Nationalizing Airports Because Of a Bit of Snow?
Well, not a bit of snow actually. Some tens of thousands of travelers were stranded at the London airports because of the poor weather conditions there. No wonder that Britain’s leftist newspaper The Guardian favors renationalization then.
According to The Guardian‘s Neil Clark even before last weeks terrible delays, Britain’s privatized airports, “with their shortage of public seating, their lack of reasonably priced food and drink outlets, and their depressing, unfriendly atmosphere, were an international disgrace.” I never noticed Heathrow had a lack of “public” seats but I do wonder just what constitute “reasonable” food and drink prices according to Mr Clark? Also, could he point to a single government building that has an uplifting, “friendly” atmosphere to it? And is that really what travelers were upset about when they spent the night at the airport?
Airports’ “spectacular failure to adequately deal with recent snowfalls has,” according to Clark “surely exposed to all but the most fanatical free marketeers, the enormous price we pay for having our infrastructure in private ownership.” He reminiscences about the 1960s when state owned terminals had to provide “lots of seating” for the public whereas according to the “commercial attitude” of private airlines today, “every square inch must be turned over to retail space.” Isn’t that despicable?
Unlike its state owned predecessor, the privately owned BAA is seemingly guided by just one concern: maximising profits for its Spanish owned parent company, Ferrovial.
Clark seems startled to find that a private company cares to turn a profit. Indeed, it’s ridiculous, he writes, “to have profit hungry multinational companies running things that really are best left to the public sector.” If that includes airports, what doesn’t it, I wonder?
Public seating aside and disregarding the moral implications of public versus private ownership, there is no doubt that privately owned services always do better than their public counterparts. As Clark so disgustingly points out, private companies care about maximizing profits. That means that they have to offer better products and better service than their competitors else their customers will turn elsewhere. Indeed, people are quite willing to drive an extra mile for an airport that serves cheaper airlines and flights. They aren’t usually so willing to pay extra for comfortable seating though—which is probably why many people fly economy while very few buy a first or business class ticket.
Public ownership by contrast has no competitors. Consequently, it has no reason to innovate, no reason to improve its service, for the people have nowhere else to go. The only reason government has to ensure that its nationalized companies do well is some altruist benevolence maybe or the fear of being voted out of office. History tells us that the profit motive is a far more solid incentive.