Air Transport World

Pitfalls and promise: Australia's airport privatization gets mixed marks.(Airports)

When former Qantas CEO Geof Dixon retired in 2008, he told ATW that the privatization of airports in Australia would, over the long term, be judged a failure. That gloomy appraisal finds support from one of Dixon's fiercest critics, the Australia Council of Trade Unions, which in a submission to a recent government white paper on the subject claimed that privatization "failed to deliver a higher level of capital investment in aeronautical services and infrastructure; failed to increase traffic diversity from domestic or international destinations; and, failed to improve socioeconomic gains to regional and remote areas."

A contrasting opinion is offered by the Australian Tourism & Transport Forum. This member-funded organization, which advocates for the public policy interests of 200 corporations and institutions engaged in the country's transport, aviation, tourism and investment sectors, describes the process as a resounding success.

Taking a middle view is Peter Harbison, chairman of the Centre for Asia Pacific Aviation, who believes the privatization was handled reasonably well but points to the legacy problems inherited at such airports as Sydney, Brisbane and Perth with separate domestic and international terminals.

Australia's airport privatization program began in earnest in April 1994 when the government announced its decision to sell 22 major and secondary airports owned and operated by Federal Airports Corp., which was established in 1986 as a wholly owned unlisted government enterprise. Complicating the sale process was the use of the lease model common in the US for management of domestic terminals, with some airlines responsible for all operational features and in some cases for maintaining terminal infrastructure and the airport operator providing only the land for the domestic terminals that are under lease. The selloff of the country's 80 airports actually began in 1987 with the smaller facilities being spun off to regional councils through various measures such as the Aerodrome Local Ownership Plan.

Efficiency Goal The stated rationale for disposal of the airports was to "improve the efficiency of airport investment and operations in the interests of users and the general community, and to facilitate innovative management. …

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