An examination of risk transference in air transport privatization

This paper reassesses the notion of risk transference resulting through the introduction of private sector involvement in air transport. The paper challenges the belief that a change in ownership not only transfers the possible financial benefits from ownership but also the risks in question. While the new shareholders’ investment will be exposed to risk, it is becoming clear from the responses by governments to a series of recent crises that they have not freed themselves from all the associated risks. The purpose of this paper is to explore the issue of the transfer of risk in terms of the privatization of the air traffic control system in the UK. The authors conclude that governments and capital markets have been bearing a bigger risk than they originally thought.