Why US Airports Are So Bad

Why US Airports Are So Bad

Singapore’s Changi Airport is considered by
many travelers to be the best in the world.
Have a long layover? Stop by the butterfly garden or catch
a Disney film at the airports movie theater. In Qatar’s Hamad Airport
for a few hours? For about 50 bucks, travelers can swim laps in a 25
meter indoor swimming pool or workout in a fully equipped gym. Traveling during Christmas? Each year Munich’s airport puts
a pop-up holiday market, complete with an ice skating rink, a
microbrewery and 450 real Christmas trees. And then, there’s LaGuardia
Airport in New York City. The 1950’s and 60’s have often been
described as the Golden Age of flying. Traveling by air meant three
piece suits for men, high heels for women, lavish meals and
lots of leg room. Today, at U.S. airports, passengers are
forced to wait in long security lanes and then line up
for fast food, before boarding overcrowded airplanes with
no free meals. So why are U.S. airports so
cash strapped compared to their international counterparts? Airports in the U.S. started to
take shape in the early 1920’s. At the time, passenger service
was virtually nonexistent and airlines were flying mostly mail. While a few airfields were
built before World War I, airport construction really began in the
United States when the post office began to experiment with
carrying the mail by air, they needed places to land. During the Great Depression with
big improvements in technology, passenger service suddenly
took off. In 1930, America’s airlines
carried about 6,000 travelers. By 1938, that number soared to 1.2 million. Flying was loud, cold and
only business travelers or the wealthy could afford it. Most of
the passengers during the 1930’s were business people and they
understood that time is money. As aviation grew, as new airplanes
came in, they understood that this could move them faster, but
also could move financial instruments faster. By 1940, modern
airports started to evolve. Planes got bigger, grass gave way
to pavement and terminal buildings grew, from simple structures that were
small and dingy, to art deco buildings designed by architects. With massive amounts
of public financing, America was well into the jet age. By 2019, thanks in large part
to government cash, the U.S. has more than 19,000 airports. For the most part,
airports in the U.S. are publicly owned and operated by either
a city, a county, a state or in some cases
a public authority. There are thousands of airports, big
and small, but about 500 are consider public use
commercial airports. In its latest ranking of the
most profitable airports in the U.S., the American City Business Journal’s said,
the top five airports by revenue were JFK, Newark, San
Francisco, Los Angeles and Miami. Every airport has its own model
for how it brings in cash. Revenue is also dependent on a whole
lot of factors outside of an airport’s control, including airline
routes, passenger flows, plus local and
international regulations. But generally speaking, airport
income in the U.S. can be boiled down to
three categories: aeronautical operating revenue, non-aeronautical operating
revenue and non-operating revenue. That first category pulls
in the most cash. Airports in the U.S. make most
of their money from the airlines. And that revenue is everything from
landing fees to terminal rents to fuel sales. In 2016, the most recent year,
the FAA made this data publicly available, U.S. airports collected revenue of $11.3 billion dollars from the airlines,
including landing fees of $3.7 billion dollars, terminal rents of $5
billion dollars and cargo and hangar rentals of
$661 million dollars. Because they are government owned
and receive taxpayer subsidies, airports try to keep costs low. Airport revenue streams are really
based historically on minimizing costs for the airlines. And that kind
of harkens back to the pre-1978 days when the airlines
were regulated by government. As a result, the airports are run
in this kind of cost recovery framework where they collect
revenues from various sources. Non-aeronautical revenue brought in 35
percent of all income for airports across the U.S. For many airports, the biggest
non-airline revenue is from parking. In 2016, U.S. airports collected $5.8 billion dollars from parking
and rental cars. Parking is a big way
that airports can earn money. And so you can see why some
airports might be a little reluctant to have, say, mass transit, because if
people are coming out there on mass transit, they aren’t
parking their cars. We’re in an unsettled period in terms
of how people are going to choose to access the airport. Ride sharing has been
growing very fast. There is a debate
about autonomous vehicles. Food and beverage operations is another
big source of income pulling in $1.5 billion dollars across
all airports in 2016. And then there’s non-operating revenue,
which includes grants from the government and interest earned
on surplus cash when airports invest in things like bonds. The biggest source of income within
this category is the passenger facility charge, that goes to the
upkeep and maintenance of the airport. It accounted for 48
percent of all non-operating revenue. U.S. airports, particularly smaller ones,
also rely heavily on funding from the government. In 2018, the Airport Improvement Program
gave out over $3 billion to more than 1,600 airports. The Airport Improvement Program supports
the runways, taxiways and overall quality and
health of airfields. Despite America’s capitalist driven
economy, it’s actually Europe that has taken the lead
on privatizing its airports. In the 1980’s and 90’s, deregulation
and an increase in demand for air travel, along with a scarcity
of public funds, forced many airports worldwide to seek out
some form of privatization. Starting with the UK airports in
the mid-1980’s, privatization is now widespread across Europe. In 2018, more than 50 percent of
European airports had some form of private ownership. Many of the European
airports are run by private entities that are looking to maximize
shareholder return and gain a profit. In the United States
there is no profit motive. The European airports have found better
