Access Restriction

Author Poole, Robert W. ♦ Snyder, Bryan E.
Source CiteSeerX
Content type Text
File Format PDF
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Privatizing Los Angeles International Airport ♦ Private Sector ♦ Entire New Airport ♦ Dozen Country ♦ Airport Company ♦ Worldwide Privatization Movement ♦ Private Development ♦ Proven Discount Rate ♦ Babcock Brown ♦ Hypothetical City For-profit Operation ♦ State-owned Enterprise ♦ Annual Increase ♦ Babcock Brown Analysis ♦ Conservative Assumption ♦ New Terminal ♦ Long-term Lease ♦ Los Angeles ♦ Los Angeles International ♦ Net Present Value ♦ City Ownership ♦ Recent Airport Privatization Study ♦ Airport Revenue
Abstract Over two dozen countries, ranging from Britain to Vietnam, are privatizing their airports. Some are selling 100 percent, others a part-interest. Some are leasing out existing airports; others are using long-term leases to permit private development and operation of new terminals or entire new airports. The worldwide privatization movement aims to improve the efficiency and increase the value of formerly state-owned enterprises. Los Angeles International (LAX) would be more valuable if it were privatized. Britain's privatized airport company, BAA, increased in value from $2.5 billion to $4.3 billion in its first five years in the private sector—an annual increase of approximately 11.5 percent. Yet the City of Los Angeles's recent airport privatization study by Babcock & Brown assumed that privatization would make no difference in airport revenues, expenses, or efficiency compared with City ownership. This report revisits the Babcock & Brown analysis, making conservative assumptions about the differences that privatization would make in the operations of LAX over the next 30 years. It then recalculates the net present value (NPV) to the City of selling or leasing LAX, compared with hypothetical City for-profit operation. This calculation uses a more theoretically supportable and empirically proven discount rate and takes into account all revenue flows, including incremental
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Publisher Date 1993-01-01