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Editor, Joe Bates, considers the attraction of airports to private investors in this ‘global airport operator’ themed issue of Airport World.
While there are plenty of examples to show that the mantra ‘build it and they will come’ isn’t always true, there is no denying that airports with modern facilities, state-of-theart technology and a customer service ethos are more appealing to use than those without.
The route network offered by the airlines, accessibility and location are, of course, also crucial to the success of any airport, especially those in direct competition with similar sized or bigger gateways on their doorstep.
And, going forward, what airports do to minimise their impact on the environment and develop in a sustainable manner is likely to become even more important to both passengers and investors.
What isn’t up for debate is the fact that airports are capital intensive businesses and, ultimately, require owners to invest significant amounts in the development of infrastructure, technology and the manpower necessary to ensure sustainable growth.
The need to find the funds to develop airports, or in some cases for governments to raise income from airport sales to invest elsewhere in national economies, was the catalyst for the birth of private sector participation in airports either through ownership, management or investment programmes.
It all started with the privatisation of the British Airports Authority (BAA) in the UK in 1986 and, I don’t think it’s an exaggeration to say that airports have been in demand by private investors ever since, with the possible exception of in the aftermath of 9/11, the global financial crisis of 2008 and more recent COVID pandemic.
What has changed, however, is the type of investors involved in buying airports, with the winning consortiums today often involving the financial clout of a sovereign wealth or pension fund and the experience of an established airport operator.
These stakeholders have a vision and are in it for the long haul, setting them apart from
some of the early investors, who had a more short-term approach to the industry.
Our ‘big six’ feature in this ‘global airport operators’ themed issue of Airport World focuses on half-a-dozen of the biggest, best and brightest operators in the market today with assets in multiple countries.
Specifically we learn more about the airport portfolios, ambitions and concerns of Aena, Corporación América Airports, Fraport AG/Frankfurt Airport Services Worldwide, Groupe ADP, TAV Airports and VINCI Airports.
The themed section also includes our annual ‘buying game’ investment feature which takes a closer looks at the airport concessions that have either been completed this year, are in the pipeline, or in danger of stalling.
We also hear from ACI World’s former vice president and chief economist, Patrick Lucas, who in his new role as principal and founder of Airport Economics Consulting, considers whether there is a business case for small scale airport Public-Private Partnership (PPP) projects.
Our main airport feature is on Mactan Cebu International Airport, which is flourishing under new owners and has ambitious plans to become the first transfer hub in the Philippines and a sustainability leader for the region.
This edition also includes a review of the recent ACI World Customer Experience Summit in Atlanta; the planned expansion of Madinah Airport in Saudi Arabia; and the process involved in drafting the master plans for three airports in the Cayman Islands.
Elsewhere in the issue we report on some of the latest sustainabilty initiatives going on at airports across the world; hear some tips for boosting non-aeronautical revenue; reflect on the importance of the human connection in changing work environments in our regular ‘people matters’ column; and report on the latest news from ACI and ACI's World Business Partners (WBP).
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Editor, Joe Bates, considers the attraction of airports to private investors in this ‘global airport operator’ themed issue of Airport World.
We report on the latest news, views and developments from ACI World and across the organisation’s five regions.
With soaring traffic figures, an ambitious new investor and plans to become the first transfer hub in the Philippines, these are exciting times for Mactan Cebu International Airport, writes Joe Bates.
Joe Bates discovers more about the ambitions, development strategies and networks of six of the world's biggest global airport operators – Aena, Corporación América Airports, Fraport AG, Groupe ADP, TAV Airports and VINCI Airports.
In the 2024 edition of our annual investment feature, Modalis Infrastructure Partners’ president and CEO, Curtis Grad, discovers that the airport private sector deal flow remains strong despite geopolitical headwinds.
40 Excellence all
Learning about the delivery of top quality customer service from some of the best in the business was high on the agenda at the recent ACI World Customer Experience Summit and Exhibition in Atlanta.
Director General
Justin Erbacci (Montreal, Canada)
Chair
Candace McGraw (Cincinnati, USA)
Vice Chair
Jost Lammers (Munich, Germany)
Immediate Past Chair
Aimen Al Hosni (Muscat, Oman)
Treasurer
Arnaud Feist (Brussels, Belgium)
ACI WORLD GOVERNING BOARD
DIRECTORS
Africa (3)
Emanuel Chaves (Maputo, Mozambique)
Fabrice Grondin (Saint-Denis, Réunion)
Mpumi Mpofu (Johannesburg, South Africa)
Asia-Pacific & Middle East (9)
Lorie Argus (Melbourne, Australia)
Mohamed Yousif Al-Binfalah (Bahrain)
SGK Kishore (Hyderabad, India)
Fred Lam (Hong Kong)
Emmanuel Menanteau (Paris, France)
Akihiko Tamura (Tokyo, Japan)
Yun Qin (Shanghai, China)
2 Vacancies
Europe (7)
Armando Brunini (Milan, Italy)
Arnaud Feist (Brussels, Belgium)
Jost Lammers (Munich, Germany)
Javier Marin (Madrid, Spain)
42
Stantec’s Dave Dargie tells us more about the planning and design involved in drafting the long-term development options for the Cayman Islands’ airports.
Massimiliano Martinenghi, project director at Scott Brownrigg, brings us up to speed on the planned expansion of Madinah Airport in Saudi Arabia.
Sam Folley and Shirin Pishbin of Trowers & Hamlins explore how airports can maximise revenue from non-aeronautical sources.
We shine the spotlight on the latest airports to reach Level 5 in ACI’s Airport
Carbon Accreditation programme and a host of pioneering sustainability initiatives across the globe.
52
We round-up some of the latest ACI World Business Partner stories from across the globe.
54 People matters
Richard Plenty and Terri Morrissey reflect on the importance of the human connection as the ‘airport group’ model grows in importance.
Yiannis Paraschis (Athens, Greece)
Augustin de Romanet (Paris, France)
Nazareno Ventola (Bologna, Italy)
Latin America & Caribbean (3)
Ezequiel Barrenechea (Guayaquil, Ecuador)
Mónika Infante (Santo Domingo, Dominican Republic)
Juan José Salmón (Lima, Peru)
North America (6)
Kevin Dolliole (New Orleans, USA)
Deborah Flint (Toronto, Canada)
Joseph Lopano (Tampa, USA)
Candace McGraw (Cincinnati, USA)
Sam Samaddar (Kelowna, Canada)
Roelof-Jan Steenstra (Toronto, Canada)
Regional Advisers to the World Governing Board (10)
Evans Avendaño (Lima, Peru)
Lew Bleiweis (Asheville, USA)
Daniel Burkard (Moscow, Russia)
David Ciceo (Cluj-Napoca, Romania)
Tan Sri Bashir Ahmad Abdul Majid (Delhi, India)
Mohamed Saeed Mahrous (Cairo, Egypt)
Jorge Rosillo (Galapagos, Ecuador)
Brian Ryks (Minneapolis-St Paul, USA)
2 Vacancies
WBP Observer
Esperanza Morales Martin (Global Exchange)
Correct as of October 2024
We report on the latest news, views and developments from ACI World and across the organisation’s five regions.