ways to extract higher dollar amounts from their passengers. In 1996, Congress created the
Airport Privatization Pilot Program, allowing for experimentation with
public-private partnerships at a limited number of airports. But it wasn’t until the
mid-2010’s that privatization really started to gain momentum in the U.S. In the face of decaying
infrastructure, a handful of U.S. airports have started to abandon the
public model and turned to private money to fund
billion dollar projects. Just take LaGuardia. In numerous
customer surveys, LaGuardia Airport has consistently ranked the
worst in the U.S. In 2018, 28 percent of LaGuardia
flights were delayed, placing its second to last in the
ranking of America’s largest airports, according to the
Department of Transportation. Laguardia Airport was very crowded,
it had low ceilings, the furniture was very tired. After 9-11 where you had to put
in all these security lines, you would have lines everywhere. In 2016, New York State and
the Port Authority partnered with Delta Airlines and LaGuardia Gateway Partners
to completely rebuild the airport. The airport is now
getting an $8 billion overhaul. The public-private partnership model has become
more of a trend at airports around the world, according
to the World Bank. Public-private partnerships are a very,
very important part of the planning, I would say
at most airports. The government has limited funds. LaGuardia Gateway Partners, the group
that will finance, construct and operate Terminal B, said
the redevelopment, expected to be finished by 2022, will provide a
host of new services to passengers, including restaurants like Shake Shack, La
Chula and stores like FAO Schwartz. We’ve introduced the shops,
the amenities, larger hold rooms, higher ceilings, lots
of natural light. Behind me is a
park area with trees. There are many things that private
enterprise does much better than public agencies. And one of them, we believe,
is actually operate both the commercial and the operational side
of an airport. And more airports across the U.S. are also on the way to
getting massive multi-billion dollar makeovers thanks to cash
from private companies. New York’s JFK Airport is planning
to spend $13 billion, including $12 billion in private funding
for improvements including two new international terminals. Los Angeles Airport is spending $14
billion on a giant expansion. LAX Integrated Express Solutions was
selected to design, build and operate the terminals
passenger train. The Automated People Mover is
LAX’s first public-private partnership project. Since 2000, U.S. airports have had to withstand a
number of critical events that have had a major impact
on their bottom line. Following the September 11th attacks, for
the first time since World War II, the number of airline
passengers declined for two consecutive years. Additional security at U.S. airports has placed an even
greater burden on airport operations. This puts a lot of
capital requirements onto the airports. So they had to take on a lot
of debt, in order to reconfigure their terminals. The financial crisis that started
in 2007 was another blow to airports. In 2008, air passenger
traffic dropped again at airports around the country. What I think was
a larger impact was the slow recovery following the
Great Recession. In historical recessions there’s been a
pretty quick bump back in terms of passenger traffic increasing
once the recession was over. Here, we saw a multi-year period of
a malaise with low growth in the 1 to 2 percent or less than
1 percent and that really started to challenge airport finances. Another factor, dragging down profit
margins for some of the country’s medium to
smaller size airports. There are fewer airlines flying today
than there were in 2009. In the 10 years to 2018,
the airline industry has experienced multiple mergers and acquisitions. In 2008, Northwest Airlines
merged with Delta Airlines. In 2010, Continental Airlines
merged with United Airlines. And in 2013, U.S. Airways and American Airlines
parent AMR merged. That was good news for a few
larger hub airports, but many smaller airports were forced to deal
with the economic fallout. A hub airport has a large
number of connecting flights from one dominating airline. The mergers that have been happening and
the shrinkage from 10 or 12 major airlines in this country
down to what, three, four? That’s been a huge challenge. Airports can really grow, look
at Atlanta, Chicago, Dallas. Those that have maintained hubs,
they’re dealing with growth. Airports that had been hubs, they’ve
had to deal with decline. According to Airports Council
International, industry consolidation had a big impact on
several regional airports, including Pittsburgh, St. Lewis, Cincinnati,
Memphis and Cleveland. If part of a business is severed and
you have a lack of cash flow, that money is not flowing into
an airport, you’re going to suffer. That means restaurants closed down. That means employees get laid off. That means revenue is not
coming into that airport. While flying is generally cheaper and
safer than it’s ever been. An increase in travelers will
put massive pressure on existing airport infrastructure. U.S. airlines and foreign
airlines serving the U.S. carried about a billion passengers in
2018, up 5 percent from the previous year, according to
the Bureau of Transportation. Millions of people go through
LaGuardia, just for everyday maintenance and wear and tear, to keep
the floors clean, to keep the lights on, that takes
a lot of money. And U.S. airports are getting
older, according to the Airports Council International. They say airports will need
over $100 billion in infrastructure spending over the next five years. A useful time period for an airport
to exist is between 25 and 30 years before it
becomes non-competitive. Right now, the average age of a
terminal in the United States is a little over 40 years, so we’re
way beyond the international number. While airports in the U.S. have shown signs of improvement
in recent years, additional passengers, tightening budgets and
growing competition will force cash strapped airports to seek out
new sources of financing to compete on the world stage.


