Shooting Down Airport Privatization Idea
Arthur DeVany argues that the County of Orange should “sell” John Wayne Airport to a private entity.
He suggests the sale of the airport would be beneficial for a number of reasons, each of which falls apart when carefully examined:
1. Privately owned airports have more incentives to operate effectively than government enterprises: Contrary to DeVany’s statements, John Wayne Airport is not “dependent on tax revenue,” but is operated on an enterprise basis at no cost to the local taxpayer through the imposition of fair and reasonable rentals, fees and charges. Because John Wayne Airport is self-supporting, it is subject to the same market rules which apply to private enterprise.
2. A privately owned and operated airport “should do at least as well as one run by the county”: DeVany cites the number of enplaned passengers per employee as a measure of efficiency. John Wayne Airport has one of the smallest staffs of any “comparably sized airport” in the country and, using DeVany’s formula, John Wayne Airport serves over 28,000 enplaned passengers per employee. Applying DeVany’s logic, John Wayne Airport should serve as a model of efficiency.
3. John Wayne Airport should be sold for about $160 million: DeVany’s estimate of a $160-million value is speculative at best, as he admits. DeVany’s convenient formula fails to consider a number of factors, including the county’s current debt obligations of about $250 million in bonds and very stringent federal grant restrictions.
The math is simple. No prudent buyer would pay $160 million for a facility and assume almost $250 million in debt and tough grant restrictions. And no traveler in his right mind would want to pay the cost of using a facility where the owner has to make up such a deficit in addition to a profit.
4. Impressive noise improvements are possible only at privately owned or operated airports: DeVany cites noise improvements at Burbank and infers that they could be achieved only by a private operator.
He overlooks the fact that John Wayne Airport’s noise levels have decreased significantly over the past 10 years, even though the number of operations and passengers served has more than doubled. Our record on noise abatement is unbeatable by just about any airport, anywhere.
5. A private owner would institute noise-related pricing to reward quiet carriers and penalize noisy ones: DeVany fails to recognize that it would be impossible to bring quieter aircraft to John Wayne Airport through noise-based pricing mechanisms because John Wayne Airport is already served by the quietest aircraft available. John Wayne Airport, as a publicly owned and operated facility, has already achieved the type of noise improvements DeVany suggests could come only with private ownership.
DeVany also overlooks the fact that John Wayne Airport’s noise restrictions are punishable by monetary sanctions pursuant to county ordinance--an enforcement tool that is not available to a private operator.
When we talk about selling John Wayne Airport, we need to keep two things in mind: First, why would we want to sell an airport we already own, only to have to pay for it again through the higher air fares and fees on the traveling public and the financially strapped airlines which would surely be charged to pay off the new owner’s investment?
And second, why would we exchange an elected governing body whose primary goal is to provide a service for a private board of directors whose primary motivation is to make a profit? The real bottom line is this: Selling John Wayne Airport just doesn’t fly.
THOMAS F. RILEY, County Supervisor, 5th District