ACI World’s highly anticipated 2024 Annual World AirportTraffic Report is projecting a 10% growth in global passenger traffic in 2024, reaching 9.5 billion by year-end.
Drawing data from over 2,700 airports across more than 180 countries and territories, the report offers the most comprehensive overview of the global airport industry and aviation markets for the operating year 2023 and the first half of 2024.
ACI World director general, Justin Erbacci, was among a host of guests that included ACI World chair and CEO of Cincinnati/Northern Kentucky International Airport, Candace McGraw, and ICAO secretary general, Juan Carlos Salazar, at the opening of ACI World’s new Montreal offices in early September.
Immediate past ACI World director general, Luis Felipe de Oliveira, said: “This new space is not just an office; it is a hub for big ideas and forward-thinking. Here, we will envision and shape the future of airports and the aviation industry.”
He also took the opportunity to honour the 80th Anniversary of the Chicago Convention and ICAO's crucial role in fostering international civil aviation over the past eight decades. Also joining in the celebrations were Luc Rabouin, Ville de Montréal’s executive committee chair, responsible for finance, economic development, and higher education.
ACI World director general, Justin Erbacci, commented: “The release of the 2024 Annual World Airport Traffic Report highlights the resilience and adaptability of the global aviation industry and demonstrates ACI World’s unmatched ability to predict and analyse industry trends.
“The insights provided in this report – reaffirming ACI World’s 99.99% forecasting accuracy – are crucial for aviation stakeholders, policymakers, and industry professionals to make informed, datadriven decisions and strategically plan for the future.”
• H1 2024 passenger traffic: By June 2024 year-to-date (YTD), total passenger traffic increased by 11% YoY, reaching 102% of the June 2019 YTD level. The international market, driving recovery, saw a 17% YoY increase, while the domestic market grew by 6% YoY.
• 2024 international passenger traffic: Expected to reach 4.1 billion by the end of 2024, accounting for 43% of total passengers.
• 2024 domestic passenger traffic: Projected to reach 5.4 billion by the end of 2024, making up 57% of the total.
Despite positive macroeconomic developments such as easing inflationary pressures, ACI World notes that the medium-to-long-term outlook remains subject to downside risks such as geopolitical conflicts, labour market bottlenecks, and aircraft delivery constraints. However, the gradual recovery of international passengers and a return to profitability for airlines signal a positive momentum in the industry.
ACI World has launched an essential publication dedicated to improving accessible travel for all passengers.
The publication, Airports and Accessible Travel: A Practical Guide, was launched during the Airports Service Quality (ASQ) Forum at the ACI Customer Experience Global Summit in Atlanta, an event dedicated to customer and employee experiences at airports.
The guide was developed by the ACI World Facilitation and Services Standing Committee in collaboration with leading accessibility advocacy groups, ACI World training partners, ACI Regions, ACI airport members and Customer Centric Consulting, with the financial support of InterVISTAS Consulting and Amadeus.
Building on ACI World’s Airports & Persons with Disabilities Handbook, the expanded guidance provides up-to-date best practices for integrating accessibility into both new and existing airport facilities.
It includes practical recommendations, case studies, and strategies for barrier-free design, accessible procedures, and services for passengers with visible and non-visible disabilities, while also focusing on staff training.
ACI World director general, Justin Erbacci, said: “Approximately 1.3 billion people, or one in six globally, experience some form of disability [WHO data]. ACI World is dedicated to assisting our member airports in creating barrier-free environments, ensuring equal access and exceptional travel experiences for all airport guests, regardless of ability.
“We remain committed to advocating for and developing resources to support our members in providing a more inclusive and accessible air transport system.”
To further support its global members, ACI also developed the Accessibility Enhancement Accreditation (AEA) programme, which is
designed to provide a continuous improvement path for airports regarding accessibility for passengers with disabilities.
The programme helps airports measure, evaluate, and enhance their accessibility management and culture through tailored advice from subject matter experts and learning experiences with peers.
It remains the only international assessment and accreditation programme dedicated to airport accessibility for passengers with disabilities.
The first certificate ceremony of the programme was held during the ASQ Forum, marking the AEA programme’s second anniversary.
To date, over 50 airports have joined the initiative, underscoring airports’ dedication to building a more accessible and inclusive air transport system.
ACI Latin America & Caribbean (ACI-LAC) and IATA are hailing the success of Aviation Day Argentina in Buenos Aires, which brought together more than 450 delegates from across the aviation industry in early September.
The meeting provided a forum to discuss the opportunities and challenges ahead for Argentina, particularly since the introduction of new government policies setting the framework for the opening and deregulation of the aviation market.
Many participants highlighted the importance of Public-Private Partnerships as these can support aviation’s role as a strategic economic partner, not only facilitating social connectivity, but also driving the development of tourism, trade and investment, even in a challenging economic context.
As IATA’s regional vice president for the Americas, Peter Cerdá, stated in his opening remarks, “when the industry works together, and when governments provide the framework for a thriving industry, the economic benefits are felt by all.”
ACI-LAC’s director general, Rafael Echevarne, echoed these sentiments, stating that the Argentinian government's measures of openness and deregulation will result in benefits for all passengers.
Argentina’s Secretary of Transportation, Franco Mogetta, told delegates that the desire of the current administration is to “let the private sector do what they know best”, a policy which would result in less interference from the state in how airports operate and facilitate procedures.
More than 75 airport members representing 265 airports across 54 African countries attended the event, which had the theme of ‘Flying Together: Airport Collaboration and Partnerships’.
ACI EUROPE has released a new study The Economic and Social Impact of European Airports & Air Connectivity
The study, conducted by SEO Amsterdam Economics, independently documents the contribution of the airport industry to the European economy. It also, for the first time, quantifies its positive relationship with a diverse range of societal benefits enshrined in the United Nations Sustainable Development Goals.
The SEO Amsterdam Economics study reveals that:
• Europe’s airports and the air connectivity they enable generate 14 million jobs and €851 billion in GDP (5% of entire European GDP) each year.
• Every 10% increase in direct air connectivity yields a 0.5% increase in GDP per capita and 1.6% increase in jobs.
ACI EUROPE’s director general, Olivier Jankovec, commented: “The extensive analysis and data clearly show that what sets airports and the aviation ecosystem apart from most other sectors is their ability to facilitate and support wider economic activities.
“This results in increased trade and productivity, along with greater investments, tourism activity and increased employment rates overall. This specific ability clearly boosts overall national and European economic performance — and only means one thing: that airports and air connectivity are irreplaceable drivers of competitiveness for Europe.”
The report was unveiled at ACI EUROPE’s Airport Economics Symposium in Brussels in October.
