Alabama airports could turn to public private partnerships under bill

Alabama airports would be able to enter into public-private partnerships under a bill that advanced through the state House this week.

House Bill 87 passed the House Tuesday less than three weeks since it was introduced by Republican state Rep. Chip Brown. It is now pending at the Senate Transportation and Energy Committee.

“Alabama is near the bottom on our spending in airports,” said Brown Tuesday during a debate on the bill. “This bill is aimed at providing more economic opportunity for our cash-strapped airports so they can provide better service.”

There are 96 airports in Alabama, Brown said, and all of them support the bill. The final vote was 98 to 2 with one lawmaker abstaining.

After ending a troubled P3 to revamp of its Great Hall in the Jeppesen Terminal, Denver International Airport made termination payments totaling $183.6 million. 

Denver International Airport

The bill is broadly written and would allow the state’s airport authorities to enter into “any necessary legal business entity or venture relating to airport operations and conduct any activities required for the operation of the authority.” If passed by the Senate and signed by Republican Gov. Kay Ivey, who is considered a P3 supporter, it would take effect in October.

U.S. airports rely almost entirely on tax-exempt bonds and federal money to finance capital improvements but have increasingly turned to P3s for specific infrastructure projects though fully privatized airports remain rare in the U.S.

The federal Airport Investment Partnership Program allows airports to explore privatization as a way to generate private capital though experts say it has generated less interest than expected. Major terminal projects at John F. Kennedy International Airport and LaGuardia have led the way in the space. Most recently, the U.S. Virgin Islands is crafting a long-term design-build-operate-finance-maintain lease for both of its airports.

Not all the agreements work out. In June 2022, the Gary Chicago International Airport dissolved its P3 eight years into what was to be a 40-year agreement. The Denver International Airport in 2019 dropped a two-year-old P3 in favor of a traditional general contractor approach.

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