Lambert Accepted Into FAA Airport Privatization Program
The Federal Aviation Administration (FAA) has accepted the City of St. Louis’s preliminary application for St. Louis Lambert International Airport to participate in the agency’s Airport Privatization Pilot Program. Lambert is the second medium hub airport to join the program, which has slots for a total of 10 airports.
The development could have future implications for the airport’s role in air cargo and international trade.
The airport privatization pilot program is designed to allow airports to generate access to sources of private capital for airport improvement and development. The program was established by Congress in 1996 and expanded in 2012. With the approval of Lambert Airport, St. Louis may select a private operator to manage the airport, negotiate an agreement, and submit a final application to the FAA for approval.
“Today’s announcement demonstrates the administration’s commitment to leveraging innovative financing strategies to revitalize our nation’s aviation infrastructure,” said Secretary of Transportation Elaine Chao. “As we’ve already seen in San Juan, this approach to airport management increases productivity, revenue, and operating efficiency for airports, creating greater access to capital for infrastructure needs.”
St. Louis Lambert International Airport (STL) is a medium hub airport in St. Louis, Missouri, owned and operated by the City of St. Louis. The airport is located about 10 miles northwest of St. Louis and is the largest airport in the State of Missouri. The airport has four runways, and the dominant carriers are Delta and Southwest Airlines. Several other airlines also provide service, including American, United Airlines and regional carriers.
The city said in its preliminary application that its goal was to create Public-Private Partnerships that would use innovative ideas to improve airport operating revenues with a private operator. Some of the ideas include maximizing additional parking revenue and increasing cargo revenue by utilizing additional land assets. The city anticipates that this venture would expand regional economic development and align with other multi-modal transportation projects, such as highways and rail to support airport infrastructure.
The FAA approved the Puerto Rico Ports Authority’s final application for the Luís Muñoz Marín International Airport on February 25, 2013, marking the first time a medium hub airport was privatized. As of the end of 2016, airport operator Aerostar made capital expenditures of over $176 million.
The private operator of an air carrier airport may receive Airport Improvement Program (AIP) grants and collect Passenger Facility Charges. Under the program, private operators of a medium hub airport such as Lambert are entitled to the same level of grant participation as public sponsors: 75 percent federal and 25 percent local.
“This is a great opportunity to explore a public private partnership for the airport,” said St. Louis Mayor Lyda Krewson. “I appreciate their consideration of our application and look forward to working with the FAA throughout the process, but as always, the key is in the details.”