Delivering the keynote speech at the event, Enrico Letta, president of the Jacques Delors Institute and former Prime Minister of Italy, said: “Air connectivity is one of the fundamental pillars of European integration and cohesion, and indeed the future of our EU Single Market depends very much on the resilience and effective decarbonisation of our transport systems.
Participants included Mpumi Mpofu, CEO of Airports Company South Africa (ACSA); Ali Tounsi, secretary general of ACI Africa; Justin Erbacci, director general of ACI World; Emanuel Chaves, ACI Africa president; and Nkosindiphile Xhakaza, Mayor of Ekurhuleni.
James Mlawu, South Africa’s Director-General of Transport, representing the Minister of Transport, underscored the importance of collaboration between government and industry stakeholders in advancing aviation across Africa.
As always, the conference addressed critical topics in airport management, including technology innovation, safety, environmental sustainability, and regulatory models.
Notable workshops included discussions on airport growth strategies led by Lufthansa Consulting; operational efficiency through technology, (SITA); sustainability and wildlife conservation (WWF); and workforce development (Strikitsa Consulting).
Participants also engaged in a hands-on session on Rescue and Firefighting Practices at OR Tambo International Airport, hosted by Airports Company South Africa.
ACI Africa notes that the event provided a vital platform for aviation professionals to exchange knowledge, build partnerships, and explore solutions that will shape the future of African air travel.
“By highlighting the far reaching benefits linked to our airport infrastructure, the study released today by ACI EUROPE tells us we need more than just to safeguard our Single Aviation Market, but also to make sure it supports and enables our green growth trajectory”.
15-17 April 2025
New Delhi, India
ACI-NA has celebrated its 10th year of participation in the Airport Carbon Accreditation programme, with nearly 90 North American airports to date gaining various levels of accreditation in the initiative designed to mitigate aviation’s impact on the environment.
“Airport sustainability is more important than ever as we work to reduce our environmental impact while still maintaining exceptional service and operations,” said ACI-NA president and CEO, Kevin Burke.
“Now celebrating 10 years of action in reducing the airport industry’s carbon footprint, we are delighted to recognise the hard work of nearly 90 North American airports that have joined, renewed, or upgraded their Airport Carbon Accreditation this year.
“Their efforts help set our industry on a path towards further sustainability and to eventually achieve our goal of carbon neutral.”
Today, more than 60% of the travelling public in North America travel through an accredited airport.
ACI Asia-Pacific & Middle East stresses importance of economic sustainability and financial resilience for infrastructure
At the 59th Conference of Directors General of Civil Aviation, Asia and Pacific Region in Cebu, Philippines, ACI Asia-Pacific & Middle East stressed that economic sustainability and financial resilience will be critical components for the capacity enhancing infrastructure needed across the region in the coming decades.
With Asia-Pacific set to handle 40% of global passengers by 2042, an estimated $1.3 trillion in investment is needed to ensure that the region’s airports are capable of meeting the huge rise in demand over the coming decades.
ACI Asia-Pacific & Middle East’s director general, Stefano Baronci, said: "With the Asia-Pacific region driving the global growth in air travel, investing in modern, efficient, and sustainable airport infrastructure is no longer an option – it has become a necessity.
“As airports continue to play a crucial role in the socio-economic development of their regions, they must be equipped to meet growing demand while maintaining financial viability for decades to come.
“At the same time, as the industry evolves, we must also prioritise enhanced safety, explore innovative ways to strengthen aviation security, promote diversity, and inclusion, and greater sharper focus on environmental sustainability."
ACI Asia-Pacific & Middle East notes that it was encouraging to see the conference urge states to support airport operations and infrastructure investment.
In addition, ICAO called for States to engage in ACI’s Net Zero Roadmap programme for sustainable airports and adopt safety culture indicators to strengthen safety assessments.
2024
November 10-12
ACI-LAC Annual Assembly, Conference & Exhibition Guadalajara, Mexico
ACI World
Justin Erbacci
Director General
1500-800 rue du Square Victoria Montréal, Québec, H4Z 1G8
Canada
Tel: +1 514 373 1200
Fax: +1 514 373 1201 aci@aci.aero www.aci.aero
2024
November 26-28
Airports Innovate Rome, Italy 2025 April 15-17
ACI Asia-Pacific & Middle East Regional Assembly, Conference & Exhibition New Delhi, India
ACI Africa
Ali Tounsi
Secretary General
Casablanca, Morocco
Tel: +212 660 156 916 atounsi@aci-africa.aero www.aci-africa.aero
ACI Asia-Pacific & Middle East
Stefano Baronci
Director General
Hong Kong SAR, China
Tel: +852 2180 9449
Fax: +852 2180 9462
info@aci-asiapac.aero www.aci-asiapac.aero
ACI Europe
Olivier Jankovec
Director General
Brussels, Belgium
Tel: +32 (2) 552 0978
Fax: +32 (2) 502 5637 danielle.michel@aci-europe.org www.aci-europe.org
ACI Latin America & Caribbean
Rafael Echevarne
Director General
Panama City, Panama
Tel: +507 830 5657/58 info@aci-lac.aero www.aci-lac.aero
2024
November 5-6
The Trinity Forum Ho Chi Minh City, Vietnam
ACI North America
Kevin Burke President & CEO
Washington DC, USA
Tel: +1 202 293 8500
Fax: +1 202 331 1362
postmaster@aci-na.org www.aci-na.org
Airports Council International (ACI), the trade association of the world’s airports, is a federated organisation comprising ACI World, ACI Africa, ACI Asia-Pacific & Middle East, ACI EUROPE, ACI Latin America-Caribbean and ACI North America. In representing the best interests of airports during key phases of policy development, ACI makes a significant contribution toward ensuring a global air transport system that is safe, secure, efficient, and environmentally sustainable. As of May 2024, ACI serves 814 members operating 2,110 airports in 169 countries.
With soaring traffic figures, an ambitious new investor and plans to become the first transfer hub in the Philippines, these are exciting times for Mactan Cebu International Airport, writes Joe Bates.
Air traffic is on a huge growth trajectory in the Philippines and Mactan Cebu International Airport (CEB) is no exception to the rule, with passenger numbers soaring by an incredible 81% last year to just over 10 million.
The impressive numbers ensure that CEB is already the second busiest airport in the country, and it will cement that status this year with traffic expected to rise by 20% to return to pre-pandemic levels of around 12 million passengers per annum.
Domestic travel accounted for 75% of all passengers handled at the airport last year, while the South Korean market fuelled international traffic, making up 40% of 2.5 million passengers that arrived or departed on international services in 2023.
There are, of course, a number of reasons for the healthy upturn in traffic at CEB, but arguably among the most important are the impetus given to it by new shareholder Aboitiz InfraCapital, and its flourishing partnership with homebased carrier Cebu Pacific.
The airport’s route development team must also take a lot of credit for its current success as the country’s main gateway to the Central Visayas region is currently served by 20 airlines, which between them operate flights to 26 domestic and 12 international destinations from CEB.
