The document outlines an agenda for a legal affairs seminar on airport privatization. It discusses the research panel assembled for an FAA study on airport privatization. It then provides a proposed outline for an airport privatization guidebook, including an executive summary, overview of different privatization models, case studies, and appendices. Finally, it discusses reasons why privatization may be attractive to governments and challenges to privatization in the US, such as access to tax-exempt debt and federal grants for airports.

1. Update on ACRP 01-14: Considering
and Evaluating Airport Privatization
Prepared for the
Legal Affairs
Pre-Conference Seminar
ACI-NA Annual Conference
San Diego, California
Dan Reimer, Kaplan Kirsch & Rockwell
October 16, 2011

2. 2
Agenda Outline
Research Panel and Team
Proposed Guidebook Outline/Content
Why is Privatization Gaining Renewed
Attention?
Forms of Governance and What Makes the
U.S. Model Different
Airport Privatization U.S. Style

3. 3
ACRP 01-14 Research Panel and Team

4. 4
Proposed Guidebook Outline (p. 1 of 2)
Executive Summary
Overview
What Makes the U.S. Airport Model Different?
U.S. Regulatory and Policy Framework (including
FAQs)
Range of Privatization Strategies (and examples)
Stakeholder Perspectives
Decision Tree Matrix, Evaluation Checklist,
Process
Summary of Case Studies

5. 5
Proposed Guidebook Outline (p. 2 of 2)
Appendices
Abbreviations and Acronyms
Glossary
International Airport Privatization, Lessons Learned, and
Transaction Summaries
Non-Airport Privatization in the U.S. Transport Sector
Emerging Domestic Issues Influencing U.S. Airport
Privatization
U.S. Regulatory and Policy Framework
Key Stakeholder Interests and Concerns
Detailed Case Studies

6. 6
Detailed Case Studies
First-hand experiences and lessons learned; rebut mythology
Management Contract  Indianapolis Airport Authority
Developer Financing/
Operation
 John F. Kennedy International, Terminal 4 (JFK-IAT)
 Boston Logan International Airport Terminal A
APPP Applicants  Chicago Midway International Airport
 Stewart International Airport
Full Privatization Outside
the APPP
 Morristown Municipal Airport
International Airports  Sydney Airport or Kingsford Smith Airport
 London Gatwick Airport International Airport

7. 7
Why Airport Privatization is Attractive to
Governments
Raise money to offset the effects of General Fund deficits
Leverage airports as catalysts for regional economic development
Remove cumbersome public sector staffing and procurement rules
Maximize revenue while controlling cost
Transfer risk
Improve performance
Participate in the commercialization and globalization in airport markets
Address growing need for airports to do more with less
Provide private source of funding
For escalating investment requirements, given gloomy outlook for federal/state grants,
failures to raise the PFC ceiling, pressures on aeronautical rates, and potentially the loss of
tax-exempt financing)
Each community has different reasons for considering some form of private
sector involvement

8. 8
The Four Airport Pillars of Trust Fund
and PFC Era
1. Airport and Airway Trust Fund – provides multiyear capital for
aviation system infrastructure such as F&E and AIP, as well as the residual
going to FAA Operations. Helped fuel predictable growth in aviation
infrastructure; with user money, kept reliance on taxpayers to a minimum.
2. AIP – Together with F&E, AIP capital program has status of contract
authority and prioritization of AATF revenues. Federal funding support and
leadership critical for airport and ATC investments.
3. PFCs – Source of local capital independent of use and lease agreements,
key instrument to promote competition and capacity. Vital tool to build
airport infrastructure and leverage capital.
4. Tax-Exempt Debt – Instruments such as governmental bonds,
private activity bonds and Build America Bonds promote capital
investment by state and local governments. Provided cost of capital
advantage to public airports.
These four have been critical enablers of airport and aviation growth

9. 9
Overview of Governance at Airports
Governance at U.S. airports typically
occurs through city and county
ownership/governance
In Europe, governance typically occurs
through “corporatization”, which is a
100% wholly owned public corporation
Canada chose the independent ‘not-for-
profit’ corporation governance model
over privatization (private, self-financing,
non-share-capital corporate entities that
do not pay income tax)
Privatization should be viewed as another
form of governance that could be used to
address challenges or other structural
issues that are facing U.S. airports
Context is important
Sources: U.S. Governance: LeighFisher for top 100 U.S. airports based on enplaned passengers.
E.U. Governance: ACI Europe, The Ownership of Europe’s Airports, 2010, 2010.

