More on the Benefits of Building an Airport Without Government Money

(MoneyWatch)  Yesterday, I wrote about the efforts in Branson to build the first commercial airport in the US that won't take government money. This is an exciting prospect, because it could end up being an alternative model for airport development going forward. We'll need to see how things go when this opens, but foregoing government money does allow for a lot of creative moves.

When airports take federal funds, they're bound to operate in a certain way. I'm not talking about safety and security - those rules would apply regardless of who pays for the airport. But airports that take federal funds can only charge airlines for construction projects once they're complete, and all airport profits have to be reinvested back into the airport. There also has to be equal access for all carriers. Not taking funds opens up a variety of new possibilities.

First of all, Branson has indicated that it will set its usage charges with a flat $7 fee per enplanement. There's no justification for the cost required or anything like that. They can set their rates. Of course, since they set their rates, they can alter them as much as they like. If there's one airline that they really want to get to fly to the airport, they can charge them a different rate than they would charge another airline.

Another interesting option is the ability to offer exclusivity. Let's say one airline wants to fly to Branson from Denver. The airport has the ability to promise them exclusivity on that route so that nobody else can compete. The problem here? The monopoly would clearly encourage higher fares, though Branson insists that it has a clause in its contracts that requires charging reasonable rates. Don't ask me how that's determined, but it's likely to look at market averages.

Airlines will likely cry foul if a popular location started to play favorites, and that's why we'll never see anything like this running a single airport in a major area. But if someone wants to construct a secondary airport in a major market (Atlanta, anyone?), it could provide an interesting alternative.