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Could An Airline Build Or Buy An Entire Airport?  
User currently offlineAAgent From United States of America, joined Mar 2001, 560 posts, RR: 14
Posted (9 years 1 month 2 days 11 hours ago) and read 6367 times:

With all of the fuss over Southwest at DAL, and now their proposal to move from SEA to BFI and building a brand new terminal in the process, it makes me wonder...hmmmm... Could an airline just go out and either buy the property to build their own airport, or perhaps buy an already existing airport? I'm sure there are a million details involved, but let's cut to the chase and ask the basic question... Could it be done? I'm sure an airline would love to control an entire airport, lock, stock and barrel. Southwest, American or any other carrier that chose this option (albeit an expensive one) could then essentially do as they please. Any considered thoughts on this matter?

Best Regards,
AAgent


War Eagle!
48 replies: All unread, showing first 25:
 
User currently offlineB742 From United Kingdom, joined Mar 2005, 3767 posts, RR: 19
Reply 1, posted (9 years 1 month 2 days 10 hours ago) and read 6339 times:

Yep, Bangkok Airways at Koh Samui and Sukhothai airport in Thailand.

They run the airports, only Bangkok Airways operate to these two airports!

I think they also run Trat, but I'm not sure!

http://www.bangkokair.com/en/about/airport.php

Rob!  Smile


User currently offlineRichardw From United Kingdom, joined May 2001, 3749 posts, RR: 0
Reply 2, posted (9 years 1 month 2 days 10 hours ago) and read 6308 times:

Airports make money by making gates available to Airlines, a variety of airlines makes filling the slots at gates possible. If a single airline ran an airport it would have to organise itself to fill most slots available at the gates to avoid dealing wih competing airlines.

Shareholders would be confused about what they are investing in, an Airport operator or an airline?


User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 3, posted (9 years 1 month 2 days 10 hours ago) and read 6279 times:

Sure they could...It would be a great idea if you could afford to do it in a place like LA or NY where you could monopolize the market, but it is too cost prohibitive and I'm not sure our anti-trust laws allow for that sort of thing.


One Nation Under God
User currently offlineBoeing7E7 From , joined Dec 1969, posts, RR:
Reply 4, posted (9 years 1 month 2 days 10 hours ago) and read 6267 times:

Technically? Yes.

In reality? No.

Existing airports are already public use. For a private airport the level of investement is in the billions. They could not preclude other operators from serving the airport, which makes a private investment a public one. It opens up a can of worms over leases and landing fees which is why it in affect, can't be done. Then one has to wonder if they could ever get the money to do it in the first place. A new airport with a single runway and a reasonable number of gates would cost about $2.5 Billion.

[Edited 2005-07-22 18:31:25]

User currently offlineAAgent From United States of America, joined Mar 2001, 560 posts, RR: 14
Reply 5, posted (9 years 1 month 2 days 10 hours ago) and read 6249 times:

Quoting Richardw (Reply 2):
Shareholders would be confused about what they are investing in, an Airport operator or an airline?

If (and that's a big "IF") the overall plan were to be a money maker, I'm not convinced that the average investor would be terribly concerned as to exactly what the business was called or how the business was classified as long as it consistently made money...legally.

Best Regards,
AAgent



War Eagle!
User currently offlineAAgent From United States of America, joined Mar 2001, 560 posts, RR: 14
Reply 6, posted (9 years 1 month 2 days 10 hours ago) and read 6232 times:

Quoting Boeing7E7 (Reply 4):
The level of investement is in the billions. They could not preclude other operators from serving the airport, which makes a private investment a public one.

Not doubting you for a moment, but just trying to learn more about the subject, why would an airline that built an airport for it's own use be forced to allow other airlines access to the facility?

Respectfully,
AAgent



War Eagle!
User currently offlineSTLGph From United States of America, joined Oct 2004, 9328 posts, RR: 25
Reply 7, posted (9 years 1 month 2 days 10 hours ago) and read 6206 times:

Quoting Boeing7E7 (Reply 4):
A new airport with a single runway and a reasonable number of gates would cost about $2.5 Billion.

is that including the property buy outs? if it's a private investment, you know everyone is going to be asking top dollar. and with NIMBY's, good luck finding that much space all in one get go.

Quoting Boeing7E7 (Reply 4):
Then one has to wonder if they could ever get the money to do it in the first place.

or the money to keep it running. they'd undercharge themselves on terminal leases, gate/tarmac fees, and undercharge on landing fees. they'd have to get every seat filled and take their $4.42 from PFC's and run with that as far as possible.



