The paper "Should Airports Be Privatized" is a great example of a literature review on macro and microeconomics. Privatization can be defined as the transfer of business or enterprise ownership from the government/state to a privately-owned entity. According to brook. edu (2011, Pp1), the privatization of U. S airports has generated significant interest in recent years. More than thirty years after a bipartisan coalition approved the Airline Deregulation Act; the issue is being still strongly debated. Those in favor of airport privatization argue that a large number of the major commercial airports are able to operate on a sound economic basis with no government assistance.
Moreover; supporters of privatization argue that it has worked out as predicted; fares fell down considerably in real terms as new competitors clamored to serve viable markets. On the other hand, critics identify numerous cases of bankruptcies, industry instability, and the ever-increasing miserable experiences faced by air travel as proof of its failings. This particular paper, therefore, seeks to evaluate whether airports should really be privatized. According to Diane Publishing Company (2011, Pp32), those in favor of privatization argue that privatized airports would optimize efficiency as compared to the public sector.
Winston and de Rus (2008, Pp9), for instance, identify excessive travel delays in the U. S, as a significant manifestation of the failure of the state-owned and managed airports to implement policies as well as introduce innovations that could greatly enhance the air transportation system. Winston and de Rus (2008, Pp10) therefore contend that the key to reducing problems such as delays is to do away with major inefficiencies of the system that can only be realized through the privatization of the nation’ s aviation infrastructure. Winston & de Rus (2008, Pp9) further highlight that privatizing airports implies operating in a less constrained as well as a more competitive environment.
As a result, privatized airports have the potential to enhance services offered to travelers as well as reducing the cost of carrier operations while maintaining the state’ s excellent record of air travel safety regardless of an ever greater volume of traffic. For instance; Diane Publishing Company (2011, Pp34) points out that the contract to manage the Indianapolis airport by a private company is cost-effective because the company has pledged to cut down operating costs as well as increasing revenue by approximately $140 million over ten years.
brook.edu, 2011, Airline Industry, Retrieved on December, 8, 2011 from http://www.brookings.edu/topics/airline-industry.aspx, 2011, Pp1.
Cato.org, Economic Freedom is Key: New Report Shows Strong Relationship between Economic Freedom and Human Development Indicators, Retrieved on December, 8, 2011 from http://www.cato.org/pressroom.php?display=news&id=56,2006,Pp1.
Diane Publishing Company, 2011, Airport Privatization: Issues Related to the Sale Or Lease of U.S. Commercial Airports, Diane Publishing, 2011, Pp 32-34.
Ng, Charles & Seabright, Paul, 2001, Competition, Privatization and Productive Efficiency: Evidence from the Airline Industry, Volume 111, Issue 473, pages 591–619.
Neufville Richard de. Airport privatization issues for the United States. Massachusetts Institute of Technology. 1999,pp7-8.
Poole, Robert.W. Another Reason for Airport Privatization: Government Ownership of U.S. Airports Thwarts Airline Competition, 2000, Pp1.
Sparks, Evan, 2008, “Should We Privatize Airports?” 2008, Pp1.
Winston, Clifford & de Rus, Ginés. Aviation Infrastructure Performance: A Study in Comparative Political Economy, Brookings Institution Press, 2008, Pp 9-11.
Zakrewski, Dorothea.Airport Privatization-Success or Failure? The Airport Performance Scorecard-A Theoretical Assessment Tool, 2002, Pp 1-4