Pricing Scheme Urged For Jammed Airports

DEREGULATION over the last 15 years has dramatically changed America's infrastructure landscape.

Lower trucking rates and cheaper air fares have attracted throngs of additional users. Yet government-regulated roads and runways have hardly expanded over the same period.

Airports are choke points because planes can rarely take alternate routes to avoid congestion. Deregulation has had a more visible effect on air traffic than any other segment of transport.

In the United States, 275 million passengers traveled by air in 1978, the year airlines were deregulated. The Air Transport Association reports that by 1990, airlines carried 498 million passengers - an 80 percent increase.

No major US airport has opened since 1974, and the government-run air traffic control system employed almost exactly the same number of people in 1989 as in 1980.

Federal capital spending for aviation increased from $0.8 billion in 1982 to $2.7 billion in 1990. About half of the money went to run the Federal Aviation Administration, while the other half was disbursed as grants for planning and building runways, terminals, noise reduction and safety improvement projects. Still, rapid passenger growth has stretched capacity for handling additional flights to the limit.

Instead of building new airports in major metropolitan areas, many transportation experts advocate more efficient use of the existing infrastructure.

Two of the most common proposals include charging higher landing fees for planes at peak hours ("congestion pricing") and privatizing airport facilities.

Congestion pricing would make landing at 8:30 a.m. at Los Angeles International Airport more expensive than landing at 6 a.m. or 10:30 a.m. A jet that is carrying 250 business passengers will very likely continue to choose the 8:30 a.m. arrival time. A small corporate jet with three people aboard will be forced to either get there early or go to a smaller regional airport.

Deregulation is often blamed for the congestion that has jets lined up on the runway, waiting for a takeoff slot. "The truth is that if there were correct takeoff and landing fees, you could get [greater] access to the airports, more competition, and have more reliable schedules," says Clifford Winston, a senior fellow at the Brookings Institution in Washington. "Problems have largely resulted from mismanagement.... If you want to reduce travel time for deregulated air travelers, the airports have got to

be priced right."

Many local and state officials are considering privatizing airports because they are sometimes the largest business entities in the region. "Privatizing is a way to broaden the tax base by moving infrastructure projects into the private sector," says Steven Steckler, head of the privatization practice of Price Waterhouse.

In proposing privatization of airport facilities, industry analysts point to successes outside the US:

* The British Airports Authority (operating seven airports including Heathrow), was privatized in 1987. By 1990, the BAA had doubled annual capital investment in its airport facilities. Per passenger operating costs have fallen. And in March, the BAA opened a new $750-million terminal in Stansted.

* Toronto International Airport's new, privately developed and operated Terminal 3 opened to good reviews from both airlines and passengers in February.

* In Macao, a $600-million offshore airport is being built with public and private financing. The government owns one-third and private investors the remainder.

* In Hong Kong, about one-third of a proposed $12.8-billion airport is expected to be privately funded.

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