  • Leonardo Rivera

    Obama and the deep state were selling out USA. The inside note was; don't invest in USA, we will soon move to China. Trump will soon fix that. Give him a second term. God bless trump.


    We spend so much money on the military and foreign aid to these other countries than we do on our own development projects and infrastructure! Smh

  • Marky Mark

    Airports need to keep flights cheap, add in more things to make money like a place to take a nap a few hours, to shower, massages, movie theaters, better food options, entertainment, etc.

  • Jon W

    Like all things run by the government, they are run horibly. They need to privatize all airports and airport security. One thing you didn't mention about that slow down was that Obama had seized power. His high taxes, out of control spending, moronic regulations and raising the national debt by 10 Trillion dollars caused a slow down in growth, business expansion and NUMEROUS other things which carried over to air travel too.


    What a bunch of bulshit…. The government should not be funding airports if their aim is profit. What a bunch of nonsense that they have to compete globally with other airports if you're Landing in Florida there's only one airport to land why do we compete with Paris or Spain airport that's not your destination.

  • Nomis

    Thats what happen when you are stubborn and think you are the best in the world you only compare with yourself.
    Its so cringy how American public transportation is compare to Asia and Europe,
    Also, CNBC didn't really answer question of the title…

  • PilotVBall

    The USA is dirty poor. The whole country runs on debt until it collapses into a recession and bankruptcies clean up the mess. Want proof? The USA owes 2,000% of annual GDP. All the money goes into funding false wars. That's our dirt poor reality. Also keep in mind that although European airports are privatized, it is cheaper to fly in Europe. In the USA airport budgets are raided by local governments to fatten up government employee luxurious pension plans.

  • Milena D.K.

    What a bad video. All of those beautiful airports (Munich, Doha, Singapore) are government-run. The only privatized example they gave were English airports, and from personal experience airports like Heathrow, Gatwick, and Stansend are some of the worst I've been through.

  • Ser Humano

    DO NOT Drink Coffee or Tea on a plane. This comes from a flight attendant's own work for over the years. They never …EVER clean the pipes.

  • Alberto Gonzalez

    I always assume that people who fly are high ranking executives or celebrities who need to be at a certain time and have no time to waste

  • d1zguy

    I never eat or buy ANYTHING at ANY airport. Knowing they are charging an arm and a leg. I just need an airport to sit around and get me on and off an airplane don't care about anything else.

  • David Ho

    Don’t think that’s totally true. We were at Barcelona airport past summer, it looks very nice and have many stores. Unfortunately, our gate has no connection to the area that has all the stores and we can’t get out once went through security.

  • Louis Miller

    Does someone who does the sound design play with the voices on a mixing board? One guy's voice sounded like he was talking through a tunnel. I get the feeling they try to make the voices less distinct. And the background music forces the viewer to concentrate carefully on the fast speaking experts. Videos that should be interesting become annoying.

  • Vakaz Akram

    A media outlet actively supporting privatizing public infrastructure. This is why no trusts mainstreaming media sources. You guys are nothing more than shills for wealthy corporations.

  • We the People

    The title should read why is everything in America falling apart is straight garbage why is everybody now going from boy to girl girl the boy

  • Ailen

    Ever been to the Mexico city's airport? it's awful so sad that's the biggest airport in Mexico they were about to build a very first world modern airport but we have a stupid president 🙄🙄

  • Fragged Mind

    And yet the government has money for helping Saudi Arabia commit genocide in Yemen, Bomb 8 other countries, have 3 ground wars, and give money to Israel to commit apartheid against the Palestinian people.

  • Queen_Ally

    This video is very inconsistent. Honestly US airports are just incredibly poor compared to other countries because we're more focused on the bare minimum of what a traveller needs. Not trying to get someone to stick around and spend money on extra activities. That's why most airports are butt ugly.
    It would be nice if there was better public transportation but that's only a dream. The oil and automotive industries are too greedy to let that happen.

  • EricJosson

    seems like lots excuses, but still don't know why other international airport can get through but US airports looks like out of date

  • Andy Jordan Male

    I am not american but why is this channel so negative on America? Wish you all the best.Jesus bless. The Gospel is 1Corint 15:1-4

  • MagicalThinking Barbie

    6 months stay anywhere you fly. The planes are relaxing room to lay down. Great food shower. Airports have hotels for families to see passengers off. After all they will be gone for 6 months.

