The previous administration rejected unsolicited offers of NAIA privatization from mega consortiums because it carried conditions that were either grossly disadvantageous to the government or physically impossible to meet. The current administration should be cautious of privatization charmers and instead follow hindsight of the overall global experience that unmasks the ugly face of a monopoly prone to excessive profit taking obscured by this privatization hype.

Globally, no model of ownership (public, private, or mixed) is intrinsically more efficient than the others. There is no clear evidence that supports the implicit assumption of privatization that the private sector is more efficient than the public sector in operating an airport. Efficiency of service under all ownership models depends on factors like competition, regulation, autonomy and wider issues of institutional development (Max Everest-Phillips, Is the private sector more efficient? A cautionary tale, ©2015 UNDP Global Center for Public Service Excellence).

Based on Skytrak Top 20 airport ranking for 2016-2017, the top two airports are Singapore Changi and Incheon, South Korea that are both government owned. Joining the list are the airports in Munich, Vancouver, Taipei, Helsinki, and Shanghai Hongqiao that are also government owned. Four privately owned airports are top ranked: Tokyo Haneda, London Heathrow, Tokyo Narita and Kansai.

Meanwhile, the airports in Hongkong, Doha Hamad, Central Nagoya, Zurich, Frankfurt, Amsterdam and Vienna are under a Public-Private-Partnership model.

Airport privatization in America has been slow to take hold because there is no crisis of competence in airport management that keeps airports producing income and are glutted with government funds for the simple general sense shared by politicians and taxpayers that airports are public goods and should be run for the public benefit; (Greg Principato, Why No Airport Privatization in the U.S. Dec 15, 2017).

In other parts of the world, most large Australian airports are now owned by consortiums of private companies. Currently more than 50% of European airports have some form of private ownership, with this percentage increasing significantly since 2011.

Airports are natural monopolies. Relinquishing control of airports to private consortiums will not change the nature of the airport. Only the orientation will be different as the Government monopoly delivering public service will be replaced by a profit oriented monopoly accountable to stockholders, not the general public. Governments afflicted with regulatory capture will be overwhelmed with the arduous task of stopping unconscionable monopolistic practices such as collecting higher charges and fees (IATA 2018 research, and A4ANZ, May 2018 Report). In 2018, Alexandre de Juniac of the International Air Transport Association said that there has not yet been an example of privatization that has delivered the promised benefits of greater efficiency for airlines, as well as a better experience for customers that is why ownership is best left in public hands. Lufthansa’s CEO Casten Spohr said that privatization of major airports in Europe was a “big mistake”. The voices of these stakeholders cannot be dismissed.

NAIA earns about P6.5 B a year from passenger service charges, aircraft charges, commercial spaces, porterage and parking fees, among others. But heavy capital investment is required to add at least one more 4 km runaway to the single NAIA runaway to increase air traffic movements per hour which is disquietingly maxed out already at a minuscule 31 ATMPH. Money is also needed for Airport Terminal expansion equipped with 21st century technology.

Firing out the shoddy management of political payback appointees and replacing them with competent individuals who know how to run an airport will not be enough to push up NAIA in its airport ranking in Skytrak. The experiences abroad with the models of ownership, development and management of airports breaks the bewitching spell of privatization. Having a sharp image of NAIA’s position in air, sea, rail and road transport connectivity will help us perceive where private sector participation can come in without jeopardizing the primacy of public service interests.

Atty. Magi Gunigundo is a former lawmaker, civil law instructor, and author of law books. He is also an education reformer and an advocate of anticipatory governance.