These currently include 66 weekly flights to Seoul-Incheon and more than 20 services per week to Hong Kong, Tokyo, Busan, Singapore and Chinese Taipei.
With South Korea being one of its key markets, it is perhaps not surprising to find that South Korean carriers have a strong presence at CEB. They include Asiana, Jeju Air, Jin Air, Korean Air and T’way Air.
Emirates and Eva Air also serve Mactan Cebu International Airport, as do regional low-cost carriers Scoot and Tigerair Taiwan.
The impressive number of airlines and destinations served from CEB – located on an 800-hectare site in Lapu-Lapu City – led to the gateway winning a prestigious award at Routes Asia earlier this year for its “exceptional contributions to airport and destinations marketing in the Asia-Pacific region”.
Speaking at the ACI Asia-Pacific & Middle East/ACI World Annual General Assembly, Conference and Exhibition in Riyadh earlier this year, CEB CEO, Athanasios Titonis, said: “We are delivering something new in the Philippines. We [Mactan Cebu] will be the first transfer hub in the Philippines, a development we hope will provide the catalyst for growth in both international and domestic air travel.
“Domestic tourism has huge potential for us. We currently handle around eight million domestic passengers a year, of which 2.5 to 3 million are tourists. The plan is to work closely together with Cebu Pacific to develop our D to D [domestic to domestic] activity based on minimum connection times of around 35 minutes.
“We also aim to work with Cebu Pacific and the other airlines to reduce our minimum connection times for international services with onward connections to the other [Philippine] islands to just 45 minutes.”
Regarding future route development, Titonis reveals that his airport is actively exploring opportunities beyond Asia. In fact plans are underway to develop routes in markets such as India, Russia, Australia, and the United States, among others.
The airport is operated by the Aboitiz InfraCapital GMR Cebu Airport Corporation (AGMCAC) on behalf of Mactan-Cebu International Airport Authority.
It replaced predecessor, GMR–Megawide Cebu Airport Corporation (GMCAC) – a joint venture between Indian global airport operator, GMR Airports Limited, and local company Megawide Construction Corporation – in September 2022, when the Philippine infrastructure investment group, Aboitiz InfraCapital (AIC), acquired a 33.3% stake in the former operator with a clause to purchase the remaining shares in the company on October 30, 2024.
At this point it is worth noting that GMCAC, which took over the responsibility for operating and developing Mactan Cebu in 2014, has arguably been one of the most successful concessions in the region based on its transformation of the airport.
It has, for example, invested hundreds of millions of dollars on enhancing and modernising the airport, with upgrades including the renovation and expansion of Terminal 1, the 2018 opening of CEB’s impressive new Terminal 2, and early 2024 completion of a second runway.
At the time of the AIC deal in September, 2022, BDO Capital and Investment Corp president, Eduardo Francisco, was quoted by Inquirer.net as stating that the equity infusion would bode well for GMCAC as it “provides it with more financial muscle, with a higher capitalisation, bigger balance sheet and an improved gearing ratio.”
He added that it also paved the way for the entry of another experienced and strong industry player as Aboitiz’s airport portfolio includes the New Bohol-Panglao International Airport and Laguindingan International Airport in the Philippines.
A statement from Aboitiz InfraCapital declared that the deal would “propel Mactan Cebu International Airport to the next level and establish its status as the Philippines’ premier international airport.”
Indeed, AIC’s president and CEO, Cosette Canilao, remarked: “We look forward to working side by side with our partners in further developing the Mactan-Cebu International Airport into a world class airport.
“The goal is to propel MCIA to the next level and establish its status as one of the Philippines’ premier international airports.”
While Rafael Aboitiz, AIC vice president-head for airports business, noted: “Mactan Cebu International Airport is more than just an airport, it’s a vital gateway to Cebu and the Philippines. Every passenger who travels through our doors drives economic growth, fosters closer cultural connections, and enriches themselves with the beauty and wonder of the Philippines.”
A potential example of what the future might hold for the airport under IAC was revealed earlier this summer when he shared plans for a study to investigate the potential development of a new mall and hotel at CEB as part of their long-term ambitions for the gateway.
Titonis certainly has no doubt that Aboitiz InfraCapital’s investment and involvement in Mactan Cebu will help the airport achieve new levels of success over the coming years.
He says: “We have ambitious goals that drive us toward our vision of becoming the world-class tourism and transfer gateway to the Philippines, with Cebu's strategic central location giving us a unique advantage.
“To achieve this, we aim to tap into new and emerging markets through our diverse offerings. Our exceptional staff, the heart of our operations, combined with advancements in technology, will allow us to enhance efficiency and continue raising the bar for an outstanding passenger experience.”
Providing top quality customer service at the airport is important to Titonis and his management team, which is one of the reasons he is so delighted at Mactan-Cebu International Airport achieving Level 2 status in ACI’s Airport Customer Experience Accreditation programme.
The new milestone, achieved this summer, follows last year’s historic achievement when CEB became the first airport in the Philippines to receive Level 1 accreditation, setting a new benchmark for excellence.
The Level 2 accreditation, of course, acknowledges CEB’s effective customer experience strategy in managing daily operations and maintaining high customer satisfaction.
“Year after year, we refine our customer experience strategies by leveraging innovation and engaging in consultations with passengers and other stakeholders,” says AGMCAC’s customer experience head, Ricia Montejo.
“Apart from the warm and inviting culture that the airport practices towards its passengers, we gather representatives from different age groups to seek their ideas and understand their sentiments, which are relevant in enhancing the overall airport experience.”
While Mactan-Cebu Airport Authority’s general manager, Julius Neri, enthuses: “A clear and proven strategy that meets global standards is at the core of our operations.
“We ensure smooth movements are facilitated daily in the airport and create and manage long-term plans that put our customers first.”
This accolade was followed by the August 2024 award of a 4-Star Skytrax rating for Terminal 2, which judged the facility for the overall efficiency of its staff, hospitality, service consistency, and language proficiency.
Skytrax itself said that the rating is testament to CEB’s commitment to delivering a top-tier passenger experience, underpinned by exceptional service and product quality.
Reflecting on the award, Titonis says: “The dedication of our airport staff plays a crucial role in our operations. Kudos to our team for their outstanding performance.
“We are committed to going the extra mile to ensure the comfort and safety of our passengers.”
Montejo simply notes that “providing friendly and efficient service is at the core of our commitment to passengers”. She adds: “We achieve this by conducting training programmes that meet global customer service standards.”
The airport operator is equally committed to protecting the planet and supporting its neighbouring communities by ensuring CEB’s sustainable and responsible development. This dedication is reflected in the recent achievement of gaining Level 1 ‘Mapping’ status in ACI’s Airport Carbon Accrediation programme.
Titonis enthuses: “Achieving Carbon Neutrality is a long journey that requires time, dedication, and innovation in our approach to reducing carbon emissions.”
He notes that Mactan Cebu is fully onboard with embracing electrical vehicles as aviation transitions away from using fossil fuels to power ground vehicles and equipment at airports in line with the industry’s net zero CO2 emissions target.
