For 51 years Bergstrom Air Force Base was home to fighter pilots, bombers,
troop carriers and reconnaissance jets. It was the first port of call for
President Lyndon B. Johnson on his trips home to LBJ Country aboard Air Force
One, it was where Chuck Yeager, the first pilot to break the sound barrier, once
brought a disabled jet to rest in an emergency landing. In September 1993, in
the path of military cutbacks Bergstrom Air Force Base was closed.
But the timing was fortuitous, because the closure came as the city of
Austin, Texas was considering where to build a new airport. In 1993, the
expected economic loss to Austin from the Bergstrom closure was estimated at
$406 million a year and a loss of some 1000 jobs. But with the possibility of
utilizing the prior Bergstrom Air Force Base as an airport the Austin economy
was expected to have an opportunity to rebound and even improve these results
from the base closure by privatizing the airport.
The trend worldwide toward airport privatization presents an exciting and
dynamic opportunity for the flying public, governments, operators and investors.
The overall success of privatization of airports has been seen by the sale of
long-term leases for three of the largest airports in Australia for $2.6
billion. Following this success, the Government of Australia announced their
plans to privatize fifteen more airports. Several Latin American airports
already are in private hands.
Major airports in Argentina, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay
and Venezuela are already concessioned or scheduled for privatization over the
next two years. Smaller airports in Central America and the Caribbean also are
to be privatized. In Europe, a significant number airports have been privatized
and opportunities are imminent in Germany, Portugal and elsewhere. Governments
in Southeast Asia, Africa, and the world over also are developing airport
privatization plans.
Why has this marked trend emerged and why did the city of Austin choose to
act in this capacity? Governments in many cases do not have the financial
capacity to invest in airport expansion as well as meet other needs of their
citizens. They are recognizing that on one hand there are limits to their own
knowledge of, and expertise, in managing airports; and, on the other, that such
expertise can be provided by others with the effect of reducing costs,
increasing revenues and improving services.
An important objective in many instances is to increase competitiveness and
enhance ability to attract economic development by improving airport facilities
and obtaining additional air service. The private sector increasingly has come
to view airports as an attractive investment; airports serve a dynamic growth
industry--commercial aviation--and represent essential infrastructure with a
near monopoly.
