President Trump presses for large scale Dulles Airport expansion – the case for a lease or P3s
There are those in the United States, led by the right-leaning Reason Foundation, who consistently argue for the privatisation of US airports either by lease, or public-private partnerships, to build specific infrastructure like terminals. (Both are referred to as P3s in the US).
Equally there are those, most often found in municipal (city, county, state) office that prefer the status quo, and the inherent certainty of traditional avenues of financing such as tax exempt airport bonds, passenger facility charges, airline terminal leasing charges and so on.
The non-privatisers overall have won the argument, which began with the '1996 Airport Pilot Privatisation Programme', and which today sees only one major airport fully privatised (and that in an overseas US Territory - Puerto Rico).
Now the matter has been thrust back into the spotlight with the desire of the nation's incumbent president to modernise and grow Washington Dulles Airport on a grand and costly scale, with over USD20 billion of investment. Previously, in his first term, President Trump had expressed the wish that both the Dulles and Reagan airports be privatised.
This time he has not expressed a preference for Dulles to be privatised by lease. That hasn't happened to a major US airport for over 13 years (Puerto Rico), and the last attempt to do so (St Louis Lambert Airport) fell flat in 2019 - despite huge global interest in it.
Instead, his expensive overhaul plan does incorporate P3s for specific development aspects.
This report looks at the argument for and against infrastructure-specific P3s, both at Dulles and generally, while counselling that full lease privatisation there may still make more sense.
Summary
- Trump/DoT revived the Dulles modernisation debate by seeking private-sector input via an RFI focused on P3 delivery for new terminals/concourses rather than full airport lease privatisation.
- MWAA already had a USD7 billion improvement programme underway, but its board has now lifted the overall Dulles capital plan to about USD19.9–20 billion over 15 years, largely funded by tax-exempt municipal bonds.
- Full US airport lease privatisation remains politically and practically rare (Puerto Rico 2013 the only major example), and airline approval rules give dominant carriers an effective veto over lease deals.
- United is the fortress hub at Dulles (about two-thirds of seat capacity), making its support central to any financing/privatisation structure and raising concerns that incremental expansion could further entrench its dominance.
- Private consortia proposals (e.g., Ferrovial, Macquarie) for long-term lease-style approaches have faded, with P3s now more likely to be limited to specific project components.
- The article contrasts mixed US P3 outcomes - LaGuardia’s successful terminal P3s versus LAX’s delayed people-mover DBFOM - while citing research suggesting long-term lease/P3 models can increase competition and lower fares.
The US president had sought public-private partnership arrangements to improve Dulles International Airport
In Dec-2025 CAPA - Centre for Aviation published a report concerning US President Donald Trump's ambition to reinvigorate Washington Dulles - the main international airport serving the capital district and located 26 miles (42 km) west of downtown - noting that in his first term he had rapidly floated the notion of privatising by lease both the Dulles and Ronald Reagan airports, before he was dissuaded by security and other concerns.
Dulles - which honours John Foster Dulles, an influential Secretary of State during the Cold War - has numerous problems that need attention, including outdated people movers, a sprawling layout, ageing facilities, and accessibility issues, despite recent improvements like the AeroTrain and Silver Line Metro extension.
The president ordered the Department of Transportation (DoT) to submit a 'Request for Information (RFI)' for proposals and public-private partnership (P3) plans from developers, architects and engineers to construct new terminals and concourses at Dulles.
The public authority had already sanctioned USD7 billion for infrastructure improvements
To be fair to the Metropolitan Washington Airports Authority (MWAA) which runs the airport, Dulles is already undergoing a USD7 billion capital improvement programme, including a new 14-gate Concourse E for United Airlines for whom Dulles is the main base/hub in the east of the US, with further expansion and modernisation outlined in a recently updated master plan.
The president and the DoT specifically seek private sector co-operation on these matters through P3s, which have become popular in the US as a method of partially privatising and building specific airport infrastructure, like terminals and consolidated car rental centres. They have been the most effective method of constructing such new airport infrastructure in recent years whilst retaining public sector ownership.
Full airport privatisation by lease (the only permitted method) has gone off the boil - perhaps never to rekindle.
The White House ballroom debacle signals a warning to private investors
The question posed in Dec-2025 was: to what extent would the private sector come on board; and if so, who exactly?
