Airport Privatization in STL

This was written by Riley, one of our summer interns. The opinions expressed herein do not reflect those of Civitas other than respect for the value of open dialogue.

The St. Louis Lambert airport has been an essential part of the city’s economic growth and expansion since it was created in the 1920’s. Not only did the airport bring large amounts of customers from all over the world, but it also made airplane production in the St. Louis area ideal. Although the St. Louis airport is not the international hub it used to be, it is still one of the fastest expanding economic areas in the city, and some say the airport is having trouble keeping up with that pace. 

The Lambert Airport is owned and run by the City of St. Louis as it has been since its creation; however, the airport seems to be having trouble keeping up with the number of airlines and flights wanting to come into the city. A shortage of terminals with not enough funding to build more has some speculating that the city is losing potential revenue.  In order to fix this problem, the airport has come up with the idea of privatization. 

Airport privatization is the idea that companies buy the airport, and they control the price the airlines have to pay to use the terminals.  The reason behind implementing privatization is that the companies can easily get investors to help them expand the airport quicker than the government could. Despite the ability for expansion, however, there is one large problem with this plan. Unlike the government, businesses need to turn a profit. In a situation like this, the best way to make the largest profit would come at the disadvantage of the consumers. The privatization of an airport creates a monopoly. When an airline is looking to land in our city, it has no other options but Lambert airport. Because of this, they have to pay whatever price the company puts forward. When airlines have to pay more to even get a spot in the city, they have to increase their ticket prices to cover their losses. This may sound like a normal problem in the business world, but it actually creates a lot of unnecessary consumer losses. This is a direct result of the airport having zero competition.

The monopoly problem is the reason that the government controls the airport in the first place. Due to the fact that the government is not looking for a profit, it only charges what it must pay employees and to keep the airport functioning. With government control, it destroys the unfair price hike on customers, that way more people are able to come into the area. If a company were to control the airport instead, they would charge the airlines higher prices, meaning that less could afford to come into St. Louis. Without those people in St. Louis, a great deal of money circulating in the city is lost, meaning there would be less money to spend and give to people in our area. It ultimately hurts the community, and has been seen to harm the economy and consumers in places that privatized their airports such as Australia and parts of Europe. 

Even with the negative impact of privatization, discussion continues around privatizing Lambert Airport. Francis Slay, the former mayor of St. Louis, wanted the airport to expand at a faster rate, hoping to increase the amount of revenue coming into the city which is something the majority wants. The problem, as mentioned before, is that the government does not have enough money to expand the airport in a way that would have a real impact on the amount of revenue it would bring in. Slay’s friend, Rex Sinquefield, a large businessman, gave the consulting committee millions of dollars in an attempt to help them make a decision. However, Sinquefield is one of the people that wants to buy parts of the airport; Sinquefield wants to obtain all the revenue that the government is missing out on by giving people fair prices.