SPECIAL REPORT: SUSTAINABILITY Almost all are actively pitching for the myriad of opportunities
arising from the potential for greenfield airports, modernisation of ‘non-Metro’ airports, cargo-only airports and attendant ‘airport cities’ within India, most of which will be undertaken as public-private-partnership (PPP) schemes. Some of them have made it clear their ambitions do not end at the
national boundary line. The GMR and GVK infrastructure companies are already involved in or seeking global opportunities, as is Tata. Latterly they have been joined by Airports Authority of India, a huge government department intended eventually for privatisation itself (though it is anyone’s guess when) and which, in August, announced that it wanted to construct airports overseas. Civil Aviation Minister, Praful Patel, urged it to “look at every small
opportunity to maximise revenue generation. Change your mindset, without which we are not going to transform into the future. Look for every single opportunity. Bid for airports outside the country. If you have expertise, utilise it and leave a footprint.” The more exotic new investors globally – actual or tentative –
include a Malaysian plantation conglomerate with no experience in the airport sector; a Philippine brewer; a New Zealand charitable trust; a US insurance company; a Chinese industrial group; a Bulgarian government company; a Mexican luxury resort operator; a Saudi healthcare company; a US food and beverage retailer and one of the world’s largest port operation and telecommunications firms. Only two years ago a bidder for a slug of Belgium’s ‘low-cost’
Charleroi Airport was the country’s leading coffee shop operator. Another interesting development has been the growth in the number of airlines actively investing in airports. In some parts of the
world this is possible, in others it is not. At least ten cases are known of, in Europe, the Middle East and Asia (also in the US but airlines building terminals is an established part of the culture there) and including, surprisingly perhaps, Ryanair. The ownership and privatisation models employed throughout the
world vary enormously and are often dependent on the degree of control the sovereign authority wishes to retain. In Latin America, for example, most of the privatisations to date
have been by concession, for a maximum period of 35 years, although the three main operators in Mexico subsequently moved from concession to public listing by IPO on various stock exchanges. In that part of the world concerns have grown about privatised monopolies and ‘double dipping’ into the till by governments that want a share of airport charges as well as concession fees. In Europe the outright or partial sale, or IPO, have been the
preferred methods (though some governments still prefer only to offer partial IPOs) and the IPO has been popular for the major transactions in Asia as well, apart from Australia where most of the airports were privatised through concession agreements. PPPs have grown in popularity, and have a history. I mentioned India
earlier; most of the many forthcoming greenfield airports there will be developed in this matter. At the same time, it should not be forgotten that the first clearly identifiable ‘private’ airport construction anywhere – at Ireland’s Waterford Airport from 1979 to 1981 – was a PPP. And Waterford was the very first airport to host a scheduled
flight by Ryanair – in July 1985. For the record it was a 15-seat Embraer Bandeirante to London Gatwick. The load factor isn’t recorded.
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AIRPORT WORLD/AUGUST-SEPTEMBER 2010
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