Airport Management
EMERGING CHALLENGES IN AIRPORT MANAGEMENT -WAY FORWARD
INTRODUCTION
The airport business is experiencing unprecedented change. The world’s airlines are undergoing global liberalisation and consolidation, and competition between airports is increasing. Tremendous investment programs are required simply to keep pace with the projected growth in air travel demand, while governments are reducing their funding for airport projects. These factors are literally changing the face of the world’s airports. Today, only an estimated 2 percent of the world’s commercial airports are genuinely managed or owned by the private sector. However, an expanded private sector role is inevitable. Its evolution is seen in varying stages around the world, in opening up ground handling to additional competition, outsourcing activities such as facility management, developing long-term management contracts, initiating public/private joint ventures, Build Operate Transfer (BOT) project financing, and in the case of a few airports so far, outright equity offerings. New airport transactions are proceeding at an unprecedented pace, and so far, no major transaction has failed. New players are entering the global airport management market, driving the stakes (and risks) even higher. As with any major new product, however, the window of exceptional opportunity lasts a limited time, as forward-thinking business leaders claim their stakes across a new airport management value chain.
OVERVIEW
Air transport is a growth industry. While global GDP doubled between 1970 and 2000, passenger traffic quadrupled, while cargo grew six times. Governments across the world have found it hard to sustain the capital investments necessary to cope with this growth. Hence, the need to bring private players into the airport infrastructure space is driven substantially by fiscal constraints, and partly by ideology.
Key drivers affecting the air
INTRODUCTION
The airport business is experiencing unprecedented change. The world’s airlines are undergoing global liberalisation and consolidation, and competition between airports is increasing. Tremendous investment programs are required simply to keep pace with the projected growth in air travel demand, while governments are reducing their funding for airport projects. These factors are literally changing the face of the world’s airports. Today, only an estimated 2 percent of the world’s commercial airports are genuinely managed or owned by the private sector. However, an expanded private sector role is inevitable. Its evolution is seen in varying stages around the world, in opening up ground handling to additional competition, outsourcing activities such as facility management, developing long-term management contracts, initiating public/private joint ventures, Build Operate Transfer (BOT) project financing, and in the case of a few airports so far, outright equity offerings. New airport transactions are proceeding at an unprecedented pace, and so far, no major transaction has failed. New players are entering the global airport management market, driving the stakes (and risks) even higher. As with any major new product, however, the window of exceptional opportunity lasts a limited time, as forward-thinking business leaders claim their stakes across a new airport management value chain.
OVERVIEW
Air transport is a growth industry. While global GDP doubled between 1970 and 2000, passenger traffic quadrupled, while cargo grew six times. Governments across the world have found it hard to sustain the capital investments necessary to cope with this growth. Hence, the need to bring private players into the airport infrastructure space is driven substantially by fiscal constraints, and partly by ideology.
Key drivers affecting the air
Bibliography: www.icao.int www.aci.aero www.iata.org