Why it Matters

A new Congressional Research Service (CRS) report reveals that U.S. airport privatization, once positioned as a path to private capital and operational efficiency, has largely failed to materialize despite three decades of federal encouragement. As the Trump administration explores public-private partnerships for major airports like Dulles, the evidence suggests structural barriers and real-world complications have kept the model from taking root.

The report, authored by Rachel Y. Tang and released July 22, documents a program that has produced minimal results. Since the Airport Investment Partnership Program's creation in 1996, only three airports have completed full privatization. Two have already reverted to public control, leaving just one private operator still managing a commercial airport. Meanwhile, of 13 total applicants to the program historically, most withdrew before completion.

The findings arrive as the administration signals renewed interest in airport privatization. In December 2025, the Department of Transportation (DOT) issued a request for information (RFI) soliciting design, construction, and financing proposals, including public-private partnership proposals, for Washington Dulles International Airport. The RFI received over 30 responses by the January 20, 2026 deadline, which DOT stated it intends to provide to the Metropolitan Washington Airport Authority for consideration.

But the report's historical record suggests caution is warranted.

The Big Picture

Airport privatization sits at the intersection of two competing pressures facing Congress and the administration. On one side, some members of Congress view airport privatization as a way to save money by making airports less dependent on federal assistance, or to increase the nation's aviation capacity to meet growing demand for air travel by enlisting private sector financing and expertise. On the other hand, the practical track record raises questions about whether private operators can successfully manage complex, heavily regulated facilities.

The stakes are significant. There are 502 commercial service airports listed in the 2025-2029 National Plan of Integrated Airport Systems. Almost all are owned by local and state governments or public entities. Most have some form of private sector involvement, ranging from service or management contracts to full privatization. The question of whether and how to expand private management touches federal spending, local control, and the structure of American aviation infrastructure.

Congress created the Airport Privatization Pilot Program in 1996 through the Federal Aviation Reauthorization Act to increase access to sources of private capital for airport development and make airports more efficient, competitive, and financially viable. The program began with modest goals, capping participation at five airports. The FAA Modernization and Reform Act of 2012 raised that limit to 10 airports. Then, in 2018, the FAA Reauthorization Act removed numerical and type restrictions on participating airports, renamed the program the Airport Investment Partnership Program (AIPP), and allowed joint public-private management and multi-airport privatization within a state.

The expansion reflected congressional optimism, yet the results tell a different story.

Stewart International Airport in New York was privatized in 2000 but reverted to public control in 2007. Avon Park Executive Airport in Florida was privatized in 2024 but its lease was terminated by the city in December 2025 amid allegations of financial mismanagement and contract breaches. Luis Muñoz Marín International Airport in San Juan, Puerto Rico, run by Aerostar Airport Holding, is currently the only airport remaining with a private operator under the program.

Hendry County Airglades Airport in Florida received FAA final approval in September 2019 but has yes to close the deal. The airport took roughly nine years from preliminary to final approval and still hasn't completed its privatization process, illustrating how lengthy and uncertain the path can be.

Financial incentives embedded in federal policy may partly explain the reluctance. Public airport owners can issue lower-cost, tax-exempt bonds; private operators cannot. Privatized airports receive only a 70 percent federal share of airport improvement grants, versus 75 percent to 90 percent for publicly owned airports. Additionally, sale or lease proceeds from airports must generally be used for airport purposes only, unless 65 percent of air carriers approve otherwise.

The international context adds perspective. The United Kingdom privatized the British Airport Authority in 1987 under Margaret Thatcher's government. Canada transferred airport operations to nonprofit local and Canadian Airport Authorities starting in 1992. The U.S. approach however, relying on for-profit private operators, has proven harder to implement.

Political Stakes

For the administration, the Dulles initiative signals a broader openness to private involvement in federal infrastructure. The current administration has proposed cutting the TSA budget by $52 million and requiring small airports to enroll in a program where TSA pays for private security screeners. Transportation Secretary Sean P. Duffy has invested $523 million to modernize airport infrastructure across 43 states, suggesting a mixed approach: federal funding for some projects, private partnerships for others.

For Congress, the CRS report presents a dilemma. Members interested in reducing federal spending face evidence that privatization does not automatically deliver savings or efficiency. Those seeking private capital for airport expansion must confront the reality that private operators have struggled to make deals work or have abandoned them when conditions shifted.

The report notes that the FAA Reauthorization Act of 2024 added a provision to expedite review timelines when a benefit-cost analysis is required for an AIPP application, requiring a preliminary or conditional finding within 60 days. This streamlining suggests congressional recognition that process delays have hindered the program. Yet faster approval timelines cannot resolve the underlying structural barriers to private airport management.

The Bottom Line

Three decades of airport privatization policy have produced minimal market adoption. The program's expansion in 2018 removed legal obstacles but has not generated the expected surge in applications or successful deals, and failed privatizations and extended timelines suggest that private operators face genuine challenges in managing airports under current federal rules and market conditions.

The Dulles initiative will provide fresh evidence about whether current conditions have changed, but the historical record suggests skepticism is warranted.

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