In my piece yesterday arguing for privatizing airports, I wrote:
Airports, when well-managed, should be profitable enterprises. They are not public goods in the economic sense of the term. A public good is non-rivalrous and non-excludable, meaning that one person’s use of the good doesn’t leave less of it for others and there is no feasible way to prevent free-riding. Neither of these conditions holds for airports. One plane landing or using a gate means another plane cannot, and even publicly owned airports charge various fees to planes to prevent free-riding.
That point is important for economics, but it isn’t always important for politics. In politics, there’s a much looser definition of “public good,” which is roughly “a thing we think should be funded by taxpayers.” For example, highways are not public goods in the economic sense of the term — it’s very easy to exclude free-riders with tolling — but highways are often labeled a public good anyway because they are mostly publicly owned and funded with tax revenue.
Even in this looser sense of the term, airports ought not be considered public goods. At least highways are used by nearly everyone, and 92 percent of American households have at least one car. Truckers, of course, use the highways much more than others, and people who live in central cities might not drive, but in general, highways are used by a broad swath of the population.
This is not true of airports. The median American adult has not flown in the past year. A small fraction of business travelers generate a large proportion of the aviation industry’s revenue, and that revenue ultimately comes not from the passengers themselves but from their employers. There is not a compelling public-good case for taxpayers to fund the infrastructure that supports this travel.
That is especially true because airports can often be public bads, in the sense that they can be dens of public corruption:
- Denver International Airport CEO Phil Washington, Joe Biden’s nominee to lead the Federal Aviation Administration, withdrew in 2023, in part because he was named in an indictment over a no-bid contract he oversaw in his previous job working for Los Angeles County’s transit agency.
- The supervisor of the Detroit Metropolitan Airport was convicted in 2020 of receiving over $6 million in bribes after steering $43.7 million worth of contracts to co-conspirators.
- “In Atlanta if you want to open a restaurant you donate to a political campaign and pay the former mayor’s daughter,” Gary Leff wrote in 2020. “The airport’s former manager was fired for being insufficiently corrupt, and then the city council buried the payments that bought his silence.”
- In 2012, a contractor with ties to the Daley family won a $115 million no-bid contract to operate the people-mover system at Chicago O’Hare.
- The brother of the mayor of Philadelphia made $30,000 per month as an airport consultant from 2001 to 2004 despite having no background in the industry. He was convicted of tax evasion in 2008.
- It is impossible to adequately summarize the decades of corruption at the Port Authority of New York and New Jersey, which operates the airports in the New York City area, in a bullet point.
If you want more examples, just type “[insert big city here] airport corruption” into a search engine, and you’ll likely find something. Of course, private companies don’t always operate ethically. But it’s much harder for publicly traded companies with attentive shareholders to engage in this kind of petty corruption and wasteful spending than it is for big-city politicians to do so.
American airports provide economic value to paying customers, like grocery stores, barber shops, and movie theaters — and airports in other countries. They should not be government projects.