INDEPENDENCE Gr: IANA Issue Paper 4-89 April 13, 1989 ~ Look To Business, Not Government, For A Better Airport by Frank Vorhies, Ph.D. University of Colorado INDEPENDENCE INSTITUTE 14142 DENVER WEST PARKWAY, SUITE 185 GOLDEN, COLORADO 80401 (303) 279-6536 FAX (303) 279-4176 Note: The Independence Issue Papers are published for educational purposes only, and the authors speak for themselves. Nothing written here is to be construed as necessarily representing the views of the Independence Institute, or as an. attempt to influence any election or legislative action.4-89 April 13, 1989 LOOK TO BUSINESS, NOT GOVERNMENT, FOR A BETTER DENVER AIRPORT Why the Private Sector Can Best Decide Stapleton’s Future By Frank Vorhies, Ph.D. University of Colorado INTRODUCTION: THE EDITORS A world political heavyweight is being pulled into the fight over Denver's airport. It's British Prime Minister Nargaret Thatcher, whose experience is cited by economist Frank Vorhies to re- mind Colorado that we actually have a third option for airport policy, more productive than either of the two approaches everyone is arguing about. Governor Roy Romer and Denver Mayor Federico Pena are the chief spokesmen for spending billions of dollars on a huge new international airport in Adams County. Democrat Dick Young and Repub- lican Bill Chenoweth lead the suddenly Powerful opposition that wants to save Stapleton and has forced the issue to an election on May 16. The attractive ney angle Maggie Thatcher represents is privatization, the owner- ship and operation of airports by business rather than government. Her government sold both London airports, Heathrow and Gatwick, and several other big ones in the U.K. to private in- vestors for $2 billion in 1987. The success of that policy, according to Vorhies, matches other privatization experiences from many countries showing that when a large operation like Staple- ton is returned to the market economy, government revenues increase, risk to the taxpayer decreases, and the opera- tion itself becomes more efficient and more customer-responsive. (Continued on Page 2) TABLE OF CONTENTS What is Privatization? ...... Breaking Government Monopolies . . Letting Markets Regulate. ..... Why Privatize the Airport?..... Increase Government Revenue. . . «+ Sharpen Operating Efficiency... . Spread Share-Owner Democracy ...- Insulate Management from Politics. « Serve Consumers Better... ... Not a Natural Monopoly»... ee ee Three Steps to Privatize Stapleton . Obstacles and Answers... ++ see Conclusion: Much to Gains +... Vorhies References... s+... Appendix One: Experiment in Britain Appendix Two: Potential in Detroit. © © @ calli ee} .u7 oa