5 ms·

Are airports supposed to be profitable, or are they there to provide a service? Should airports that are not profitable be shut down? Does the public good facto

Are airports supposed to be profitable, or are they there to provide a service? Should airports that are not profitable be shut down? Does the public good factor into that decision? Sorry for offtopic, but I (evidently) got triggered by the inclusion of the word 'unprofitable' in your reply

leetcrew 3y ago
I can see the value in operating airports at a loss in truly remote areas. sometimes it's the only way to maintain connectivity to the rest of the world. for example there are communities in alaska that are literally not connected to the contiguous US by road or train. but otherwise yes? I don't think airports like IAD should run at a loss. they are very expensive to operate and primarily serve commercial airlines. the gate fees and retail rents should absolutely offset that, and if they don't, the airport should be closed.
- jacobr1 3y ago
  > should absolutely offset that, and if they don't, the airport should be closed. Or restructured to be profitable. IAD is a good example of where there is clearly enough demand and example of similar scale airports being run effectively. So if they are running at big losses (no idea, not something I've researched) then that to me implies bad management (or poor political constraints) rather a fundamental business model problem.
hajile 3y ago
No. If they add enough value to justify their existence, shouldn't they also turn a profit? In all other cases, you are just taxing people who don't benefit from those airports to subsidize the few people who do benefit.
- dragonwriter 3y ago
  > If they add enough value to justify their existence, shouldn't they also turn a profit? Only if you assume the nonexistence of (or perfect ability to internalize through regulation) externalities (specifically, here, positive externalities.)
  - leetcrew 3y ago
    why would you assume there are positive externalities though? large airports overwhelmingly serve for-profit airlines and freight carriers. I'd argue a lot of this activity should really be moved to rail. but either way, it seems that the businesses involved should cover the cost to operate. smaller airports are mostly used by hobbyists. while cool, this is not a particularly accessible hobby, and I don't feel it is worth subsidizing. the only exceptions I can think of are airfields in remote communities (Alaska, islands, etc), and strategic locations that are desirable to the military.
    - dllthomas 3y ago
      The fact that it's made it through a somewhat democratic process is plenty of reason to assume positive externalities in the very weak sense of noticing that you should be looking for them. Relying on the assumption for more than that would be silly, of course.
    - troyvit 3y ago
      Firefighting. Also many municipal airports serve as a beacon to help folks flying at night to get around.[1] [1] https://en.wikipedia.org/wiki/Aerodrome_beacon https://en.wikipedia.org/wiki/Aerodrome_beacon
- unethical_ban 3y ago
  No. Service to society is not always a money maker. Value does not imply profit. Now, not every unprofitable service is worthy of government funding.
  - dahfizz 3y ago
    What is an example of a service which provides a lot of value but is not/ could not be profitable? There are public services we choose to run at a loss, like the postal service or public transit. These services definitely could raise their prices in order to turn a profit (they provide enough value that people would still pay the higher prices). We choose to run them at a loss as a sort of wealth redistribution program, where the taxes from the rich subsidize the cost of these services for the poor.
    - skyyler 3y ago
      If I'm ever convicted of a crime, I sure hope the courtroom where my trial takes place isn't considered to be "profitable".
    - unethical_ban 3y ago
      If we ran the post office or certain public transit at a profit, they wouldn't be the services they are today. You admit this. Post office wouldn't run daily service 6 days a week. They wouldn't run last mile to millions of people. Public transit wouldn't serve unprofitable communities. So no, they couldn't operate the same way. Hand-waving that away because it is wealth redistribution is invalid. Profit is not a prerequisite of value. Profit should not be the driving force of every mechanism in society. Caveat, not every public service which costs money is able to cost too much. Rejecting the profit motive is not equal to rejecting a bounded budget for programs.
    - wongarsu 3y ago
      Running public services "at a loss" (= tax funded) is the entire premise of a government. Some as wealth redistribution schemes, but most of them because society as a whole is better off if we do so. If we only put out fires if the property owner has paid their fire fighting fees the fire might uncontrollably spread to other properties, so we are better off just having a public fire fighting service. Every trucking company paying for their own armed escorts is much more expensive than taxes financing a police force that ensures safe travel. Transportation infrastructure, no matter if that's streets, subways or airports, promotes trade and efficient resource use by allowing people and resources to get to places more easily.
- p1necone 3y ago
  Transport adds value by allowing people and goods to move around with less friction. That value is realized by second/third/fourth order effects (bigger labour force available to businesses, money travelling around a wider network causing more price efficiency, improvements in production of goods in one area more effectively being utilized in other areas, all of these things resulting in more tax dollars as well etc etc etc). These benefits are incredibly hard to quantify and likely don't even really directly/immediately affect the people using the transport. If the airport increased prices to try to capture that value in profit they would just be adding that friction back into the system and the benefits would disappear again.
dahfizz 3y ago
Municipal airports are nothing like the large international airports you may be thinking of. Municipal airports have like two runways and are only used by tiny private planes, not commercial airliners. The only effect on the "public good" is to serve a handful of rich hobbyist. And potentially as national defense infrastructure, which I guess is why the feds fund them.
- troyvit 3y ago
  In Colorado municipal airports serve more "public good" purposes. One purpose is for less rich (but still pretty rich) people to go skydiving. Another is to stage aircraft for fire fighting in places that are closer to the fires. That last one is important, not just for saving the houses of the rich people who build mansions in fire zones, but also to help save whole towns.

