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Debate Over Airport Privatization - Essay Example

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Summary to essay on topic "Debate Over Airport Privatization"
The shifting of governmental operations and responsibilities to the private sector is referred to as privatization where sale or lease of public assets constitutes to the most extensive functions (United States General Accounting Office, 1996)…
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Download file "Debate Over Airport Privatization" to see previous pages... New airport facilities can be added by such a principal means. Historical roots depict that major highways, bridges, tunnels and telecommunication systems have been developed and progressed by the means of privatization. Theoretical researches reveal that airport privatization has become a world-wide trend since the year 1987 and the early-on of 1994 marked the agenda for privatization of airports for more than 50 countries of the world (Poole,
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1994). The general concept for such an approach in developed countries includes the principal need of major modernization and expansion and the utilization of long-term franchise so as to possess private sector finance which would commence with the development of new terminals, or entirely new airports.
It is an interesting fact of concern that airports are increasingly considered as enterprises rather than public services and around the world, private sector for airport management and development is being acquired by the government of both developed and developing nations. In order to improvise the airport operations, the municipal and state governments of a country can utilize the private sector in various ways. The simplest form of privatization comprises of contracting out the management of an airport on a short-term lease or sale. On the other hand, in order to generate new facilitations or entirely new airports, the private sector can be provided with a long-term franchise to finance, design and operate such facilities. In this way, military bases can be transformed in to commercial airports as well. Objectives of airport privatization are inclusive of a major factor which accentuates in its interest which is government fiscal stress. Since, government of the developing countries often lack the resources in order to develop new airport capacities, they involve private capital and expertise in their arena. Developed countries view airports as assets and businesses as they are more of non-core functions which can better be managed as businesses by private sector enterprises.

However, airport privatization brings about the abdicating control of the government over the management of airports in the private sectors which is quite contemporary, or in other words, deregulatory to some extent. The transfer of an airport, through management or lease, to the private sector is subject to public interest in the airport and its services. Profit-obtainment from a service center is potentially foreseen as a non-profit governmental operation. The funds are harmonized from the pay for the privatization of public airports, the sources of which include the end users and the customers. It, as a whole, criticizes the merits of privatization of the airports as it provides an obstacle to the concept of privatization from both the users and providers of the air transportation services. One of the ...Download file "Debate Over Airport Privatization" to see next pagesRead More
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