The New Governance of Airports in the U.S.: How Tool Selection Affects Accountability Structures

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1 The New Governance of Airports in the U.S.: How Tool Selection Affects Accountability Structures By: Russell W. Mills Master of Public Administration Program April 2, 2007

2 What do you see in these pictures?

3 Airports are Complex organizations A Series of Partnerships between Public and Private Sectors Vital Piece of Transportation Infrastructure in U.S.

4 Why study airports and airport management? Airports are natural monopolies Increased private sector involvement in management of airports and other transportation infrastructure (Toll roads, Dubai Ports, etc.) Very little literature on accountability (security, ticket prices, etc.) at airports

5 Research Questions In public-private partnerships, how does the selection of system tools at airports affect public accountability? As the amount of private sector involvement at each airport increases, what is the impact on access to information and decision-making processes for citizens?

6 American vs. European Management of Airports European model: private airports, public airlines American model: public airports, private airlines Differences in funding models

7 Current State of American Airport Management 93 of 162 FAA commercial airports use direct government provision 68 of 162 FAA commercial airports use airport authorities One airport is fully run by a private company

8 Why America lacks private airports? Private airlines American funding system History of U.S. Airports Role of airports in local economic development

9 Accountability Challenge of American Airports In such a complex organization, who is accountable to the public? What system tools are most responsive to the wishes of the public? If more private sector involvement is on the horizon, who is going to ensure that the public s voice is heard?

10 Methodology Case Study Approach (Information gathered through interviews, observation, and document analysis 3 Airports Studied (Burlington International, Pittsburgh International, Stewart International (Newburgh, NY) Cases selected based on system tool utilized at each airport

11 Airports Studied Airport Burlington Interna tionalairport Pittsburgh InternationalAirport Stewart Interna tionalairport System Tool Utilized FAA Hub Designation 2005 Enplanements Direct Govern ment Small -hub 690,641 Airport AuthorMedium -hub 5,198,442 Long -termlease Non-hub primary199,741 (National Express

12 Burlington International Airport Publicly owned and operated Many avenues for citizen-participation Several partnerships with private and public sector organizations Our airport is a gem in our community - BTV Official

13 Pittsburgh International Airport Operated by the Allegheny County Airport Authority Retail Contact with BAA, LCC. Limited interactions with citizens and decision makers More latitude to do my job -PIT Employee

14 Stewart International Airport Only privately owned and operated airport in America (National Express s 99-year lease with NY DOT.) Virtually no ability for citizens to impact decision-making at airport We wanted to take the politics out of running the airport - SWF Official

15 Salamon s Tool Framework Tool Vehicle Delivery System Direct Government Direct Provision Public Agency Social Regulation Rule Public agency/regulatee Economic Regulation Entry and rate controls Regulatory commission Contracting Contract and cash payment Business, nonprofit Grant Grant award/cash payment Lower level of government/nonprofit Direct loan Loan Public agency Loan guarantee Loan Commercial Bank Insurance Insurance Policy Public agency Tax expenditure Tax Tax System Fees, charges Tax Tax system Liability law Tort Law Court System Government Operations Direct provision/loan Quasi-public agency Vouchers Consumer subsidy Public agency/consumer

16 System vs. Service Tools System tools: structure management of airport, more politically charged, impact service tool selection Examples: Direct government, government corporation, long-term lease Service tools: provide specific service, agreements are usually not political in nature Examples: Retail contracts, airline service contract, parking contract

17 Tool Attributes: Directness and Visibility Directness: The extent to which the entity authorizing, financing, or inaugurating a public activity is involved in carrying it out. A direct tool is one in which authorization, funding, and execution are all carried out by essentially the same entity (Salamon 2002 p. 29). Visibility: The extent to which the resources devoted to a tool show up in the normal government budgeting and policy review process (Salamon 2002 p. 32).

18 Romzek and Dubnick s Accountability Structure Source of Agency Control Level of Control over agency actions Internal External High Bureaucratic Legal Low Professional Political

19 Analysis of System Tools and Accountability Structures Modeled from accountability frameworks from Romzek and Dubnick and deleon Evaluating 5 types of accountability: consumerism, professional, political, bureaucratic, and legal Importance of political accountability: The Democratic Anchorage

20 International Airport (Dir Government) Consumerism Substitute airports are rela t ively f ar away. e ct Legal City of Burl ington ru l es and regul a tions; FAA security and audit procedures for AIP funds Polit i cal Mayoral appoint m ent of director of avia t ion; rela t ionship with appoin t ed airport commission; monthly mee t ings open to public Professional Contracts with various priva t e firms for expertise in prov iding services Membership in AAAE Bureaucratic Reporting protocol between director of avia t ion, City Council and Pittsburgh International Airport (Airport Authority) Substitute a irports are non - exis t ent in area. Allegheny County legal codes; FAA security and audit procedures for AIP funds Appointment of ACAA board members by cou chief e x ecu t iv e ; monthly m ee t ings open to publ i c n ty Reta i l ma n age m ent contra c t with BAA; relia n ce on JD Power for performan c e measures; Membership in AAAE Lim i ted, only r eal bureauc r at i c inter a ction p ayroll and human resources. Stewa rt International Airport (Long - term lease) Only major accoun t abi l ity structure t h at af f e c ts SWF, other New York airports are close FAA security and audit pro c edures for AIP funds. None Membership in AAAE None

21 Conclusions Airports in the United States tend to utilize more direct and visible system tools As private sector involvement in airports increased, the amount of visibility and directness decreased As the amount of private sector involvement increased, the amount of political accountability (the democratic anchorage) decreased

22 Questions and Comments? Next time you fly, look at the airport as a network of actors. If you have a bad experience, think about what avenues you have to make suggestions for change: Airlines?, Airport?, City/County?

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