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The city of St. Louis is currently considering whether to contract daily operations of Lambert Airport to a private company, essentially privatizing the operations and management of Missouri’s largest airport. Lambert was the first municipally-owned airport in the country when St. Louis bought it in 1927, and if the current process is accepted, it would become just the second to be operated by a public-private partnership under an FAA program created in the 90s. Puerto Rico’s San Juan airport remains the only major airport to date that has successfully privatized under this program.

Proponents of privatization–of ceding control over day-to-day operations to a private company–include former St. Louis Mayor Francis Slay and current Mayor Lyda Krewson, as well as billionaire Democratic donor Rex Sinquefield. They argue that considering the current state of the city’s finances, the only way to generate enough money to pay for renovations and pay off the airport’s debt is to attract private investment. If a deal is reached between an advisory council formed by the city and a private firm, and agreed upon by the airlines and city council, then the daily operations and management of Lambert would be privatized, while the city would still technically own it. This would ideally attract large sums of private investment, and in theory increase the efficiency of airport management since businesses are better at running things than the government.

There are a few problems with the arguments of those in favor of privatization. First, there are no outstanding renovations or expansions needed at Lambert. In fact, much of the airport’s current debt is leftover from an airport expansion project in the 90s that ended up being pointless when TWA (a now nonexistent airline) and American Airlines rescinded its “hub” status in 2003.

Since then, however, the airport has seen consistent and significant growth in the quantity of cargo and passengers travelling through it, as well as the revenue it generates for the city. In 2016, the airport generated $6.5 million in revenue for the city and in 2017, logged over 14 million passengers–both figures have been increasing every year, with the number of passengers increasing by 5.5 percent since 2016. This also makes the airport the single most valuable asset owned by the city in terms of how much revenue it generates.

So, if city leaders are concerned about having enough money to renovate the airport in the future and pay off its debt, in addition to tackling the city’s own massive debt, clearly maintaining the status quo is the best option. At the very least, doing nothing is preferable to transferring partial control over the city’s single most valuable asset to a private entity that did nothing to build or maintain it to this point.

Additionally, the airport was able to refinance most of its debt recently, as creditors and bond agencies took note of the airport’s continual growth and competent management. Moody’s, an agency that rates debt based on how likely it is to be paid off, said their 2017 upgrade of the airport’s debt rating was “based on our expectation of growth in enplanements, a significant decline in debt from the historic levels, and a continued increase in debt service with no major capital investment needs” To clarify, “no major capital investment needs” translates to “no major renovations or expansions needed anytime soon.” Mayor Krewson would do well to take heed of Moody’s assessment.

In regard to the argument that privatization leads to more competent management and less waste: we’ve already seen under the leadership of former Mayor Slay and Mayor Krewson how the airport has bounced back and seen substantial and constant growth since a relative dark age beginning in 2003. Even if privatization does lead to the benefits touted by proponents, clearly a change in management is not needed in this case.

U.S. airports are quite competently run,” said Greg Principato, an expert in the field and proponent of airport privatization. “In some parts of the world, it was felt that privatizing the airport would result in more competent management. This is much less of an issue in the U.S….there is no crisis of competence in U.S. airport management.”

There is no actual reason for the city of St. Louis to privatize Lambert Airport to any degree. I’m not going to speculate about what the motivations of city leaders are for pursuing privatization, but until they either clarify why exactly it would be a good thing in this particular instance or reveal some other hidden motivation for doing so, I would hope that the city council would reject any proposal out of hand.

 

About the Writer
Jakob Benedetti, Staff Writer

Jakob Benedetti is a freshman student living in Gries. Originally from Kansas City, he is
currently studying political science and economics, with a minor in Spanish. Jakob is also
involved in SLU Model UN, Mock Trial, and Student Government.

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