The CEO is also quick to point out that solar panels across the airport site will supply 12% of CEB’s energy by the end of the year, and dangles the carrot that the gateway might host a “lighthouse project” in the future, possibly involving the use of hydrogen.
Its ‘coastal clean-up’ initiative recently won the top Platinum Award in ACI Asia-Pacific and Middle East’s Green Recognition 2024 programme for airports handling between 8-15mppa.
The airport is also pioneering the use of aircraft on-the-ground power solutions such as the Fixed Power Unit (FPU) and Pre-conditioned Air (PCA) services to reduce carbon emissions and offset fuel costs upon boarding and arrival of passengers.
The FPU is an eco-friendly ground power system that enables aircraft to connect directly to a stationary, electricity-powered energy source
while parked at a contact stand. Additionally, PCA is an external device used for cooling and dehumidifying, delivering fresh, preconditioned air to the aircraft and jet bridges between flights.
Crucially, home carrier Cebu Pacific supports the initiative, its president and CEO, Xander Lao, noting: “Cebu Pacific fully supports Mactan Cebu International Airport’s ground equipment solutions initiative.
“This represents a crucial step forward in creating a sustainable future for Philippine aviation. By being the first airline to use this technology at Mactan Cebu, we are not only reducing our carbon emissions but also setting a benchmark for the industry.”
The airport began this particular sustainability initiative in 2020 with the initiation of FPU and PCA services through Bridge Mounted Equipment (BME). Despite pandemic-related delays, it obtained in principle approval from airline partners for the initiative in in the fourth quarter of 2019 and is now moving forward with implementation.
As a result, the airport installed FPU and PCA units under passenger boarding bridges, ensuring easy access for aircraft. This shift is expected to reduce fluctuating fuel costs, APU maintenance costs, CO2 and NOx emissions, airport noise levels, and improve operational safety.
“Airlines could potentially see a cost reduction of 40% to 60% by transitioning to BME services at Mactan Cebu International Airport,” enthuses Titonis.
“With the multiple benefits of BME services, we are confident in the support of our airline partners to implement these sustainable solutions at MCIA. Together, we can reduce our environmental impact and pave the way for a greener future in aviation.”
And in what is being described as a “significiant milestone”, the airport recently signed a Memorandum of Understanding to become the first gateway to take part in a new programme designed by ACI Asia-Pacific & Middle East to help airports establish a comprehensive framework on environmentally sustainable initiatives to achieve their net zero emissions goals.
ICAO president, Salvatore Sciacchitano, and secretary general, Juan Carlos Salazar, were present at the signing of the MoU, which took place at 59th Conference of Directors General of Civil Aviation, Asia and Pacific Region, in Cebu, in mid-October.
As a result of the agreement, through its Net Zero Roadmap – a programme endorsed by Airport Carbon Accreditation – ACI Asia-Pacific & Middle East will provide strategic guidance to support the airport’s sustainability journey.
This on-demand service, which is separate to the Airport Carbon Accreditation programme, will help airports create structured plans, including carbon footprint projections, governance frameworks, and recommendations across areas like assets, fuels, and operations.
The programme also offers guidance on CAPEX planning, implementation strategies, and offsetting measures, while connecting airports with global financial institutions for potential funding.
Titonis believes that the MoU reaffirms his commitment to establishing Mactan Cebu as a benchmark for sustainability among Philippine airports.
“We are proud to be at the forefront of advancing sustainability in Filipino airports. While we recognise there is still much work ahead, our partnership with ACI Asia-Pacific & Middle East gives us confidence that our initiatives will leave a meaningful, long-lasting impact on the environment,” notes Titonis.
“We aspire to inspire other airports across the Philippines and Asia to follow suit. Together, we can drive sustainable tourism, ensuring that destinations worldwide offer enriching and responsible experiences for generations to come.”
Neri is confident that the partnership with ACI will significantly accelerate CEB’s sustainability efforts, ensuring that the airport reaches the highest level of efficiency in achieving its environmental goals.
“Our success has always been driven by strong synergies, most notably our collaboration with our private operator, Aboitiz InfraCapital GMCAC,” he says.
“Together, we have cultivated an airport ecosystem that consistently demonstrates its effectiveness. With ACI now joining us on our sustainability journey, we are confident that their expertise will bring valuable insights and further elevate our efforts toward creating a more sustainable future.”
The MoU for Net Zero Roadmap programme will support the airport in progressing to Level 5, the highest level of the Airport Carbon Accrediation programme. Achieving Level 5 will require the airport to maintain a net zero carbon balance for Scope 1 and 2 emissions, while actively addressing Scope 3 emissions. AW
Joe Bates discovers more about the ambitions, development strategies and networks of six of the world's biggest global airport operators – Aena, Corporación América Airports, Fraport AG, Groupe ADP, TAV Airports and VINCI Airports.
Aena/Aena Internacional
World Headquarters: Madrid, Spain
Airports 100% owned and operated: Aena operates 46 airports and two heliports in Spain including Adolfo Suárez Madrid-Barajas and Barcelona El Prat airports.
Others: Aena Internacional has interests in 33 airports in Brazil, Colombia, Jamaica, Mexico and the UK.
In the UK, Aena has a controlling 51% shareholding in London Luton Airport. In Colombia, it has a 50% stake in Aerocali, operator of Cali’s Alfonso Bonilla Aragón International Airport (CLO); and in Mexico, it has a 33.4% interest in Aeropuertos Mexicanos del Pacífico (AMP), which operates 12 Mexican gateways that include Tijuana, Guadalajara, Hermosillo, La Paz, San José de Cabo and Puerto Vallarta on behalf of Grupo Aeroportuario del Pacífico (GAP).
In Jamaica, through AMP’s 15% interests in GAP, it has a controlling 74.5% interest in MBJ Airports Limited, which operates Sangster International Airport in Montego Bay, and holds a 25 year concession agreement for Kingston’s Norman Manley International Airport.
In Brazil, through Aena Brasil, the company holds a 30 year concession to operate and develop six airports (Recife, Maceió, Aracajú, Campina Grande, João Pessoa and Juazeiro do Norte) in the north east of the country; and a similar length concession for São Paulo’s Congonhas Airport and ten other gateways across São Paulo, Mato Grosso do Sul, Minas Gerais and Pará states.
The concessions, the latter one commonly referred to as the Bloco de Onze Aeroportos do Brazil (BOAB) group of airports, ensure that Aena is the biggest private airport operator in Brazil, its 17 airports accounting for around 20% of all air traffic.
Plans to expand/reduce portfolio: No information provided.
News: Aena handled 172.7 million passengers across its global network in the first half of 2024. Its 11 airports in Brazil contributed €91.1 million in revenue and €50.4 million to the group’s EBITDA during the six month period. Aena Internacional’s interests in Colombia’s Rafael Núñez International Airport in Cartagena de Indias ended on February 29, 2024, when SACSA’s concession for the airport came to an end.
