UK regional airport commercialisation and privatisation: 25 years on Stephen Ison a,⇑ , Graham Francis a,1 , Ian Humphreys a,2 , Richard Page b,3 a Transport Studies Group, School of Civil and Building Engineering, Loughborough University, Loughborough, Leicestershire LE11 3TU, UK b Halcrow Group Limited, Elms House, 43 Brook Green, Hammersmith, London W6 7EF, UK article info Keywords: Airports Commercialisation Privatisation Regulation abstract It has been 25 years since the UK was the first country to begin the process of commercialising and pri- vatising its airports. The purpose of this paper is to revisit the UK Government’s stated aims with respect to commercialisation and privatisation, namely to ‘‘encourage enterprise and efficiency in the operation of major airports ... [and that] ... air transport facilities should not in general be subsidised by the tax- payer ... [and they] should normally operate as commercial undertakings.’’ The authors of this paper con- sider the success of commercialisation and privatisation against these aims with respect to the 16 UK regional airports commercialised by the 1986 Airports Act part II. In addition, this paper considers the policy ramifications that have eventuated. The authors argue that many of the benefits may have been achievable by commercialisation alone. Ó 2011 Elsevier Ltd. All rights reserved. 1. Introduction The UK was the first country to embark on a path of full airport privatisation with the introduction of the 1986 Airports Act. Prior to this, UK airports had depended on subsidies from the UK tax payer to local and central government. Up until the mid 1980s airports were regarded as public utilities to be owned and subsidised by Gov- ernment. Since then there has been a significant shift in many coun- tries towards airports becoming financially self sufficient entities, run on a commercial basis and funded fully or partly by the private sector. To date over 80 countries have introduced some form of pri- vate ownership to their airports and a number of other countries are considering the possibilities. This paper makes a distinct contribution to the literature on air- port commercialisation and privatisation. Firstly it seeks to measure the outcomes of UK commercialisation and privatisation against the stated policy objectives set by the Government (Graham, in press). Secondly, although work on UK airport privatisation has been under- taken, (Humphreys, 1999; Francis and Humphreys, 2001; Humph- reys et al., 2007; Graham, 2008) an updated review of progress in the UK is valuable given the dynamic changes in ownership that have taken place and are continuing to take place. Thirdly, the UK offers the longest case of the implications of airport commercialisation and privatisation since it was one of the first countries to do so. The associated findings therefore offer an unparalleled example of the issues for management, policy makers and planners related to commercialisation and privatisation. Finally, in taking the UK case for regional airports this paper considers the impact of the policy of commercialisation for airports of varying sizes and ownership structures within the same National context, not covered by previ- ous studies that have mainly focussed on specific airport case studies or the airports owned by the BAA (Parker, 1999; Francis and Humph- reys, 2001). For the UK case the policy objectives for airports in relation to a transformation of the basis upon which airports were operated were set in the 1985 UK Government White Paper as follows:  To encourage enterprise and efficiency in the operation of major airports by providing for the introduction of private capital.  Air transport facilities should not in general be subsidised by the taxpayer or the rate payer. Airports, whoever their owners should normally operate as commercial undertakings. Source: Department of Transport Airports Policy White Paper, 1985, Cm 9542, p. 5. This paper has three aims. Firstly, to consider the extent to which the above Government policy objectives for airports have been rea- lised, secondly, to review the changing pattern of UK regional airport ownership structures with reference to the 1986 Airports Act part II and thirdly, to examine the implications for airport policy and planning. 2. UK airport ownership policy The UK Government transferred the ownership of the British Airports Authority from the Government to the private sector on the first of April 1987. This meant that seven airports responsible for over 65% of UK airport passenger traffic and including 0966-6923/$ - see front matter Ó 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.jtrangeo.2011.06.005 ⇑ Corresponding author. Tel.: +44 1509 222605; fax: +44 1509 223981. E-mail addresses: S.G.Ison@lboro.ac.uk (S. Ison), pageri@halcrow.com (R. Page). 1 Freelance author. 2 Formerly Senior Lecturer in Air Transport at Loughborough University. 3 Tel.: +44 (0)20 3479 8247; fax: +44 (0)20 3479 8001. Journal of Transport Geography 19 (2011) 1341–1349 Contents lists available at ScienceDirect Journal of Transport Geography journal homepage: www.elsevier.com/locate/jtrangeo