Perceptions of privatisation and corporate performance : a study of Sydney airport stakeholders

Privatisation reforms have been embraced by different nations and implemented in various industry sectors since the 1980?s. Airports have been privatised with airport operators taking a more commercial positioning into account whilst catering for individual stakeholders. It is claimed that airport privatisation has led to the emergence of new industry players enabling these airport operators to raise additional capital, improve efficiency, reduce costs, generate new revenue streams and engage in new commercial airport investments in the market economy. It is claimed that the transfer of ownership and management of airport enterprises into private hands generated more value and efficiencies. A question remains however about the actual impact of airport privatisation on stakeholder groups. This study aims to provide insight to the affirmation that airport privatisation has not only led to a change of the airport business in general but to explore the perceptions of key stakeholders and whether they have benefited from privatised airport operations. The undertaken study therefore consisted of two parts: Firstly, the existing claims and theories sympathetic with the privatisation reforms were explored. This entailed a thorough investigation as to who the key stakeholder groups of Sydney are which was followed by exploring the airport privatisation objectives as perceived by the key stakeholders of Sydney airport five years post privatisation. Secondly, a theoretical model referred to as the Stakeholder Airport Performance Assessment Model (SAPAM) that examines airport performance from stakeholders? perspectives, was proposed. In particular as airport performance is frequently assessed by focusing on financial performance and little attention is given to combining an analysis of financial measures together with non financial measures; especially when airports are complex entities exhibiting monopolistic attributes and having extensive social responsibilities. The airport performance assessment tool was based on the thoughts of Kaplan and Norton (1992) Balanced Scorecard idea. Stakeholder airport performance attributes were derived for assessing privatised airport performance from the service quality as well as the financial and environmental perspective of airport users is discussed. The findings were derived using a qualitative paradigm by combining interviews and archival content analysis whilst analysing the impact of Sydney airport privatisation on its stakeholders. The Leximancer qualitative research software together with Nvivo v7 assisted the data analysis. The research findings emphasise that the privatisation of Sydney Airport has led to airport operations being primarily driven by the ?bottom line? of profitability. The commercial orientation of Sydney Airport, its overall business growth and the ongoing airport land development, although criticized to an extent, were perceived to be the most notable outcomes of the Sydney Airport privatisation; each having an impact on stakeholder operations. In addition, the outcomes of this study are relevant to stakeholder theory, resource-based theory and contingency theory. The results demonstrate the importance of stakeholder recognition by corporations, thus linking it to performance management. The results can be seen as contemporary contributions to the global privatisation debates, as indicative in the literature review there is no privatisation theory as such. The privatisation debate is thus set to continue on the more ideological grounds of competition, free-markets and other relevant factors. The findings emphasise further that privatised airports have become considerably more accountable to the public and its stakeholders. The developed Stakeholder Airport Performance Assessment Model (SAPAM) proposes that the impact of privatisation reforms on society should be validated by assessing privatised airport performance through the eyes of stakeholders in line with the framework of the Balanced Scorecard and stakeholder theory. Overall, this study has made significant contributions in terms of adding to the body of knowledge valuable information for both private and public sector industries and firms in determining relevant measures and models for performance assessment as a result of privatisation. The need expressed in the literature for more studies on the Australian privatisation experience and in particular the air transport industry and the benefits to its stakeholders was the driver behind this doctoral study on airport privatisation.