Government greenlights New Orleans Airport privatisation

The Federal Aviation Administration has approved the New Orleans Aviation Board’s preliminary application to privatise Louis Armstrong New Orleans International Airport, meaning a competitive bidding process for the lease can now begin.

The US Federal Aviation Administration (FAA) has approved the New Orleans Aviation Board’s application to privatise Louis Armstrong New Orleans International Airport.

The approval means the airport’s board can now commence a competitive bidding process, and the airport said in its privatisation application that it intends to issue a request for qualifications on 2 November. The procuring authority will then issue a request for bids from shortlisted candidates in the Spring of 2010 before selecting a preferred partner by the fall of that year, according to the statement.

The approval of the application comes almost five months after Chicago ended a similar privatisation process it had been undertaking for Midway Airport. The process fell apart after a Citi Infrastructure Investors-led consortium could not raise the financing necessary to make the $2.5 billion upfront payment it had offered in return for a 99-year contract to operate the airport and collect its revenues.

Had the transaction reached financial close, it would have marked the largest-ever long-term lease of an airport in US history. It was only the second airport to take one of the five spots in the FAA’s pilot privatisation programme. Another airport, New York’s Stewart International on Long Island, was leased in 2000 but bought back by the state six years later.

However, the FAA indicated in a statement announcing New Orleans' application acceptance that Chicago's privatisation process is still ongoing. “The city of Chicago is in the process of selecting a private operator for Midway Airport”, the statement said.

New Orleans International Airport filed its privatisation application with the FAA on 5 August. The airport, currently owned and operated by the City of New Orleans, had about 3.8 million passenger boardings in 2008 and 131,197 aircraft operations, according to FAA data. Nine airlines provide scheduled passenger service to the airport, including Southwest, Continental, American, Delta, United, US Airways, AirTran, JetBlue, and Northwest.

The New Orleans Aviation Board, the City Council and the Mayor of New Orleans must all approve the final concession agreement with the winning bidder. After the completion of the bidding process, the airport will be required to submit a final application for privatisation to the FAA.

Cezary Podkul contributed reporting to this article.