The debacle that the new ballroom at The White House has become, with its construction (which is well under way) being temporarily blocked by congress, effectively because it has not given the work planning permission, must raise doubts in the minds of investors and construction companies alike whenever the president is linked to a project.
Foreign companies would be busting a gut to get involved at Dulles, but probably would not be welcome
Another angle was that - although there are highly capable US companies in this field, the greatest experience of providing privatised infrastructure in this sector is to be found elsewhere in the world; and there are almost certain to be foreign companies that were queuing up for the St Louis Lambert Airport lease in 2019, that will see another opportunity going begging.
In total, 19 non-US firms or entities registered their interest in that privatisation, which was eventually cancelled in the light of business and public opposition.
The success of the federal initiative depends on the willingness of both US and international private sector partners to participate, with experienced P3 firms such as Vantage Group (Canada), Ferrovial (Spain/Netherlands), and others likely to be considered.
Vantage Group has just taken on the management of Green Bay Airport in Wisconsin, the first non-US company to do so since the lease of the Luis Muňoz Marin Airport in Puerto Rico (a US territory) to Aerostar Holdings (Mexico) in 2013, and before that, the lease on Stewart International Airport in New York State to the UK's National Express Group between 2000 and 2007.
But it is easy to get the impression that foreign investors would not be welcome at such a prestigious project in the nation's capital as it celebrates its 250th anniversary.
There is scepticism about whether the federal push represents substantive change or political showboating, as many planned improvements are already under way, and the ultimate impact will depend on private sector and airline engagement.
Passenger traffic at Dulles is projected to grow by more than 30% by 2030; but these forecasts may be optimistic, given historical growth rates and recent post-pandemic recovery trends.
Some progress has been made recently, but the private sector is out, at least for now
There has been some progress in the last nine months, and this is an opportune moment to highlight it. It appears that the private sector has been sidelined.
President Trump's and the DoT's Transportation Secretary Sean Duffy unveiled at the end of Jul-2026 an (in excess) of USD20 billion capital investment programme to support the "landmark transformation" of Dulles.
The project will be conducted in partnership with the MWAA and United Airlines and will include:
- close-in parking facilities, state-of-the-art check-in areas and more efficient security screening;
- building new and modernised concourses, and replacing the existing Concourses C and D with facilities that will support additional and larger aircraft;
- additional gates providing passengers with more spacious, comfortable seating areas, dedicated work areas and amenities;
- new AeroTrain connections and enhanced walk-ability, including a central walking tunnel, enabling the replacement of mobile lounges;
- creating a walkable path to a new, large 'US Customs and Border Protection' facility, and improvements designed to deliver a new international arrival experience;
- constructing a state-of-the-art baggage handling system;
- adding concessions and airport lounges, including more 'United Club' space, and plans for one of the largest United Polaris Lounges in the world.
United rules the roost at Dulles
MWAA will partner with the airport's serving airlines to finance the new concourses and terminal facilities.
There are 46 of them in total - 10 domestic-only, operating 142 routes of which 86 are domestic.
United is far and away the largest, and 'fortress hub' airline, with 65.6% of overall seat capacity.
The nearest competitor is Delta, with only 3.6%.
The same is the case for aircraft movements with United averaging between 73% and 74.5% between off-peak and peak times.
United clearly rules the roost at Dulles, and that is important because it remains the case that any lease privatisation of a US airport has to be supported by airlines.
Specifically, under the federal Airport Investment Partnership Programme (AIPP) (formerly the Airport Privatisation Pilot Programme), applicant airports seeking to transfer operations to a private entity must secure formal approval from a supermajority of the airlines operating at that airport (typically requiring approval from airlines representing at least 65% of landed weight and 65% of passenger numbers).
This legal threshold gives major airlines a de facto veto over municipal or state attempts to lease or monetise airport infrastructure.
United almost certainly satisfies that requirement on its own.
With privatisation off the agenda for now financing will come mainly from municipal bonds; P3 opportunities may come later
However, lease privatisation is off the agenda nationally right now, and specifically in this case.
Whatever the president wished for, the financing of this Dulles project will fundamentally be through tax exempt municipal bonds - a long-standing and popular method of finance for the US's airports.