leetcrew 3y ago

I can see the value in operating airports at a loss in truly remote areas. sometimes it's the only way to maintain connectivity to the rest of the world. for example there are communities in alaska that are literally not connected to the contiguous US by road or train. but otherwise yes? I don't think airports like IAD should run at a loss. they are very expensive to operate and primarily serve commercial airlines. the gate fees and retail rents should absolutely offset that, and if they don't, the airport should be closed.

jacobr1 3y ago
> should absolutely offset that, and if they don't, the airport should be closed. Or restructured to be profitable. IAD is a good example of where there is clearly enough demand and example of similar scale airports being run effectively. So if they are running at big losses (no idea, not something I've researched) then that to me implies bad management (or poor political constraints) rather a fundamental business model problem.

hajile 3y ago

No. If they add enough value to justify their existence, shouldn't they also turn a profit? In all other cases, you are just taxing people who don't benefit from those airports to subsidize the few people who do benefit.

dragonwriter 3y ago
> If they add enough value to justify their existence, shouldn't they also turn a profit? Only if you assume the nonexistence of (or perfect ability to internalize through regulation) externalities (specifically, here, positive externalities.)
- leetcrew 3y ago
  why would you assume there are positive externalities though? large airports overwhelmingly serve for-profit airlines and freight carriers. I'd argue a lot of this activity should really be moved to rail. but either way, it seems that the businesses involved should cover the cost to operate. smaller airports are mostly used by hobbyists. while cool, this is not a particularly accessible hobby, and I don't feel it is worth subsidizing. the only exceptions I can think of are airfields in remote communities (Alaska, islands, etc), and strategic locations that are desirable to the military.
  - dllthomas 3y ago
    The fact that it's made it through a somewhat democratic process is plenty of reason to assume positive externalities in the very weak sense of noticing that you should be looking for them. Relying on the assumption for more than that would be silly, of course.
  - troyvit 3y ago
    Firefighting. Also many municipal airports serve as a beacon to help folks flying at night to get around.[1] [1] https://en.wikipedia.org/wiki/Aerodrome_beacon https://en.wikipedia.org/wiki/Aerodrome_beacon
unethical_ban 3y ago
No. Service to society is not always a money maker. Value does not imply profit. Now, not every unprofitable service is worthy of government funding.
- dahfizz 3y ago
  What is an example of a service which provides a lot of value but is not/ could not be profitable? There are public services we choose to run at a loss, like the postal service or public transit. These services definitely could raise their prices in order to turn a profit (they provide enough value that people would still pay the higher prices). We choose to run them at a loss as a sort of wealth redistribution program, where the taxes from the rich subsidize the cost of these services for the poor.
  - skyyler 3y ago
    If I'm ever convicted of a crime, I sure hope the courtroom where my trial takes place isn't considered to be "profitable".
  - unethical_ban 3y ago
    If we ran the post office or certain public transit at a profit, they wouldn't be the services they are today. You admit this. Post office wouldn't run daily service 6 days a week. They wouldn't run last mile to millions of people. Public transit wouldn't serve unprofitable communities. So no, they couldn't operate the same way. Hand-waving that away because it is wealth redistribution is invalid. Profit is not a prerequisite of value. Profit should not be the driving force of every mechanism in society. Caveat, not every public service which costs money is able to cost too much. Rejecting the profit motive is not equal to rejecting a bounded budget for programs.
  - wongarsu 3y ago
    Running public services "at a loss" (= tax funded) is the entire premise of a government. Some as wealth redistribution schemes, but most of them because society as a whole is better off if we do so. If we only put out fires if the property owner has paid their fire fighting fees the fire might uncontrollably spread to other properties, so we are better off just having a public fire fighting service. Every trucking company paying for their own armed escorts is much more expensive than taxes financing a police force that ensures safe travel. Transportation infrastructure, no matter if that's streets, subways or airports, promotes trade and efficient resource use by allowing people and resources to get to places more easily.
p1necone 3y ago
Transport adds value by allowing people and goods to move around with less friction. That value is realized by second/third/fourth order effects (bigger labour force available to businesses, money travelling around a wider network causing more price efficiency, improvements in production of goods in one area more effectively being utilized in other areas, all of these things resulting in more tax dollars as well etc etc etc). These benefits are incredibly hard to quantify and likely don't even really directly/immediately affect the people using the transport. If the airport increased prices to try to capture that value in profit they would just be adding that friction back into the system and the benefits would disappear again.

dahfizz 3y ago

Municipal airports are nothing like the large international airports you may be thinking of. Municipal airports have like two runways and are only used by tiny private planes, not commercial airliners. The only effect on the "public good" is to serve a handful of rich hobbyist. And potentially as national defense infrastructure, which I guess is why the feds fund them.

troyvit 3y ago
In Colorado municipal airports serve more "public good" purposes. One purpose is for less rich (but still pretty rich) people to go skydiving. Another is to stage aircraft for fire fighting in places that are closer to the fires. That last one is important, not just for saving the houses of the rich people who build mansions in fire zones, but also to help save whole towns.