October 1, 2018—The US House of Representatives passed the Federal Aviation Administration Reauthorization Act of 2018 last week, just days before funding for the FAA was set to lapse. The current legislation brings a number of changes to the Airport Privatization Pilot Program—including renaming the program and authorizing federal grant funding—and now awaits a vote by the full Senate, expected to occur later this week.
The FAA program, to be renamed the Airport Investment Partnership Program (AIPP), continues to focus on exploring airport Public-Private Partnerships (P3s) as a means of gaining access to private capital for airport improvement and development. One new provision allows airport sponsors to apply for a grant that of up to $750,000 to cover costs related to preparing a preliminary application to participate in the AIPP.
The reauthorization also eliminates the cap on the number of airports that can participate in the program, currently open to a maximum of ten airports. The new legislation eliminates that cap and further authorizes the FAA to consider applications for private investment in multiple airports submitted by a single public airport sponsor.
Though Luís Muñoz Marín International Airport in San Juan, Puerto Rico is the only United States airport currently leased to a private operator under the APPP, private sector participation in airports is a growing trend worldwide. A 2016 report by the Airport Council International found that 41% of European airports have some form of privatization, an increase from 22% in 2010.
The Wicks Group has extensive experience advising airport sponsors on opportunities for private sector investment in airports. TWG has advised the two most recent applicants to the APPP (soon to be AIPP), Westchester County Airport and St. Louis Lambert International Airport, including preparing their preliminary applications and serving as advisors on post-application developments.
TWG’s support to sponsors considering airport P3s encompasses advising on FAA and other regulatory compliance matters, analyses of the costs and benefits associated with leasing airports to private operators, developing detailed timelines to guide the process, leading negotiations between the sponsor and airline stakeholders, drafting of transaction documents, and developing operating standards to protect the interests of public airport sponsors.
For more information about TWG’s services related to airport leasing and other airport P3 transactions, please contact Michael Fleming at email@example.com or (202) 457-7790.
 Airports Council International Europe. The Ownership of Europe’s Airports 2016.