UK regional airport commercialisation and privatisation: 25 years on

It has been 25 years since the UK was the first country to begin the process of commercialising and privatising its airports. The purpose of this paper is to revisit the UK Government’s stated aims with respect to commercialisation and privatisation, namely to “encourage enterprise and efficiency in the operation of major airports … [and that] … air transport facilities should not in general be subsidised by the taxpayer … [and they] should normally operate as commercial undertakings.” The authors of this paper consider the success of commercialisation and privatisation against these aims with respect to the 16 UK regional airports commercialised by the 1986 Airports Act part II. In addition, this paper considers the policy ramifications that have eventuated. The authors argue that many of the benefits may have been achievable by commercialisation alone.

► UK airport privatisation and commercialisation has encouraged enterprise and efficiency in the operation of major airports.
► It is difficult to separate out the impact of commercialisation from privatisation.
► There has been the creation of Airport groups and a patchwork of different ownership structures.
► Since 1986 the UK taxpayer has no longer funded the running and development of airports.