Last Updated 25 Mar 2020

Airport ownership

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Airport as being fully privately owned enterprise is very important problem. There were a lot of conferences, dedicated to this problem, which tried to examine and study experience of world practice of privatizing and shareholding of airports as one of means to increase effectiveness of work in conditions of market relations.

Some countries cannot make airports being fully privately owned enterprises because they don’t have legal securing in governmental property of usage airports.

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Absences of legalized documents which give right of management by governmental property don’t give opportunity to attract foreign investors, limit development of non-aviation activity, and create a lot of other problems. So, holding such conferences is a good opportunity to determine conditions of reforms in civil aviation and to analyze development of business in airports.

Nowadays integration processes and economic reforms which take place in Europe create qualitative new situation in the field of air transport. In these conditions coordination of efforts in the country, forming of legal regulations and regulation of activity of aircraft companies, airports and other organizations of this field, directed at guaranteeing of safety flights and protection of customers’ interests is very important.

During last dozen of years more then one hundred of governmental aircraft enterprises and airports were made fully privately owned enterprises in Russia – it is more then in countries of Europe, USA and Canada. In the United States the attempts to privatize airports are more successful working with small airports (Robert Poole and Adrian Moore p.2)

There was a possibility to rent an airport a little bit earlier. Actually, anybody was able to rent an airport, runway, avian stations, etc – anybody who paid more. Airport didn’t have any advantage during that rent. The tasks of leaser, which doesn’t care of airport’s problems, are easy to understand: to get higher profit from lease. And nobody knows how the leaser will take care of that leased property.

Aircraft Company, on the contrary, is interested in maintenance of that property on necessary level, because it gets main funds from take-off and landing. (Robert W. Poole p.3)We came to conclusion also that making airport fully privately owned enterprise shouldn’t be made by impulse. It takes years in the European countries to get all permissions to make airport privately owned.

Some aircraft companies consider purchase of airports to be very profitable. For example, “Austrian Airlines” pans to buy airport of Bratislava (Slovakia). The matter it that Bratislava’s airport is located 20 km from Vienna and Austrians want to use this airport as dispersal field. Besides, Slovakia enters European Union and quantity of flight to Bratislava can be increased. Austrians hope to become the main airline not only in Austria, but in neighbor Slovakia.

Indian government also decided to give “green light” to make two biggest governmental airports fully privately owned enterprises, which are located in administrative capital of country New Delhi and financial capital Mumbai (the city, which was known as Bombay).

The minister of civil Aviation Rajiv Pratap Rudy announced in September 11, 2003 that cabinet of ministers adopted plans to sell 74 percent share holdings of both airports to private enterprises. Within eight months government will prepare to auction and to finish receiving of applications (Reuters agency p.1).

Airports will be transformed in two separate companies, with partial participation of government. Accordingly, the companies will be made privately owned separately, with help of auctions. Airports Authority of India, AAI – governmental department, which controls 130 airports in the whole territory of country, will keep 26 percent share holding as well as functions of safety and management of air movement. In such a way the airports will have opportunity to become huge international junctions and to start compete actively with other airports of regions, as well as between themselves.

Airport ownership essay

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