Maryland could generate $2.3 billion by leasing Baltimore/Washington International Thurgood Marshall Airport, giving the state money for other needed infrastructure projects, according to a new Reason Foundation study of U.S. airports. Based on data from previous airport sales and long-term leases around the world, the Reason Foundation report shows BWI Marshall Airport could be worth between $1.6 billion and $2.3 billion if long-term leased to a private airport company and investors. Due to airport projects still being paid for, the airport has $642 million in debt. After paying off this debt as federal law requires, the state could net $1.6 billion from a long-term lease of BWI Marshall Airport.
The study notes Maryland could put that money towards modernizing existing infrastructure such as aging roads and bridges, funding new projects in its long-range transportation plans, or paying down existing debt.
“Many of the world’s best airports are already managed by private companies under similar arrangements, including London’s Heathrow and Gatwick, Athens, Copenhagen, Paris, Rome, and Sydney.” said Robert Poole, author of the report and director of transportation at Reason Foundation. “The long-term lease would be a public-private partnership that would completely protect Maryland’s taxpayers and air travelers by setting specific customer service and performance benchmarks that must be met by the private partner. It would also lay out specific maintenance, upgrades and other investments the company would have to make throughout the lease.”
In July 2021, an unsolicited $17 billion offer to buy Sydney International Airport, Australia’s largest airport, was made by a group of infrastructure investors. Despite the airport’s traffic still being a fraction of its pre-COVID-19 levels, the offer was 26 times the standard multiple of Sydney’s pre-pandemic cash flow. The Reason Foundation study used a 20-times multiple in its “high” value calculations for U.S. airports like BWI. The news from Australia suggests that infrastructure investors value airports for their long-term prospects, and that Maryland could get the high-end value—$2.3 billion—in the Reason study or perhaps even more.
The Reason Foundation report analyzed 31 large and medium U.S. airports, finding Los Angeles International Airport could be worth over $17 billion; San Francisco International and Dallas-Fort Worth International Airport could each be worth more than $11 billion; and Chicago O’Hare International Airport could be worth more than $10 billion.
The full report— “Should Governments Lease Their Airports?”— is available here. The full PDF is here. And answers to frequently asked questions about airport leases and public-private partnerships are here.
