Detroit Metropolitan Airport: A Case for Privatization

The nation's first comprehensive proposal to privatize a commercial airport was inspired by Britain's successful 1987 effort to privatize eight airports, including London's Heathrow. If Detroit Metro were properly privatized, it would benefit county finances, air travelers, and area economic development.

Contents

• I. Introduction
• II. An Abridged History of Airports
  • Airport Evolution
  • Effects of Airline Deregulation
• III. Detroit Metropolitan Airport
  • Aviation History in Wayne County
  • Airport Growth
  • Airport Finances
  • Meeting Airline Needs
• IV. Airport Privatization
  • The British Model
  • Pricing
  • Political Decisions vs. Business Decisions
  • Metro's Competition
• V. Benefits of Privatization of Detroit Metro
  • Benefits to Taxpayers
    • 1. Income for Wayne County
    • 2. Eliminate taxpayer subsidy of airlines using Metro
  • Benefits to Consumers
    • 3. Consumer-Oriented Management
    • 4. Pricing Freedom
  • Benefits to Airlines
    • 5. Absence of political decision making
    • 6. Lower Operating costs
    • 7. Known landing fees
    • 8. Reduced Airline Charges
    • 9. Avoid Capacity Restrictions
• VI. Privatization Problems to Resolve
  • 1. The Hub System
  • 2. Safety vs. Profit
  • 3. Airline Dominance
  • 4. Municipal Bonding
  • 5. Federal Airport Improvement Program Funding
  • 6. Other Regulatory Constraints
  • 7. General Aviation
  • 8. The Basic Agreement
  • 9. Airline Ownership
  • 10. 1986 Bond Covenants
  • 11. Setting a Price
• VII. Conclusion
• VIII. Appendix
• IX. Bibliography
• Endnotes
• Acknowledgements
• About the Author