Can Fattah's airport plan possibly fly?

The centerpiece of Chaka Fattah's bid for mayor - privatizing Philadelphia International Airport - could conceivably generate hundreds of millions of dollars for the city, but faces enormous obstacles just to become a reality.

Though the move would literally require an act of Congress as well as significant local political support - including support from the unions that represent 1,100 airport employees - Fattah is undeterred.

And although almost all of the 50 airports privatized to date are overseas, and the only similar deal in the United States is now unraveling, Fattah shows only optimism. In fact, he says, he can privatize Philadelphia's airport within his first year of taking office.

"I'm not out to make irresponsible statements or proposals," the seven-term congressman says. "This is not something I've dreamt up."

To skeptics - including all four of his major mayoral rivals in the May 15 primary - Fattah says: "They'll be invited to the signing ceremony."

Privatizing an airport would not necessarily mean lower ticket prices or more flight options. But analysts who have studied the concept say it could yield improved shops and restaurants, and better handling of baggage issues.

Most important to Fattah, it may also free up money he wants to accomplish his real goal: crushing Philadelphia's high poverty rate.

An investment banking firm that Fattah hired last year produced a cost analysis showing that a 50-year airport lease could generate $3 billion. After payments to cover existing airport debt, $1.9 billion in revenue would be left.

If invested at 7 percent, the analysis says, that revenue would yield about $150 million a year - money Fattah would plow into early-childhood education, literacy and after-school programs, and other initiatives.

But at this moment, there's no assurance any of that can happen.

The biggest hurdle: whether Congress approves an expansion of a decade-old pilot privatization program, approval that could happen this spring or fall.

"The idea of leasing the Philadelphia airport is not crazy," said Mo Garfinkle, president of GCW Consulting in Arlington, Va. But anticipating objections from airlines, he said, "I think it will be a real uphill battle."

Congress is considering a plan to amend the pilot program so that 15 airports - up from five - would be allowed leases to private operators that would oversee everything from concession programs to parking to the assignment of airline gates.

The current program allows just one large hub airport to participate, and since Chicago's Midway Airport already received its preliminary approval, Philadelphia for now is locked out.

Fattah also needs congressional approval for something else in the pilot program. Federal law prohibits airport revenues from being used for any non-airport purposes. The pilot program grants an exception, as long as the Federal Aviation Administration - along with 65 percent of an airport's airline carriers - approves.

The proposed legislation would eliminate that so-called "airline veto authority," clearing the way for Fattah to spend the money for educational and social programs.

But winning approval will be no easy feat. The Air Transport Association, which represents most major airlines, objects to the change, said association spokeswoman Victoria Day. So does Southwest Airlines, a major Philadelphia carrier. A call to US Airways, the city's dominant airline, was not returned.

"Without those changes, it would be quite difficult to privatize Philadelphia International Airport, and to do so in a way that produces substantial revenue for the city," said Bob Hazel, a Washington airport consultant who has studied privatization and who is a former US Airways executive.

Mainly because of the provision requiring the consent of 65 percent of carriers for non-airport spending, just one airport went private in the 10-year history of the pilot program. And now Stewart International Airport, in Newburgh, N.Y. is about to go public again; its British owner wants out of the business.

The proposed pilot expansion is just a small piece - one of 88 pages - of complicated and controversial long-term aviation legislation now before Congress.

In fact, say experts monitoring the bill, it's difficult to say now what kind of attention the privatization program will receive.

"It's a sleeper," said Bob Poole of the Reason Foundation, a libertarian think tank.

Fattah acknowledged the uncertainty, saying, "There may come some point in time when an alternative plan is preferable or needed." But he won't discuss that now.

In fact, many experts said that if the pilot expansion passes - with the airline veto eliminated and no restrictions on the number of major airports - Philadelphia's airport would be well-positioned to go private.

For one thing, Chicago's Midway is charting a course Philadelphia can follow. The city has issued a request for proposals, which so far has drawn more than a dozen responses.

"Everyone is watching what Mayor Daley is doing in Chicago. If he pulls it off, that will usher in a new era and Midway will be the model," said Mary Rose Loney, a former Philadelphia aviation director who is also a past aviation commissioner in Chicago.

No matter when a privatizing effort might begin, though, doing it in Fattah's one-year time frame seems doubtful. "It sounds ambitious, aggressive, and a little bit too hasty," Garfinkle said.

Hazel agreed, saying: "These are complex transactions and the history of these transactions is limited, and what little history there is suggests that they take a long time."

Several issues would have to be resolved in a potential lease, such as control of parking facilities, airline gate allocation, and the retention of employees.

Loney and other experts knowledgable about Philadelphia's airport could not point to any major legal hurdle the deal would have to overcome from the state or city.

And Tinicum Township in Delaware County - where 60 percent of the airport physically lies - has yet to pay attention to what privatization would mean for it.

"We've heard about it but haven't talked about it," said Township Manager David Schreiber. He suggested one reason for that: "Is Mr. Fattah right now the front-runner? That's Tom Knox, isn't it?"

To read our coverage of the mayor's race, including a blog, the candidates' stands on the issues, and profiles, go to http://go.philly.com/mayor

EndText