Eternal darkness we all should dread. It's hard to party when you're dead.
User currently offlineFA4B6 From , joined Dec 1969, posts, RR:
Reply 8, posted (9 years 1 month 2 days 10 hours ago) and read 6206 times:

Quoting Richardw (Reply 2):
Airports make money by making gates available to Airlines, a variety of airlines makes filling the slots at gates possible. If a single airline ran an airport it would have to organise itself to fill most slots available at the gates to avoid dealing wih competing airlines.

Shareholders would be confused about what they are investing in, an Airport operator or an airline?

Couldnt an airline [if not already the case] form a parent company and make the airline and the airport subsidaries of the parent company?


User currently offlineAfay1 From United States of America, joined Oct 2001, 1293 posts, RR: 3
Reply 9, posted (9 years 1 month 2 days 10 hours ago) and read 6192 times:

If one talks about state-run airlines, technically, many of the world's airports were built by/for one carrier. In addition, there are several airports in Russia under construction by/for one carrier...

User currently offlineCHRISBA777ER From UK - England, joined Mar 2001, 5964 posts, RR: 62
Reply 10, posted (9 years 1 month 2 days 10 hours ago) and read 6192 times:

Dubai airport and EK are AFAIK owned by the same Govt ministry - technically EK's management own Dubai airport. I reckon thats their secret - they pay almost nothing in landing fees etc - and charge the other airlines a fortune to use it.

Thats my theory.



What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???
User currently offlineSEAchaz From United States of America, joined Apr 2005, 220 posts, RR: 8
Reply 11, posted (9 years 1 month 2 days 10 hours ago) and read 6189 times:

While not a passenger airline, Airborne Express (now DHL) bought Clinton County Air Force Base (now Airborne Airpark KILN) in Wilmington, Ohio and became the first airline in history to own and operate an airport.

User currently onlinePanHAM From Germany, joined May 2005, 9277 posts, RR: 29
Reply 12, posted (9 years 1 month 2 days 10 hours ago) and read 6182 times:

There are examples of course. Take Airborne Express and Wilmington OH. Out in the middle of nowhere, relatively cheap labour and dedicated facility with nobody to share.

Another example is Dubai, I am not bashing EK, but the chairman of EK is also chairman of the Government body that oversees airports etc..

In the former East Germany, Interflug did run the airports as well and that is/was the case in all Communist ruled countries. The chairman of Interflug did not come in a business suit but in a Uniform. Real German indeed, a thing the western part did shed some 50 years ago.

In our modern world of outsourcing it does not make sense. As a corporation you would not want to have that asset on your books, an airline is an asset based busibess already. Buy as much as you can from other souces and on short and flexible contracts. That's the way to make money.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineAAgent From United States of America, joined Mar 2001, 560 posts, RR: 14
Reply 13, posted (9 years 1 month 2 days 10 hours ago) and read 6155 times:

Although it would be a tremendous initial investment, it would seem possible that owning at least your major hub could be a wise investment...assuming you would have complete control of the airport.

SEAchaz, is Airborne Express forced to allow other carriers access to their facility (with the exceptions of emergencies, of course.)

Best Regards,
AAgent



War Eagle!
User currently offlineGoldenshield From United States of America, joined Jan 2001, 6003 posts, RR: 14
Reply 14, posted (9 years 1 month 2 days 10 hours ago) and read 6142 times:

While technically not airports, Pan American built their own terminals and related items for their south Pacific service back in the 30's and 40.


Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.
User currently offlineBoeing7E7 From , joined Dec 1969, posts, RR:
Reply 15, posted (9 years 1 month 2 days 10 hours ago) and read 6135 times:

Quoting AAgent (Reply 6):
Not doubting you for a moment, but just trying to learn more about the subject, why would an airline that built an airport for it's own use be forced to allow other airlines access to the facility?

In 2000 a fundamental change was made on how the FAA views the use of airports for commercial passenger service. As a result, they issued an order defining Exclusive Rights provisions, which are tied to bond issuance, FAA support of the facility and a bazillion other pieces of typical bureaucratic headaches. It's incredibly complex, is confusing, and has more loopholes than you can shake a stick at. Mainly because agencies brought together the plans independently vs. a group think. Some provisions conflict with others and no one has done anything to correct it, and I suspect no one will. In a nutshell, however, the overriding factor is access to the facility by anyone who can provide passenger service to ensure competition.