10. 10
Public Ownership/
Private Operation
Public Ownership/Operation Public-Private
Ownership/
Private Operation
Private Ownership/
OperationGovernment Public
Corporation
Most US Airports AENA (Spain) ALB Athens Branson
French Regional
Airports Brazil BUR Brussels* Auckland
Israel Canadian Airports JFK T-4 Budapest* Australia
Czech Republic Athens Copenhagen* Cyprus
Norway Istanbul Delhi S. Africa
Croatia Bangalore Dusseldorf* Thailand
Finland Cyprus Frankfurt UK Regional Airports
Berlin Argentina Naples*
German Regional
Airports Bolivia Netherlands
Ireland Columbia Mexico
Milan Peru Paris (CDG, ORY)
Poland Rome*
Portugal Turkey*
Russia Venice*
Sweden Vienna*
Examples of Range of Airport Governance
Airports in the U.S. are virtually all publicly owned
* Private sector holds 50% or more of the ownership. Note: U.S. airports are shown in bold (red)
Sources: ACI Europe, The Ownership of Europe’s Airports, 2010; and multiple other sources.

11. 11
The Airport Governance Continuum
Federal and state law support broad
range of governance models
State and local law heavily influence
airport management
Procurement
Staffing, compensation, training, HR
Accounting/budgeting
Debt issuance
Politics typically viewed as negatively
affecting airport management
If change in governance structure,
typically to an authority; less
consideration of corporatization or
privatization
Single-purpose airport authorities have became more common in the U.S.
HighLow
Government operating cost
Low
High
Politicalleverage
Corporatization
Privatization
Authority
Department
Commission
or Board
The Airport Governance Continuum

12. 12
U.S. Airport Privatization Can Take
Many Forms
Privatization is not an all-or-nothing solution
Partial
Privatization
Full
Privatization
LEAST PRIVATIZATION
Contract services
Developer/project finance & operation
Long-term lease or concession agreement
(including Privatization Pilot Program)
Private airport development
MOST PRIVATIZATION
Management contract
Most U.S. airports have a high degree of private-sector involvement

13. 13
• Airport Privatization Pilot
Program
• Long-term lease for full
operation and
development
Upfront Payment
Exit Airport Business
• Cleaning and janitorial
• Conveyance systems
• Aircraft rescue and firefighting
• Police and/or security guards
• Common use equipment
• Parking operations
• Terminal concessions
• Commercial land development
Cost Reduction
Specialized Expertise
• Terminal operation
• Airport-wide management
Management Expertise
• Terminal development
• Fuel systems
• Cargo
• Rental car
• General aviation
• Solar
Capital Investment
Contracting
Services
Management
Contract
Project
Financing
Long-Term
Lease or Sale
• Manchester
• SFOTEC
• Pittsburgh
• JFK-IAT Terminal 4
• BOSFuel
• Austin rental car
• Burbank
• Albany
• Atlantic City
• LA County airports
• Chicago Midway
• Stewart
• Morristown
U.S. Airport Privatization Continuum
The U.S. airport industry has a rich and deep history of experience