Other, so far unspecified, portions of the development, though, will include opportunities for P3 investments.
Modernisation work has already begun, with the first segment of the new Concourse E to open with 14 new United gates later in 2026.
As mentioned previously this work was instigated by MWAA prior to the president's intervention.
MWAA financial approval shoots up to USD20 billion over 15 years
On 23-Aug-2026 MWAA's board of directors approved USD15.5 billion in additional funding to modernise Dulles, increasing the airport's construction budget to USD19.9 billion over 15 years.
The renovation programme's first phase, 'Package A', will expand the airport's main terminal, upgrade ticketing areas, create new Transportation Security Administration (TSA) and US Customs facilities, build a connector between the main terminal and the current A/B Concourse, and add international gates to the main terminal.
The terminal expansion will cost approximately USD6.2 billion, with construction expected to begin in late 2027.
Questions continue to be asked; 18 injured in a mobile lounge crash and the president is back with another set of proposals
Questions continue to be asked about how this giant project is progressing, and why certain decisions have been taken.
To recap: in Dec-2025 the DoT released an RoI about "re-imagining" Dulles. It asked for design concepts, financing proposals, and potentially construction of new terminals.
Some 15 responses were submitted by companies and teams of companies. The two most ambitious proposals came from the aforementioned Ferrovial and also Macquarie, each proposing large-scale modernisation under a long term lease, not a series of P3s, and more in line with what the president had in mind.
Today those ideas and that idealism seem to have fallen by the wayside.
Firstly, the MWAA proposed its USD20 billion makeover that would at least junk the airport's hated 'mobile lounges', but would use conventional airport financing. The lounges are very large, bus-like vehicles that raise and lower themselves on hydraulic legs to move passengers between the main terminal and specific gates or concourses. Designed by renowned Finnish-American architect Eero Saarinen, who designed the Gateway Arch in St Louis, and introduced in 1962, these iconic 76-ton giant lounges are currently being phased out under the airport's modernisation plan.
Not before time. In Nov-2025 one of them hit a building, causing 18 passengers to be injured.
News report on passenger mobile lounge incident at Dulles Airport
Source: WUSA9.
In Jul-2026 President Trump reappeared on the scene and unveiled his own plan, calling for a huge new parking structure and an expanded train system linking the terminals.
National media reported that United "had agreed to help pay for" improvements at what amounts to its fortress hub.
Growing support for leasing and P3 activities amongst US consultants; LaGuardia is a shining example
The prevailing opinion among some US critics is that these modernisation proposals leave a lot to be desired.
One assertion is that government agencies have a poor track record seeing through such mega projects on their own, while long term P3s can shift significant risk - for example, cost overruns and late completion, to investors, rather than taxpayers.
In these projects, those risks are borne primarily by equity investors.
It is certainly true that in New York, for example, two terminals at LaGuardia Airport were successfully modernised at a total cost of USD8 billion by two separate P3 consortiums. LaGuardia being an airport that President Trump had identified as being of 'Third World' standard in the run up to the 2016 presidential election, but one that is now universally appreciated by users.
Similarly, several other major P3 projects are in operation at the John F Kennedy Airport, and one might be introduced at Newark.
But many large airports have used self-financing and more traditional methods to add large scale infrastructure
On the other hand, airports like Chicago O'Hare, Los Angeles International, Atlanta and Dallas-Fort Worth could point to vast, expensive modernisation and expansion projects running into billions of dollars that have been self-funded and aided by any of a raft of other supporting measures.
These include general and special purpose municipal bond issues, tenant rents, customer facility charges and federal grants without imposing directly on taxpayers and avoiding any input from the private sector.
A Los Angeles people mover project has missed deadlines, such as the World Cup, and could miss the Olympic Games too
An alternative opinion again might be that Los Angeles International (LAX) has patently failed to complete its 'people mover', which was a P3 project (technically a multi-year availability-payment Design-Build-Finance-Operate-Maintain [DBFOM] agreement) on time, or even remotely near it.
The troubled project, branded as 'SkyLink' to move people between the terminals and the nearby rental car facility and remote parking lots, involves the construction of just 2.25 miles of elevated track. It began in Mar-2019 and the total project and contract cost is approximately USD4.9 billion over its 25-to-30-year agreement, while riding the train itself will be free for passengers and employees.