Aena’s international success story
Aena reports that it “consolidated and maximised the value” of its international assets in 2023, which represented around 6.7% of the group's EBITDA in 2023.
In terms of successes, it notes that in 2023 Aena raised the capacity of London Luton Airport to 19 million passengers per annum and took over the concession for the BOAB group of airports in Brazil, which includes São Paulo’s Congonhas Airport, after being awarded the concession in 2022.
Aena states that when it comes to developing its international business, its “priority objective is the consolidation of current international assets”, noting that its “non-binding goal is for international activity to represent 15% of EBITDA in 2026”.
Generating value for its shareholders is always another key consideration for the company when looking at new expansion opportunities.
Looking forward, Aena notes that it has upwardly revised its traffic forecasts for 2024 as it expects to handle 300 million passengers across its global airport network this year.
Its newly updated Strategic Plan 2022-2026 reveals that its goals for the period include striving to maintain its leading position on safety and efficiency; looking to “significantly increase” its revenues; and to grow by means of diversification (by expanding international activity and developing airport cities), always with sustainability and innovation as overarching factors in its growth.
World Headquarters: Luxembourg
Airports 100% owned and operated: None
Others: Registered as CAAP on the New York Stock Exchange, Corporación América Airports has an 82.7% stake in Aeropuertos Argentina (AA2000), which operates 35 airports across the country, including Ministro Pistarini International (EZE) and Aeroparque-Jorge Newbery International (AEP) airports in Buenos Aires.
Elsewhere in Argentina, CAAP operates and has 82.6% and 74.5% stakes respectively in the Patagonian airports of Bahia Blanca and Neuquén, which are not part of AA2000's group of airports.
In Uruguay, through wholly-owned subsidiary, Puerta del Sur (PdS), CAAP manages Montevideo–Carrasco International Airport (MVD) and six regional airports serving the cities of Rivera, Salto, Carmelo, Durazno, Melo and Paysandú. As part of the deal for the regional airports, the PdS concession was extended for an additional 20 years in November 2021. Elsewhere in Uruguay, through subsidiary CAISA, CAAP operates Laguna del Sauce/Punta del Este International Airport (PDE).
In Brazil, through sister company Inframérica, it has a controlling 51% stake in Brasilia’s Presidente Juscelino Kubitschek International Airport (BSB), where state owned Infraero is the only other shareholder.
In Ecuador, CAAP operates Guayaquil’s José Joaquín de Olmedo International Airport (GYE) because of its 50% stake in the TAGSA consortium, and through 100% owned subsidiary, ECOGAL, runs Seymour/Baltra Airport in the Galapagos Islands.
Further afield, in Armenia, through fully-owned subsidiary Armenia International Airports CJSC, CAAP manages Yerevan’s Zvartnots International Airport (EVN) and Shirak International Airport (LWN) in Gyumri. And in Italy, through subsidiary Toscana Aeroporti S.p.A, it has a controlling 46.7% stake in Tuscany’s Pisa–Galileo Galilei (PSA) and Florence–Amerigo Vespucci (FLR) airports.
Plans to expand/reduce portfolio: CAAP currently operates 52 airports in six countries, which between them handled 81.1 million passengers in 2023. It notes that it is always looking to expand its airport portfolio.
News: In January, 2024, the company received R$610.4 million in compensation for the, “friendly termination” of its concession for Rio Grande de Norte/São Gonçalo do Amarante–Governador Aluízio Alves International Airport (NAT) in Natal, Brazil. CAAP notes that the process was carried out in strict compliance with Brazilian law and the country’s regulatory framework, and fully co-ordinated with all Brazilian authorities.
More recently, in May, 2024, 100% owned subsidiary CAISA signed a 10 year extension to its concession for Laguna del Sauce/Punta del Este International Airport in Uruguay, and will now operate the gateway until at least 2043.
May proved to be busy for CAAP as during the month it also received notification from the International Centre for Settlement of Investment Disputes (ICSID) that the Peruvian government should pay it $91.2 million in damages following the termination of its concession to operate Chinchero International Airport, which is expected to replace Cuzco’s Alejandro Velasco Astete International Airport. The tribunal found that Peru had breached the concession agreement by ending it without proving that the decision was taken in the public interest.
Fraport AG/Frankfurt Airport Services Worldwide World Headquarters: Frankfurt, Germany
Airports 100% owned and operated: Frankfurt Airport in Germany.
Others: Through its 73.4% majority stake in Fraport Greece, Fraport AG operates 14 regional airports in Greece that include Thessaloniki, Aktion and Kavala on the mainland and the island airports of Kerkyra/Corfu, Chania/Crete, Kefalonia, Kos, Mykonos, Rhodes and Santorini.
Elsewhere in Europe, Fraport has a contract to manage, operate and develop Ljubljana Jože Pučnik Airport (LJU) in Slovenia until 2054; holds a majority 60% shareholding in the Fraport Twin Star Airport Management AD consortium responsible for running Bulgaria’s Black Sea gateways of Burgas and Varna; and owns 51% of Fraport TAV Antalya, the terminal operator at Antalya Airport in Turkey.
In Latin America, Fraport has a controlling 80.1% interest in Lima Airport Partners (LAP), which operates and develops Jorge Chavez International Airport in Lima, Peru, and holds long-term 25 and 30-year concessions respectively to manage and develop Fortaleza and Porto Alegre airports in Brazil.
Other international assets include 100% ownership of Fraport USA, which manages the former Airmall concessions at Cleveland and Baltimore/Washington airports and manages the concessions space at Nashville, New York-JFK (Terminal 5), Newark-Liberty (Terminal B), Washington Dulles, and Ronald Reagan Washington airports.
Fraport is also a minority partner (18.75%) in Tradeport Hong Kong Ltd, operator of a high-tech logistics centre at Hong Kong International Airport.
Plans to expand/reduce portfolio: Fraport says that it continues to look for opportunities to grow its global airport network while driving the organic growth of its existing portfolio through major infrastructure developments, such as those in progress at its airports in Germany, Peru and Turkey.
News: Fraport AG recently announced the divestment of its 10% stake in Delhi International Airport Limited, the operator of Delhi’s Indira Gandhi International Airport in India, to GMR Airports Infrastructure Limited (GIL) for $126 million. The transaction is scheduled for conclusion in Q1 2025.
Reflecting on the deal, Fraport CEO, Dr Stefan Schulte, said: “After a successful 18-year partnership driving impressive growth in Delhi, it’s time to start a new chapter.
“We look back with pride on the various milestones we’ve achieved together with GIL. We jointly upgraded and expanded Delhi Airport into one of Asia’s leading air transportation hubs.”
Fraport AG continues to have a global focus Fraport’s head of acquisitions and investments, Holger Schaefers, remains positive about the future potential of the group’s international assets, despite admitting that global events made 2023 a challenging year for the company.
