual U.S. passenger
enplanements (31 airports, 71% of all enplanements).
Medium hub airports are defined in 49 U.S.C. §47102(13) as commercial service
airports that each account for between 0.25% and 1.0% of annual U.S. passenger
enplanements (33 airports, 17% of all enplanements).
Small hub airports are defined in 49 U.S.C. §47102(25) as commercial service
airports that each account for between 0.05% and 0.25% of total U.S. passenger
enplanements (74 airports, 8% of all enplanements).
Non-hub airports are defined in 49 U.S.C. §47102(14) as commercial service
airports that each account for more than 10,000 but less than 0.05% of systemwide passengers (252 airports, 3% of all enplanements).
Non-primary Commercial Service Airports
Non-primary commercial service airports board between 2,500 and 9,999 passengers each year
(112 airports, 0.07% of all enplanements).
General Aviation Airports
General aviation airports do not receive scheduled commercial or military service but typically
support business, personal, and instructional flying; agricultural spraying; air ambulances; ondemand air-taxies; and/or charter aircraft service.
60 FAA, “National Plan of Integrated Airport System (NPIAS) 2025-2029,” updated November 6, 2024,
https://www.faa.gov/airports/planning_capacity/npias/current/.
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Full Privatization of U.S. Airports: Potential Issues and Options for Congress
Reliever Airports
Reliever airports are those designated by FAA to relieve congestion at commercial airports and
provide improved general aviation access.
Author Information
Rachel Y. Tang
Analyst in Transportation and Industry
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Congressional Research Service
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.