Realistic approach to improving U.S. airports

It’s the one opinion that Donald Trump and his opponents seem to share: America’s airports are so bad, it’s like “they’re from a Third World country,” as Trump said in the first debate. Vice President Joe Biden used the same phrase to describe New York’s LaGuardia two years ago. Much of the flying public seems to roughly agree.

The sentiment is understandable if you’ve recently transited through a gleaming airport in Singapore, Dubai or Kuala Lumpur. Where LaGuardia has low-end souvenir shops, grim food courts and cramped concourses, these airports have butterfly gardens, jungle trails and sound-proofed, WiFi-enabled snooze cubes. It makes you wonder why the world’s biggest economy can’t keep pace.

One obvious reason is that American infrastructure is chronically underfunded. McKinsey & Company, a global management consulting firm, estimated that the U.S. needs to spend about $125 billion more a year simply to maintain its infrastructure at current levels, let alone make improvements. Airports have been no exception to this trend: Even as air travel has surged, capital spending on aviation infrastructure has actually declined, from $21 billion in 2004 to $13 billion in 2014.

Yet money isn’t the only problem. Even with significantly more investment, U.S. airports would probably never match the world’s best, for a simple reason: They cater primarily to domestic travelers. The best-loved airports — such as Singapore Changi, Seoul Incheon and Tokyo Narita — are international hubs or national gateways. They compete for the business of wealthy long-haul passengers who are willing to spend more time and money at the airport.

Thanks to geography, U.S. airports can’t compete for the lucrative international layovers. That means they don’t have much incentive to spruce things up to meet the demands of wealthier global travelers.

A better comparison for U.S. airports isn’t a national gateway like Dubai International or Incheon, but rather the dozens of airports that China has built in recent years to connect its own cities. Although they can be great architecturally, often they’re little more than shined-up shells housing horrific restaurants, down-at-the-heels retail and sketchy soap-free restrooms.

Even if American airports aren’t as bad, by comparison, as the rhetoric suggests, that doesn’t mean there’s no room for improvement. Last year, one trade group estimated that the U.S. needs to invest $75.7 billion to accommodate passenger and cargo growth at its airports through 2019. Money for such projects is scarce, of course. But one way to bridge the gap is to attract private investors and operators who can make improvements in exchange for long-term leases or even ownership. About 450 airports worldwide have been privatized to some degree, including some of the world’s best.

The good news is that companies are finding ways to invest in some of America’s worst airports. A long-sought $4 billion revamp of LaGuardia is being partly funded by a group of companies working with the Port Authority of New York and New Jersey, which operates the airport. Congress could encourage similar projects elsewhere by offering tax preferences for bonds issued by airport investors.

These reforms won’t necessarily make America’s airports great again. But they would ensure that they’re good enough to get passengers where they need to go, in safety and relative comfort.

Adam Minter is based in Asia, where he covers politics, culture and business for Bloomberg View.

 

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