Below is an AC about it, but it has certain provisions that are in conflict with other orders, but it basically defines the rules of equal access. It gives a piss poor example of an exemption by using an FBO. Other provisions on competition in other documents conflict with this issue because the AC doesn't address airline competition.

http://www.faa.gov/arp/ACs/5190-5a1.pdf

Whether an airline can do this is really unrealistic. You have to find land, or an airport, build it and get the FAA to support you in the endeavourer. No airline would be able to build a facility without some sort of Federal Assistance be it grants or authority of bond issuance. It's just too much investment.

One of the reasons so many issues conflict, is that no one thought about this potential - an Airline building an airport (imagine that, the FAA not thinking of something). They looked at it from the position of a corporation owning it's own airport on company land for GA use, such as is the case at Alliance airport in Dallas. It's owned and operated by Hillwood (One of Ross Perots companies). The ABX/DHL facility is another. Even they are required to provide equal access to anyone who seeks access. They are industrial facilities, so the issue over equal access for passenger service is not a driving force.

Where a commercial carrier runs into a wall is how do they insure a level playing field. Who is the neutral party? This is why commercial passenger airports are owned and operated by a municipality of some sort. They become the neutral party to ensure that equal access.

[Edited 2005-07-22 18:56:57]

User currently offlineSEAchaz From United States of America, joined Apr 2005, 220 posts, RR: 8
Reply 16, posted (9 years 1 month 2 days 10 hours ago) and read 6119 times:

Not sure on how/if they share with competitors, just recalled that bit of information from a business class I had back in college.

User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 17, posted (9 years 1 month 2 days 10 hours ago) and read 6114 times:

Quoting SEAchaz (Reply 11):
While not a passenger airline, Airborne Express (now DHL) bought Clinton County Air Force Base (now Airborne Airpark KILN) in Wilmington, Ohio and became the first airline in history to own and operate an airport.

Yes, and there is now a big fight over wether or not it falls under the jurisdiction of the Dayton Metro port authority or the new one they (DHL) is trying to create in Clinton county. It has turned out to be a bg mess.



One Nation Under God
User currently offlineAAgent From United States of America, joined Mar 2001, 560 posts, RR: 14
Reply 18, posted (9 years 1 month 2 days 10 hours ago) and read 6096 times:

I noticed in the first paragraph of the FAA document to which you linked that it states "airports that have accepted federal assistance must comply...". However unlikely, should an airline be able to secure a facility without the use of federal assistance, would they then have complete control over such a facility?

Respectfully,
AAgent



War Eagle!
User currently offlineBoeing7E7 From , joined Dec 1969, posts, RR:
Reply 19, posted (9 years 1 month 2 days 10 hours ago) and read 6092 times:

Quoting DAYflyer (Reply 17):
Yes, and there is now a big fight over wether or not it falls under the jurisdiction of the Dayton Metro port authority or the new one they (DHL) is trying to create in Clinton county. It has turned out to be a bg mess.

Excellent point of the kind of mess the FAA has created by not putting together a comprehensive and complete (even understandable) definition of Exclusive Use.


User currently offlineBoeing7E7 From , joined Dec 1969, posts, RR:
Reply 20, posted (9 years 1 month 2 days 10 hours ago) and read 6071 times:

Quoting AAgent (Reply 18):
I noticed in the first paragraph of the FAA document to which you linked that it states "airports that have accepted federal assistance must comply...". However unlikely, should an airline be able to secure a facility without the use of federal assistance, would they then have complete control over such a facility?

Well that's the hitch. Some projects associated with a proposal require some sort of assistance, such as roadway access which cannot be paid for by the airport sponsor. The local municipality has to provide the access to the airport boundary and unless the municipality has an outpouring of cash (which is never), they issue bonds. Same thing goes for utilities and everything else required to support the airport. In fact, just being connected to the sewer or a Highway usually ties the airport to some level of Federal Investment.

[Edited 2005-07-22 19:10:02]

User currently offlineAAgent From United States of America, joined Mar 2001, 560 posts, RR: 14
Reply 21, posted (9 years 1 month 2 days 10 hours ago) and read 6064 times:

Boeing7E7,

I noticed in the first paragraph of the FAA document to which you linked that it states "airports that have accepted federal assistance must comply with the statutory prohibition on exclusive rights". However unlikely the case may be, should an airline be able to secure a facility without the use of federal assistance, would that airline then have reasonably complete control over such a facility?

Respectfully,
AAgent

(Oops, sorry! I was trying to edit the post but ended up with what amounts to a duplicate.)