“Last year presented significant challenges for the aviation industry, particularly across Europe, such as airspace restrictions due to the ongoing war in Ukraine," said Schaefers. "However, despite these difficulties, we witnessed a remarkable recovery in traffic across most of the airports in our international portfolio.
“The demand within the touristic segment was especially impressive. Fraport Greece surpassed pre-COVID passenger numbers, with traffic figures up by 12% compared to 2019. Similarly, Antalya Airport [in Turkey] achieved an exceptional recovery, reaching 101% of its 2019 levels.”
Has Fraport’s strategy/philosophy for developing its international business changed at all since COVID? Schaefers says: “We are, and always will be, a strategic investor with a long-term vision, seeking investment opportunities where we can leverage our expertise to create value.
“In most cases, this involves airport infrastructure, operations, commercial performance, as well as HR, governance, and strategic matters. This investment philosophy proved particularly successful during the COVID-19 pandemic.
“Going forward, we aim to collaborate with strong partners who can add value to our projects through complimentary knowledge and unique characteristics.”
When it comes to the potential future expansion of Fraport's international business, he notes that the company continues to focus its attention on “growth markets” rather than specific countries and territories.
“We evaluate investment opportunities on a case-by-case basis, focusing on their strategic fit and growth potential,” says Schaefers.
“Certain geographic regions, such as Asia, the Americas and Southern Europe, generally exhibit higher traffic growth compared to Western Europe. However, these trends serve merely as indicators. Each opportunity is meticulously assessed on its own merits.”
Schaefers admits that the diverse make-up of Fraport’s global airport portfoilio means that it has faced a number of different operational challenges ths year.
“Our portfolio of airports is highly diverse, encompassing tourist and regional gateways as well as major hubs. It is also widespread geographically. As a result, the key challenges we face are equally varied.
“At Antalya Airport and in Lima, for example, our primary focus is on completing significant infrastructure expansion projects on time. In Porto Alegre, the worst flooding in its history has impacted our airport infrastructure, necessitating a focus on rebuilding efforts. Our goal is to reopen the airport in two phases, starting on October 21.
“In Europe, we have seen capacity issues with Eurocontrol throughout this summer, resulting in delays and putting pressure on airlines and airports. In addition, the limited availability of aircraft and crew remains a decisive factor affecting passenger growth.”
As a general rule, does he believe that the terms of airport concessions need to be more flexible to take into account both upturns and downturns in the industry?
“Considering the characteristics of the past decade, it appears that the volatility within the aviation industry has generally increased, and this heightened perception of risk will likely influence future investment opportunities, affecting both pricing and principal investment decisions,” responds Schaefers.
“To address these challenges and attract greater interest, going forward, more flexible concession agreements could serve as a solution to reduce complexities during concession periods.”
Groupe ADP – Aéroports de Paris (ADP)
World Headquarters: Tremblay-en-France, France
Airports 100% owned and operated: Groupe ADP owns and operates the three main airports serving Paris – Paris-Charles de Gaulle (CDG), Paris-Orly (ORU) and Paris-Le Bourget (LBG)
Others: Groupe ADP directly and indirectly manages a portfolio of 26 airports worldwide either as a shareholder and/or through service contracts.
Through its 46.12% stake in TAV Airports, Groupe ADP has interests in Ankara Esenboğa (100%), Antalya (51%, asset co-controlled by TAV), Izmir Adnan Menderes (100%), Milas Bodrum (100%) and Gazipasa (100%) in Turkey; Madinah in Saudi Arabia; and Monastir (100%) and Enfidah-Hamamet (100%) in Tunisia; Tbilisi (80%) and Batumi (76%) in Georgia; Skopje (100%) and Ohrid (100%) in North Macedonia; and Almaty (85%) in Kazakhstan.
In the Middle East, Groupe ADP has a controlling 51% shareholding in Airport International Group (AIG), operator of Amman’s Queen Alia International Airport in Jordan, and a 5% interest in MATAR, which operates and maintains the Hajj Terminal at King Abdulaziz International Airport in Jeddah, Saudi Arabia.
In South America, Groupe ADP has a 45% stake in the Nuevo Pudahuel consortium, which has a 20-year concession to operate and develop Santiago’s Comodoro Arturo Merino Benítez International Airport in Chile.
In Africa, Groupe ADP holds a 35% stake in Ravinala Airports, which holds the concession for Antananarivo and Nosy Be airports in Madagascar.
In India, Groupe ADP holds a 45.7% interest (composed of ordinary equity shares and preference shares OCRPS) in the newly listed GMR Airports Infrastructure Ltd (GIL) – formed by the merger GMR Airports Ltd (GAL) and the old GMR Infrastructure Ltd (GIL). The new GIL holds controlling stakes in Indira Gandhi International Airport (New Delhi), Rajiv Gandhi Airport (Hyderabad), Manohar Airport (Goa) and the under construction Alluri Sitarama Raju International Airport (Bhogapuram).
Outside of India, GIL has shareholdings in Kualanamu International Airport in Medan, North Sumatra province, Indonesia; and the consortium responsble for developing Kastelli International Airport, which is currently under construction in Heraklion, Greece. Elsewhere in Europe, Groupe ADP has interests in Liege Airport (25.6%) in Belgium and Zagreb’s Franjo Tuñman Airport in Croatia through its 20.8% stake in Zagreb Airport International Company (ZAIC).
In the US, it is part of the Future Stewart Partners joint venture responsible for operating and maintaining the terminal at New York Stewart International Airport. Groupe ADP also holds a 39.66% stake in Embassair, a fixed base operator (FBO), which signed a 35-year lease to operate a business aviation terminal at Miami Opa-Locka Airport.
Plans to expand/reduce portfolio: By developing a multi-local approach, Groupe ADP continues to review opportunities to expand its global footprint both in terms of equity and non-equity assets. Its international positioning is driven by synergies, complementary geography and exposure to growth between Groupe ADP in its own right, TAV Airports and the new GIL. Including its overall activities and different subsidiaries, Groupe ADP is active at around 120 airports in 50 countries.
News: Talking about Groupe ADP’s interests in newly restructured GMR Airports Infrastructure Ltd (GIL), Groupe ADP CEO, Augustin de Romanet, said: “The merger of GMR Airports into a listed GMR Airports Infrastructure is a major new step after the fulfilment of Groupe ADP's acquisition of a stake in GMR Airports four years ago, revealing its intrinsic value and ensuring its liquidity.
“Due to the merger, the Indian airport holding simplifies its capital structure, enhances its visibility and agility, and puts itself in the best position to continue to support traffic growth in its assets, pursue its ongoing airport projects and seize relevant development opportunities in Asia.
“In line with its strategy, Groupe ADP is determined to serve the interests of its stakeholders through a unique global and multi-local airport network driven by a shared ambition for decarbonisation."
Groupe ADP’s global approach
Groupe ADP’s deputy CEO, Edward Arkwright, tells us more about the growth and development of Groupe ADP’s global airport network.
How did your international assets perform in 2023 and were there any standout performers or underachievers?
