Airport Privatization 2

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Airport Privatization:


Airport plays a key role of air transport; it has a big impact on development of economics in a country. Freight passengers and cargo to any part of the world and it allows aircraft to land and take off. An airport has to have a proper infrastructure, which consists of runaways, taxiways, apron, terminal for arrival and departure of passengers, terminal for freight and ground interchange. It should have a wide range of facilities; lounge for passengers, shops and a food court. For safety and security it has to have an air traffic control to monitor all the incoming and outgoing flights to take off and land, security personnel requires for baggage checks, individual screening using metal detectors, and rules against any objects that may threat to passengers, staff and airport. A ground handling or a handling agent who addresses many services in an aircraft when it takes off and land plays a major role in an airport. Airport can bring a wealth, provide employment and help the stability of the community it served in social and economic development. Beforehand airport viewed as public utilities, owned by a national or local government operated by government or airport authority.

On this paper we will discuss the following:
* Airport Commercialization/Privatization
* Effect on Customer Service and Quality.
* Effect on airline operating costs.

The three developments of airports sector:
* Airport Commercialization
Is the transformation of an airport from a public utility to a commercially enterprise and adoption of a more businesslike or philosophy? * Airport Privatization
Transfer of management of an airport, as ownership to private sector by a variety of methods. These include share floatation, the adoption of strategic partnership or the introduction of private management contracts. * Airport Globalization

The emergence of a few global airport companies who are operating at an increasing number of airports around the world.

Beforehand airport viewed as a public ownership, most of the European airports and even in United Kingdom is owned by a national government, even the airports in Tokyo, Singapore, Bangkok, Sydney and Johannesburg. Even in United States, where

Local government owns most of the airports. As the increasing demands of the airline operate in an airport and the government cannot provide financially, the commercialization and privatization is the answer to meet airline requirements and be more efficient. Privatization will reduced the need for the public sector investment and free access to commercial markets. It will reduce government control and may increase organization ability to diversify. It will improved efficiency and a greater competition and wider share ownership. Airport privatization has seen a way to finance airport future investment. One of the major sources of airport financing namely are public sector funds, which at this day are not eligible to support due to global economic situation.

The feature in privatizing the airports or airports activities has been the commercialization of these operating systems, before under the government control many of the airports did not meet the operation costs, in privatization it covers all operating costs, but use of private capital demanded that a return in investment had to be generated.

In addition, privatization, has in some cases, been achieved in two stages. The first stage is commercialization possibly through ownership and operation under parasternal organization, followed by the final sale of entity to the private sector. Privatization of major British airports is an example of this approach, where the principal airports were first commercialized

Under parastatal agency, the British Airport Authority which was privatized as BAA plc. 1987 by means of public share issue.

In 1996 is the turning point of privatization in airport industry it become a much popular...
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