Even allowing for the COVID-19 pandemic in 2020-2022, despite missing its original target date of being operational by 2023, LAX officials had hoped that it would be operational before the 2026 Soccer World Cup; but that is now history, without an operational LAX people mover.
The project has been plagued by contract disputes and litigation with endless negotiations over timeline, production, and compensation between Los Angeles World Airports (LAWA) and the LINXS consortium building the project.
The aspiration today is that it will finally be operational in time for the 2028 Olympics - nine years after construction began.
The LAX people mover faces a looming longstop deadline
Another problem the people mover has faced is one of financing.
Fitch Ratings recently moved the rating on its USD1.2 billion senior bond to its negative watch list. It has been downgraded from BB+ to BB, which highlights the project's vulnerability to default risk.
Fitch said further delay "leaves the project in a precarious position, with a limited margin of safety, before it could breach its lenders' longstop of 08-Oct-2026 and the project's longstop date of 08-Dec-2026".
A longstop date is a final, absolute deadline in a contract by which specific conditions must be met or an action must be completed. It is the last possible date agreed upon by all parties. It stops a deal or project from staying open-ended forever if delays happen. If the deadline passes without meeting the conditions, one or both parties usually have the right to cancel or terminate the contract without penalty.
In that unlikely scenario, the project with LINXS could be terminated, and LAWA, which manages LAX, would have to find a new contractor, further delaying the train's future.
At the very least, the odds against the people mover being operational for the 2028 Olympics are stacked against it.
Then again - could LAWA have begun the project at all without outside private sector help from a risk taker?
Limited expansion typically fortifies a fortress hub even further; large-scale expansion opens the airport up to greater competition
Another problem critics point to with attempting a USD20 billion airport expansion of a fortress hub airport is that it would further lock into place the dominant airline (in this case - United).
Should Dulles be dramatically expanded along the lines the president prefers? It would probably attract more US and international airlines, providing greater competition with United and possibly a wider range of landing fee and terminal space rentals.
Several studies suggest that long term lease airports do not benefit fortress hub airlines and do encourage more competition and other benefits
The long term P3 options suggested by Ferrovial and Macquarie would be financed by a mix of debt (revenue bonds) and private equity.
There is empirical evidence gathered in the US that airports managed under long term P3 leases (and especially those financed via infrastructure investment funds such as those of Macquarie) lead to increased airline competition, more destinations served, and usually lower air fares from full-service airlines, as well as low cost ones.
The leading study on this to date is the National Bureau of Economic Research (NBER) Working Paper 30544, 'All Clear for Takeoff: Evidence from Airports on the Effects of Infrastructure Privatisation,' which found that airports managed under a long term P3 lease that included an infrastructure investment fund have more airlines, lower average air fares, increased airport productivity, and greater passenger satisfaction.
In contrast, a conventional airport expansion would more likely further entrench United's fortress hub at Dulles, foregoing the benefits of increased competitive airline service.
The US still lags the rest of the world in this respect
A growing majority of leading airports worldwide are now managed under long term leases with private sector participation. The United States continues to lag the rest of the world in using this model, with the only current example being the San Juan, Puerto Rico's Luis Muňoz Marin Airport, which many observers believe to have been transformed through its long term lease.
There are no other potential lease deals in existence, and that has been the case since 2019, save for the ongoing transformation of a small number of general aviation airports into commercial regional ones with private sector P3 investment into the modernisation of terminals.
The president and the MWAA should consider this evidence
Putting aside the impasse at LAX, with its people-mover that isn't moving, there is enough evidence of the benefits of P3 constructions in the US - and more importantly, of full airport leases globally - to suggest that the current government administration and the MWAA should take a much closer look at the NBER research findings and the growing global track record of long term airport public-private partnership leases.
Bearing in mind, of course, that he has previously conceived of the privatisation of both the Washington DC airports.
In other words, that would be a better way to expand and modernise the international airport serving America's capital region.
On 19-Aug-2026 the MWAA board approved an additional USD15.5 billion to replace the unpopular Dulles people-movers (that date back to 1962) with underground rail tunnels, and to add some terminal expansions
It did not include President Trump's proposal for a massive new parking deck costing nearly a billion dollars.
A halfway measure is on the cards, and that might not be the optimal solution.