St. Louis is in a rare position of leadership.
The push to privatize Lambert airport is risky; the federal program being considered is largely unproven, and an expensive application process could fail for many reasons or drag for years.
But former Mayor Francis Slay and his successor, Lyda Krewson, are right to give it a shot. The city, facing perennial financial problems, could get four to 10 times its current return from the airport, which is about $6 million per year. As part of a 40-year lease agreement, a private operator could also assume all or some of the airport’s $726 million in debt.
What the region really needs, though, is more air traffic. After falling way off after American Airlines moved its hub, enplanements rebounded slightly but remained flat from 2010 to 2015. A $1 billion runway finished in 2006 is barely used.
Previous efforts, like becoming a major hub for Chinese air cargo, have largely failed, though Southwest Airlines’ growth here is a bright spot.
Destinations follow business demand, leading analysts to doubt whether a private operator can substantially increase our lackluster number of flights. Krewson should make this metric a primary part of the privatization discussion.
But there is reason to be optimistic. We endorse the principle that actors with a profit motive will outperform those without (also known as bureaucrats). In fact, current airport leadership periodically finds itself facing bizarre distractions, like an underutilized reserved parking program and once-secret perks for government insiders.
“The government manages it based on what’s useful for the government, not what’s useful in the private sector,” said Travis H. Brown, president of Grow Missouri, the Rex Sinquefield-backed nonprofit that agreed to finance professional services needed to make the application to the Federal Aviation Administration. The FAA this week gave preliminary approval to the city’s request to explore the privatization.
Critically, making the Lambert public-private partnership a success would open doors for other opportunities. The city’s water division had a $55.3 million fiscal 2017 budget, for example, including $24.2 million for workers.
Other opportunities include street cleaning, trash pickup, ambulance services, and building security and maintenance. There’s a lot to examine, and as Krewson said this week, “the key is in the details.”
SOURCE:St. Louis Business Journal