The privatisation of Australia's airports

When the Federal Airports Corporation (FAC) was formed in 1988, administrat ion of Australia's major airports passed from a Government department to a corporatised entity. The FAC improved the performance of the airports secto r and it broadened the revenue base through commercial and property develop ment. By 1994, however, policy thinking shifted in favour of privatisation. So far, the Government has sold 17 of the FAC's 22 airports and it has rec eived US$2.6 billion (1998/99 values). Four of the remaining airports are i n the Sydney region where there are on-going debates about an appropriate s ite for a second major airport. The paper describes the sales processes and presents details about the new owners, the commitments they have entered into, and the regulatory system t hat has been established for the post-privatisation era. Price-capping arra ngements have been put into place for the major airports, but Australia als o introduced legislation to ensure there is competitive access to essential infrastructure. It is too early to assess the performance of the new owner s and to see how the interaction between access regulation and price cappin g is managed, but this payer documents the pre-privatisation situation to a ssist future researchers. (C) 2000 Elsevier Science Ltd. All rights reserve d.