Airport Ownership and Regulation

We are delighted to present our global Guidance Booklet, Airport Ownership and Regulation, which was commissioned by The International Air Transport Association (IATA) and researched by Deloitte.

This Guidance Booklet provides analysis and materials to support governments, stakeholders and decision-makers in the aviation industry that are considering public-private partnerships (PPP), privatization and other forms of private sector participation (PSP) in the airport sector. The Guidance Booklet also explores available Regulatory Frameworks and their relevance to the different ownership models.

We explore three key areas in detail:

1.   What are the PPP and privatization options and alternatives?
The spectrum of options is wide, ranging from full government ownership, to forms of corporatization, hybrid models (e.g. service/management contracts); and to those with greater private participation (e.g. equity sales, concessions and full divestiture).

2. How is a PPP or privatization program best delivered?
A competitive and transparent transaction process is a “must have” to assure public value for money. Governments should ensure that bids are assessed on balanced criteria and that the key terms of any concession contract ensure improvement in efficiency, quality of service and appropriate investment in the airport for the airlines and the end-consumers. A key element of achieving this is ensuring that the interests and input of all stakeholders, including airlines and customers, are thoroughly evaluated before decisions are made.

3. How is a privately-owned or operated airport best regulated?
The assessment of an airport’s market power and the development of the appropriate regulatory framework should take place in parallel with an assessment of potential ownership and operating models. Economic regulation is needed to prevent market abuse, secure efficiencies and ensure service quality. When combined with limited or weak economic regulation, all models (private or public) can lead to adverse outcomes.