14. 14
Disincentives to Privatization in U.S.
CapEx Funding
Access to low cost tax-exempt debt
(changes on the horizon?)
Robust federal AIP grant program (and
sometimes state)
Ability to impose and require airlines to
collect PFCs
Financial
Selling at bottom of economic cycle
High level of debt carried by many
airports
Potential need to repay prior grants upon
the sale or lease of an airport
Desire to retain control – limited
interest in partial ownership
The U.S. airport model is unique
Federal and State Regulations
Federal policy that limits airline charges
Restrictions on revenue diversion
(reduces attractiveness)
Limited incentive for municipalities to sell
unless gain can be realized
Potential need to repay prior grants upon
the sale or lease of an airport
Exemption from property taxes for
municipal owners
Contractual Constraints
Airline agreements that limit airline
charges
Airlines content with status quo, have
strong lobby voice, and have influenced
Pilot Program
Collective bargaining agreements and
public sector unions

15. 15
The U.S. Experiment – Airport Privatization
Pilot Program
1996 AIP legislation allows
Lease of commercial service airports; lease or sale of GA airports
5 slots total
At least one GA airport
No more than one large hub
Public airport sponsor can use proceeds for non-airport purposes IF receive
approval from 65% of the airlines serving the airport accounting for at least
65% of the landed weight
Limits increase in airline rates
Airport can receive AIP grants and levy a PFC
Initial interest in the APPP was limited
Proposed legislative reform: increase the slots from 5 to 10; remove 65% requirement
(consult instead); expand the type of airport “slots” that are available

16. 16
Large-Hub:
1. Chicago Midway International Airport
(final application submitted October 2008,
pending)
Medium/Small Hubs:
2. Luís Muñoz Marín International Airport
(preliminary approval December 2009)
GA Airports:
3. Gwinnett County Briscoe Field Airport,
Georgia (preliminary approval May 2010)
4. Hendry County Airglades Airport, Florida
(preliminary approval October 2010)
Stewart International Airport, Newburgh,
New York by National Express Group
(approved 2000-2007, no longer in
program - Port Authority of New York/New
Jersey now operates)
Brown Field/San Diego Commerce Center
(application withdrawn 2001)
Niagara Falls International Airport
(application withdrawn 2001)
Aguadilla Airport, Puerto Rico (application
withdrawn 2001)
New Orleans Lakefront Airport (application
terminated 2008)
Louis Armstrong New Orleans
International Airport (application withdrawn
October 2010)
InactiveActive
One slot remaining – more slots to come or two track U.S. model?
Status of the Airport Privatization
Pilot Program

17. 17
Full Privatization Under APPP vs.
Outside the APPP
Since 1996, no public airport owner has sought to sell or lease an airport to a private operator
outside the APPP
Full Privatization Pursuant to
Pilot Program (49 USC § 47134)
Full Privatization Outside Pilot
Program (FAA Order 5190.6B)
Eligible Airports No more than five airports
eligible to participate. Only one
slot currently available for a non-
large hub airport.
No cap on number or type of
airports.
Use of Sale Proceeds Public airport sponsor can
request FAA approval to use sale
proceeds for non-airport
purposes. For primary airports,
requires consent of 65% of
airlines. For nonprimary airports,
requires consultation with based
aircraft owners.
Sale proceeds must be used for
airport purposes.
Grant Repayment FAA may excuse public airport
sponsor from any repayment
obligation that may exist.
FAA will excuse public airport
sponsor from any repayment
obligation that may exist.
AIP – Entitlement Private operator is eligible for
grants from the Entitlement Fund.
Private operator is not eligible for
grants from the Entitlement Fund.
Rates and Charges Rates on airlines may not exceed
inflation rate without consent of
65% of airlines. Rates on aircraft
owners may not exceed
percentage rate increase on
airlines.
Rates and charges must be
reasonable and not unjustly
discriminatory, pursuant to Grant
Assurances.
Private Operator’s Charges on
Passengers
Private operator is authorized to
impose, collect and use a
Passenger Facility Charge.
Private operator is authorized to
impose charges on passengers,
subject to reasonableness and
non-discrimination requirements
of the Grant Assurances.

18. Daniel S. Reimer
KAPLAN KIRSCH & ROCKWELL LLP
(303) 825-7000
dreimer@kaplankirsch.com