St. Louis to exit airport privatization program

The Mayor of St. Louis has requested that the city’s airport be withdrawn from the US Department of Transportation’s Airport Investment Partnership Program (AIPP)

Mayor Lyda Krewson has asked her representative on the city’s Airport Working Group to not proceed with the RFP for the St. Louis Lambert International Airport AIPP.

In her letter to the group Krewson noted she has been listening to “residents, business leaders, and other elected officials who have expressed serious concerns and apprehension about this process, and the possibility that a private entity might operate our Airport. It’s no secret this form of operation is common in other parts of the world, but St. Louis would be the first major airport in the U.S. to lease its full operation. And being 'first' at anything brings inherent risk and skepticism."        

She adds: “But the fact remains our Airport has 1,000 unused acres of land, USD900m of capital requirements over the next 10-15 years, a big runway which is underutilized, almost USD700m in debt, and has serious capacity issues.”

In the letter she thanked the coalition of advisors, the 18 teams that responded to the RFQ and the airlines for their efforts

She concludes: “the business community and the Airlines stand committed to finding a different way to make these major investments in our Airport so that it’s positively positioned to drive economic development, growth, and momentum for our great City.”

The FLY314 Coalition of Advisors was selected by the City of St. Louis through a competitive bid process whose contract was approved by the City Board of Estimate and Apportionment.

In a response to the letter, Paul W. Payne, Budget Director & Chair, responded on behalf of the Airport Working Group that: “This effectively will end the current exploration efforts of the City and its participation in the FAA's AIPP program. Steps to formally wind down this effort are expected to take place over the next several weeks. While not achieving the ultimate objectives that the City had identified at the beginning of the process, the amount of Airport information gathered through the diligent work of the various consultants, airline representatives, Airport staff and Working Group together should provide a sound foundation for planning for the betterment of the Airport in the years to come.”

The Federal Aviation Administration (FAA) accepted the City’s preliminary application to participate in the program on April 24, 2017. The City must prepare a request for proposal to select a private operator, negotiate a lease and submit a final application.

Congress established the Airport Investment Partnership Program (formerly Airport Privatization Pilot Program) in 1997 to explore privatization as a means of generating access to various sources of private capital for airport improvement and development. The Act authorized FAA to permit up to five public airport sponsors to sell or lease an airport with certain restrictions and to exempt the sponsor from certain federal requirements that could otherwise make privatization impractical. Private companies may own, manage, lease, and develop public airports. The 2012 Reauthorization Act increased the number of airports than can participate from five to 10. The 2018 Reauthorization Act renamed the program the Airport Investment Partnership Program and removed the restriction on the number and type of public airports that may participate in the program. The 2018 Reauthorization Act also permitted public sponsors and private operators to manage an airport jointly. It also permit a public sponsor to privatize multiple airports owned by the same sponsor. The airport owner or leaseholder may be exempt from repayment of federal grants, return of property acquired with federal assistance, and the use of proceeds from the airport's sale or lease to be used exclusively for airport purposes.

For more information on the AIPP, click here.

For more information on the St. Louis RFQ process click here.