[Edited 2005-07-22 19:07:03]


War Eagle!
User currently offlineAAgent From United States of America, joined Mar 2001, 560 posts, RR: 14
Reply 22, posted (9 years 1 month 2 days 9 hours ago) and read 6016 times:

Quoting Boeing7E7 (Reply 20):
The local municipality has to provide the access to the airport boundary and unless the municipality has an outpouring of cash (which is never), they issue bonds.

Perhaps a hefty donation made to the municipality by the airline holding corporation...a donation large enough to cover the costs of access, etc.

Regards,
AAgent



War Eagle!
User currently offlineBCAL From United Kingdom, joined Jun 2004, 3384 posts, RR: 16
Reply 23, posted (9 years 1 month 2 days 9 hours ago) and read 5988 times:

Quoting Boeing7E7 (Reply 4):
Technically? Yes.

In reality? No.

Wll it is going back to the 60s but Silver City Airlines, who operated a car ferry service between England and France, were the sole operators at and owners of Lydd Airport in Kent and, for a period, Le Touget in France.



MOL on SRB's latest attack at BA: "It's like a little Chihuahua barking at a dying Labrador. Nobody cares."
User currently offlineBoeing7E7 From , joined Dec 1969, posts, RR:
Reply 24, posted (9 years 1 month 2 days 9 hours ago) and read 5968 times:

Quoting BCAL (Reply 23):
Wll it is going back to the 60s but Silver City Airlines, who operated a car ferry service between England and France, were the sole operators at and owners of Lydd Airport in Kent and, for a period, Le Touget in France.

We're talking about the US rules on the issue.


25 RogerThat : Interesting ideAA, but airlines don't even own airplanes these days (stretching the truth) for the same reasons that Wal-Greens doesn't own drugstores
26 Post contains images BCAL : My apologies, but non US airports have been mentioned in many posts above.
27 Boeing7E7 : No worries. Hell, you have to jump a billion hurdles just to contract out an airport over hear as IND has done with BA.
28 N62NA : Well, the way AA has been bullying the local government down here, it's as if they own MIAA![Edited 2005-07-22 19:45:09]
29 Ciaomc2002 : Technically, I suppose they could. When Liverpool Airport was rebuilt and turned into Liverpool John Lennon Airport, Easyjet wanted to have a whole te
30 PanHAM : Well,the headline does not restrict the discussion to US airports. Terminal 2 in Munich is a joint venture between Munich airport and Lufthansa.
31 FlyPIJets : The answer to the OP's question is yes, an airline can go out, purchase land and build their own airport. At least in the U.S. they can. Now there are
32 LV : Wasn't MCI originally built and owned by TW as a maintenance and training facility when KC's main airport was still MKC?
33 AAgent : Although I must admit that I am primarily interested in U.S. airports, please feel free to include international examples in this discussion. Who kno
34 Boeing7E7 : One of the many reasons the regulations were changed.
35 SKA380 : Isn't Fraport, who runs FRA partially owned by Lufthansa?
36 Skibum9 : DAYflyer, can you expand upon this a little more. Is the thought that because DAY provides ATC services to ILN, they should have authority? Or is it
37 Alessandro : Sure, Ryanair runs Skavsta a former airbase south of Stockholm.
38 PanHAM : No,LH has no shares in Fraport, It is a publicly listed company with major stockholders the City of Frankfurt, the Sate of Hesse and the Federal repu
39 Backfire : In Russia it's not unusual for an airport and its major airline customer to be part of the same enterprise.
40 DeltaWings : There is one in England; I forgot where though, but it belongs to TUI. And only Airlines of TUI fly there.
41 Post contains images Swalovefield : YES. Doesn't AA own DFW? Robb Dallas, TX
42 DAYflyer : It's a control issue. There were some articles about it in the Dayton Daily News a couple weeks back. Do a google search on it. As far as I can tell,
43 Petertenthije : Some airports own(ed) airlines. For instance London City has a small biz jet company and the company that owns Niederrhein airport also owned VBird wh
44 AAgent : Now that would be too awesome, even for AMR...but a very nice fantasy, no doubt. Best Regards, AAgent
45 Post contains images MikeTheActuary : Now that they're profitable, maybe AA can buy...and close...DAL
46 AAgent : I wonder if some of the top dogs at AMR have considered that option? Interesting... Best Regards, AAgent
47 Planesailing : Ryanair also wanted to open a new airport in Dublin when they had a massive dispute with Aer Rianta over airport charges.
48 PanHAM : That is Coventry, but it is open to anyone. Atlantiuc Airlines, a cargo operator, is a long time ternant there. Another one which is owned by a group
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