A new policy brief titled ‘Creating Fertile Grounds for Private Investment in Airports’, was released on Tuesday 19 June during the 28th Airports Council International (ACI) Europe/ World general assembly in Brussels.
Produced by the ACI in association with global consultancy InterVISTAS, the paper provides key principles and guidance for governments, regulators and policy makers looking to adopt privatisation as policy.
With the rise in air traffic continuing to expand rapidly on a global basis, many airport operators are facing capacity constraints, which will lead to bottlenecks, flight delays and deteriorated customer service, as well as limiting further economic development.
Investment in existing airport infrastructure is critical to ensure that airports can continue to meet the demand and facilitate improvements in global connectivity.
Describing ACI’s position on airport ownership as “neutral,” Angela Gittens, ACI World’s director general admitted that “there is a global need to finance new airport infrastructure to meet future demand and if government spending cannot be relied upon as it has been in the past then there is ample evidence of the value created by private investment in airports around the world.”
There is no one size fits all model, she added. “But positive lessons can be learned from existing privatisation processes, especially where they have been subject to stable, consistent and proportionate economic oversight.
“Securing the overall viability and sustainability of a private project requires that the government set appropriate parameters from the very start of the process. This requires a thorough analysis of the market into which airports are being privatised and the evolution of the airport industry as businesses in their own right in an increasingly competitive environment.”
The report highlights that privatisations may need to cluster airports to allow for cross-financing. This is particularly effective for small airports and the complexity of covering the high costs they face because of their low throughput. The report suggests that clustering these airports allows cross-financing of infrastructure investments. It also maximises the economic and social benefits small airports offer to their communities and regions.
