The proposal raised eyebrows around the Washington region: What if the government sold Reagan National and Dulles International airports and used the proceeds to fund other needs?
The idea was floated last week as part of President Trump’s much-anticipated $200 billion infrastructure plan. The aim is to push federal officials to sell, privatize or otherwise dispose of a variety of government assets, including the airports, George Washington Memorial Parkway and other federal properties around the country.
“The Federal Government owns and operates certain infrastructure that would be more appropriately owned by State, local, or private entities,” the plan says. It calls for giving federal agencies “authority to divest of Federal assets where the agencies can demonstrate an increase in value from the sale would optimize the taxpayer value.”
But while Trump has long talked about privatizing certain government functions and agencies, the pitch to sell the airports caught most unaware.
Almost immediately after the announcement, the phones at the Metropolitan Washington Airports Authority began to ring, CEO Jack Potter said. Employees began asking whether their jobs were in jeopardy. The airlines that fly in and out of the airports, which combined served nearly 46 million passengers in 2017, wanted to know what a sale could mean for them. And travelers — don’t even get started on what they were thinking.
“Let me emphasize that there was no participation by airport authority staff in any discussion leading up to this announcement,” Potter said this week. “We were surprised.”
During his report at the authority’s monthly board meeting this week, Potter sought to tamp down concerns about a possible sale, emphasizing that MWAA, which took responsibility for managing the two airports from the federal government three decades ago, has made the airports better. (The airports are leased from the federal government.)
Before MWAA was created, the airports were managed by the federal government and had to depend on yearly congressional appropriations to keep running. Sure, lawmakers loved to fly in and out of National thanks to its proximity to Capitol Hill, but paying for its upkeep was another matter.
“They weren’t good at it and didn’t pretend to be,” James Wilding, who as an FAA official was responsible for overseeing the airports’ operations, said in an interview last year.
Suffice it to say, by the time other needs were taken care of there often wasn’t much left to fund the airports.
It took years, but it was U.S. Transportation Secretary Elizabeth Dole who finally persuaded Congress to turn management over to an independent entity, MWAA, which would have the ability to do things like sell bonds to pay for upgrades.
“Before the airport authority began operating, Reagan and Dulles had fallen into a bad state of repair,” Potter noted.
An analysis by Fitch Ratings, which specializes in credit ratings and financial research, pointed out the obstacles to brokering a sale. There’s the $4.5 billion in debt tied to improvements at the two airports. And then there’s the paperwork. MWAA leases the airports from the federal government, and that lease isn’t set to expire until 2067. It can’t be canceled without approval from all parties. And while the federal government owns the land and everything that was built when the lease was signed in 1987, the improvements are owned by MWAA — at least until the lease expires.
“Fitch views the sale of any major U.S. airport to be a challenging endeavor with many stakeholders in the private and public sector to satisfy,” the company wrote in its analysis. “That said, the two Washington, D.C.-area airports face even more difficult steps to work through to effectuate a divestiture.”
So yes, there are, ahem, issues. And even if those obstacles could be overcome, there is another question: Who would buy an airport?
The state of Virginia, home to both airports, would seem to be the most logical candidate. But officials are unlikely to be eager to add either to their portfolio.
There is one other possibility. With Amazon eyeing several possible D.C.-area sites for its second headquarters, perhaps CEO Jeffrey P. Bezos (who, yes, also happens to own The Washington Post) might consider investing. Forbes pegs his net worth at $121.8 billion, so the $4.5 billion in airport debt might not be a dealbreaker.
Just consider the possibilities — special perks for Amazon Prime subscribers; a place to house that fleet of delivery drones (flight-zone restrictions notwithstanding).