AIRPORT REPORT: INCHEON
However, the ‘globalisation’ of IIAC, which is a key part of Lee’s
2011-2015 vision, has already begun with the South Korean airport operator already involved in a handful of overseas projects. They include Erbil Airport in Iraq where a team of around 30 IIAC
staff helped oversee the opening of the gateway and now assist with its daily operations. IIAC is also working on developing the master plan for Mactan-Cebu
International Airport in the Philippines, and in December 2010, IIAC won the contract to provide IT design supervision and consulting services to Cambodia’s Siem Reap International Airport. It previously completed the master plan for Russia’s Khabarovsk Novy
Airport in conjunction with three local companies. The next step in the evolution of IIAC is privatisation, with the South
Korean government planning to carry out the first phase of an eagerly awaited Initial Public Offering (IPO) planned for later this year. IIAC is currently 100% state owned, but the government plans to sell up
to 49% of its shares to the private sector. In order to protect the country’s ‘national asset’, foreign ownership will
be limited to 30%. Individual companies will be limited to a 15% shareholding while the
airlines are being restricted to a maximum of 5%. The only obstacle to the sale is the fact that the opposition party is
opposed to it and have pledged to block it if they come to power, despite trying to push through an IPO when they were in power! Lee says that the downturn in the global economy, meaning that the
government wouldn’t get the price it wanted for its stake, and fact that IIAC wasn’t a profitable organisation during its first few years – the airport recorded its first profit in 2004 – were the key reasons for the failure of previous IPO attempts. Things are very different now, of course, with IIAC recording a net
profit of $300 million last year on a turnover of $1.2 billion. “We are now one of the best performing state owned companies
22 AIRPORT WORLD/FEBRUARY-MARCH 2011
and therefore an attractive proposition,” says Lee, who is quick to point out that the sale will not inevitably lead to a drop in service quality at Incheon. “The government will remain the main stakeholder and this will
ensure that the high service levels that we are known for today are maintained,” says Lee. The government is also aiming to introduce new legislation that will
prevent the new shareholders from trying to hike up the airport’s user charges in a bid to earn a faster return on investments. If all goes to plan, the government will sell up to a 15% interest in
IIAC during an IPO in the second half of 2011. Lee admits that a number of the big international players have
already expressed an interest in acquiring a stake in Incheon, although he refused to be drawn on naming names. “We want to be a truly global company and it is very hard to be that
when we are a 100%-owned government company,” he suggests. “Private investors will provide us with a cash injection that will help us achieve the next step of our development, while an international shareholder with global airport experience will add experience and know-how. “We want to export our knowledge and experience overseas
and working with an international partner can help us achieve this goal. It might even pave the way for us entering into an overseas project together.” Why invest in IIAC? “There are plenty of airports and investment
partners that would want to take advantage of what we have to offer,” remarks Lee. “We are a very technologically advanced airport, for example, and I
am sure that many gateways could benefit from our skilled technicians and engineers. Indeed, some already do. “Maybe we can manage an airport together or even share an equity investment? Some of these global airport operators have interests in
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