Earlier this week, Mayor Daley announced that Midway Airport could become the first privately-run hub airport in the nation, not to mention a major test case for a 1996 Federal Aviation Administration privatization pilot program. Today, Chicago's two major newspapers ...
Earlier this week, Mayor Daley announced that Midway Airport could become the first privately-run hub airport in the nation, not to mention a major test case for a 1996 Federal Aviation Administration privatization pilot program. Today, Chicago's two major newspapers came out in favor of the deal.
The Sun-Times editorial board writes that government has other services that need more attention, especially in tough economic times:
We don't necessarily endorse rampant privatization, but turning to the private sector makes sense for these sorts of assets. Roads, airports and garages are outside the core responsibilities of government and likely will be managed better by private companies.
In other words, we won't miss having them, and we can make good money off them. That's especially important these days, when tax revenue is down and funds to keep Chicago thriving are hard to come by.
The Tribune offers a more tepid endorsement, but hits on similar points:
The guiding principle in all such agreements should be to secure more efficient operations and make government more financially sound. At first glance, the Midway lease appears to pass that test.
When the alderman convene next Wednesday to debate the measure, they should think about the economic effects on both the city and travelers.
As part of the deal, the long-term investors would enter into a 25-year use agreement with the airlines that currently fly into Midway, capping their rates and charges at the outset and freezing them for six years. This puts a ton of pressure on the airport's owners to draw profits from travelers in the way of fees and price increases. Of course, the lessee can increase revenue through other means -- such as cost cutting or adding more retail and dining options -- but there are no guarantees a private enterprise would do so. There also should be a focus placed on oversight. Unless the city makes sure to include in any deal safeguards to ensure the operator maintains or improves the airport's current level of cleanliness, safety and service, Midway could fall into disrepair.
On the other hand, cashing out of the aviation business is an attractive option. Decarbonizing air travel is very tricky and the nation's travel habits will shift significantly in the next few decades. If the city can pay off Midway debts, shore up underfunded city pension funds, and intelligently use an additional $550 million ($450 million of which must be spent on infrastructure projects like new libraries, roads and transit improvements), it might be an ideal time for a cash infusion.