  • Dennis Huang

    No, I don't agreed. I think the US has the very best airport in the world. Because no matter how physically backward they are they are operating with freedom air. All other airport is operating with dictatorship air. We will have none of that… Freedom….😂😂😂

  • Curtis Martin

    Our airports still has carpet! Why in the world would anyone think its a good idea to cover the floor where millions of people walk in carpet?

  • Tri Nguyen

    mergers are monopolies bc those in position of power are lazy and not innovated in a rigged market. It never was a Free Market when only a very few has enough to capitalize. And who pays… government subsidies are our tax payer money so America like many places is a f*&^ the ppl kind of place while the super rich have it all. It's all because we give to few all the power and usually these ppl are self serving.

  • northerniltree

    American airports have terminal cancer compared with their international counterparts. Plus, the surcharges are ridiculous. Why, they even tried to charge me additional carry-on fees for the bags under my eyes during my last red-eye flight.

  • Jason Lane

    Short answer ..they're not…they're affordable unlike the flights in those countries noted where most people cant afford to fly and are force to take trains

  • Jason Lane

    The only honest statement in the entire video is th ed moody's guy fondly praising the European airports for squeezing more money out of their customers…

    The bottom line is that the elites want to drive the common man out of the sir and return to the days when flying was a rich mans place

  • Blent 1050

    Y’all must have never been to some of the nicer airports. Tampa airport is phenomenal while LaGuardia and Newark are the dankest ones out there. I thought insane taxes would translate to better infrastructure?

  • G.M Bentley Jr.

    I can’t imagine an airport with a gym, pool or ice rink. I can imagine an airport with long security lines, fast food, and no leg room. Damn shame America.

  • Markus Olofsson

    Räksmörgås (sandwich w fresh shrimps) a classic Swedish sandwich at Stockholm Arlanda is 15-20USD not including drinks. At Espresso House (like Starbucks but good) in Stockholm City about 9-10USD.

  • Peter Barclay

    Tbh ive always been surprised at the horrible facilities at us airports. And the lines at security go on forever. In europe security takes virtually no time to get through by comparison with none of the hoopla and the same safety

  • Sid N

    All the airports in the USA are Stone Age as compared to Asian airports and you need to make video on how Asian airports make money or you could have titled this video as why USA airport are worst in the developing and developed countries …

  • kd1s

    Here is another thing. Until this past January I hadn't flown since 2007. Why? Because I noted the stupidity of the whole system and said no thank you. Then there's January – I got pulled out for enhanced pat down because they alleged I had explosive residue on my shoes. The reality was it was incense ash but the MACHINE said it was explosive.

    Needless to say between the security theater and the airlines trying to extract every dollar I still say no thank you.

  • Thomas Bolden

    So they compare some of the best airports in the world and put them up against the worst airports in the US? Singapore and Germany also have horrible airports (look up Berlin Tegal and the failure of Berlin Brandenburg Airport). There are tons of airports in the United States that are fantastic that CNBC leaves out.

  • David Armstrong

    This video is ridiculous. The airports mentioned at the beginning are all government owned and built by public money. Therefore the assumption that privatisation will be the answer for US Airports is questionable. The video never once asked the question "why has the US government failed to invest to renewing America's airport infrastructure while other countries have continued to modernize theirs?". The answer: a political decision to spend money on other areas or failure to collect adequate taxes by the government to maintain public-good infrastructure.

  • Senate Transportation Services NYC

    For airport car service JFK, LGA, EWR, DCA, IAD, BWI, PIT, PHL, BDL log onto www.senatetransportationnyc.com

  • LightningAssault.com

    The answer can be summarized by bureaucracy, complacency and two fruitless, highly expensive oversee wars that each lasted more than a decade and swallowed up any money that could have gone into the infrastructure.

  • LightningAssault.com

    Another problem is also the whole 'we are the best' attitude over here. Yes you were 30 years ago, but you dont get to keep that status forever. And that exact attitude will make you fall behind fast cause you are not trying anymore.

  • Vasiliy Sabadazh

    I think LaGuardia and JFK reflect the ‘spirit’ of NYC quite well. That’s a city I don’t want to visit again (one of very few, by the way).

  • ツFredi

    Still, the TSA at JFK sucks big time. Other than that, there's nothing bad about it, really. But the TSA is lousy, and nothing but annoying. It works in other countries, it's still just as safe, so what the hell are you doing wrong America?

  • dash1dash2

    Still didn't explain how other airports are better. You know why? Because all these gigantic crazy amazing airports are built in countries where communism and totalitarianism is the law, and tons of people are worked to death and never paid for the labor. Look at Dubai for example, this entire city was built by literally thousands of pakistani slaves.

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