We handled around 336.4 million passengers across our global network in 2023, which was in line with our expectations. The total was very close to pre-pandemic levels across the group, with the most dynamic recovery coming from our international assets.
TAV’s Turkish airports reached 93.8% of 2019’s traffic, driven by strong international traffic. Other airports belonging to TAV Airports are at 114.9%, with a solid contribution from Almaty, in Kazakhstan.
As for GMR’s airports, they are at 106.3% of 2019’s traffic levels in India, with strong growth in domestic traffic and nearly full recovery of international traffic. In Amman, Jordan, passenger numbers at Queen Alia International Airport have exceeded 2019’s traffic levels by 3.1%.
What is your strategy/philosophy for developing your international business and has this changed at all since COVID?
If anything, the pandemic has sharpened our focus on the importance of our international assets as having such a diverse portfolio means that we are not so dependent on one particular country or market. This advantage has strengthened the group’s resiliency and ability to adapt to different business conditions, ensuring that we were in a stronger position than some to take advantage of opportunities during aviation’s recovery from COVID.
Having such of a diverse network also makes it easier to benefit from real-time and live information on global traffic and to adjust to the evolving expectations of airlines and passengers.
The development of our international activities is governed by the quantified objective of stabilising concessions with an average maturity of 30 years.
Based on our experience of operating airports, Groupe ADP, of course, gives priority to developing our capital investments. We are, however, in a unique position in that Groupe ADP is present across the entire airport value chain and therefore does much more than just invest and manage infrastructure. We are very active on the retail and hospitality side, for example, and look to drive IT innovation across the airport campus.
Having a global network also helps in our efforts to increase connectivity at our airports, with a key post-pandemic objective of our 2025 Pioneers vision being the launch of 100 additional international routes by 2025.
Do you have key focus areas in terms of expanding your international assets?
Groupe ADP’s strategy is to develop a well-balanced portfolio in terms of exposure, with a specific focus on promising regions showing significant growth potential due to their continued economic development, the growth of the middle classes, and the propensity to travel.
Geography also comes into it as we ideally consider potential targets that complement the existing assets of Groupe ADP, TAV Airports and GMR Airports Infrastructure. TAV has a strong presence in the Middle East, Central Asia, Eastern Europe, Maghreb [western and central north Africa] and English-speaking Africa. GMR is present in South and South-East Asia; and Groupe ADP has mature assets in Europe and North America and in emerging countries in Latin America and French-speaking markets in Africa.
What do you see as the key challenges for your airports in 2024 and beyond?
The guiding core values of Groupe ADP are hospitality and responsibility. These will always be a top priority as we face a number of key challenges that include climate change, and more generally, environmental issues. Energy issues, the evolution of traffic dynamics, and debates around the development and future of the air transport industry are also profoundly transforming the airport sector.
To face these challenges, Groupe ADP is preparing the airport of tomorrow inline with our 2025 Pioneers roadmap based on three pillars: – One ambition: Imagining the sustainable airport of tomorrow, which offers a seamless journey, innovative services and an original travel experience, on modular and sustainable airport platforms, true multimodal and energy hubs.
– One group: Building a global group, integrated and responsible, which enhances and integrates the regions, and mobilises expertise and multiplies it to consolidate the network.
– Shared dynamic: Innovating, supporting and empowering teams that share a culture of innovation and responsibility within a group that attracts and retains talent.
TAV Airports Holding World Headquarters: Istanbul, Turkey Airports 100% owned and operated: None.
Others: At home in Turkey, TAV Airports holds long-term concessions to operate and develop Ankara Esenboğa (2050), Izmir Adnan Menderes (2034), Milas-Bodrum (2037) Gazipasa–Alanya (2036) and Antalya (2051) airports, the latter being as part of a joint venture.
In North Macedonia, it has a contract to operate Skopje Alexander the Great and Ohrid St Paul the Apostle airports until 2032. Elsewhere in the region, TV is part of a consortium that holds the concession rights to operate Zagreb Airport in Croatia until 2042. It has controlling 80% and 76% stakes respectively in the companies responsible for operating Tbilisi and Batumi airports in Georgia. In addition, TAV operates commercial spaces at Riga International Airport in Latvia.
TAV Airports back on growth trajectory
CEO, Serkan Kaptan, has no doubt in stating that 2023 was a good year for TAV Airports with almost all the company’s international assets peforming well and some breaking new records.
“Almost all our international assets went above and beyond pre-pandemic levels in 2023, with the sole exception of Tunisia,” reveals Kaptan.
“Our flagship asset in central Asia, Almaty Airport, achieved an impressive 32% growth compared to the previous year, with 9.5 million passengers. Relaxed visa requirements for Hajj and Umrah visits resulted in a 49% growth in Madinah with 9.4 million passengers. North Macedonian, Georgian and Croatian operations all recorded double digit increases in passenger numbers.
“In north Africa, our Tunisian airports, Enfidha and Monastir, saw a 57% increase in traffic, but the totals remained below pre-pandemic levels.”
How big an impact has COVID had on TAV Airports’ strategy/ philosophy for developing its international business, and indeed willingness to undertake further investments?
“Very little. The strategy remains the same, we are targeting developing markets with a high-growth potential,” says Kaptan.
In Tunisia, TAV has the majority shareholding in and subsequently both Monastir Habib Bourgiba and Enfidha-Hammamet airports, and in Saudi Arabia the TAV-led Tibah consortium (TAV Airports and Al Rajhi Holding Group) has the concession rights to operate Madinah’s Prince Mohammad bin Abdulaziz International Airport until 2041.
Lastly, TAV Airports owns (85% shares) and has operated Almaty Airport in Kazakhstan since 2021.
Plans to expand/reduce portfolio: TAV Airports operates at 15 airports in eight countries today and continues to look at investment opportunities to expand its global interests, which including its services subsidiaries, and the airports of shareholder and strategic investment partner, Groupe ADP, extend to more than 120 airports in 50 countries worldwide.
News: TAV notes that Almaty Airport in Kazakhstan opened its new $200 million international terminal on June 1, 2024, and that it is also on track to complete investments in Antalya and Ankara in 2025. Passenger numbers across its global airport network increased by 17% in the first half of 2024 compared to the corresponding period a year ago.
“We are focusing on opportunities in central Asia, eastern Europe, the Middle East and, selectively, in Africa.
“The long-term forecasts by aircraft manufacturers and industry associations point to the fact that the centre of gravity will continue shifting east. There is a strong correlation between GDP and the propensity to fly. Therefore, we believe that the growth in developing markets will be higher there than the global average.”
As a general rule, does he believe that the terms of airport concessions need to be more flexible to take into account both upturns and downturns in the industry?
Kaptan says: “Airport projects are long-term, strategic investments. Although we are confident that the industry will continue its growth over the long-term, it is never a straight walk. Flexibility and long-term thinking can certainly increase investor appetite and the resiliency of airports in times of crisis.”
In terms of what he views as the key challenges for his global airport portfolio in 2024, Kaptan believes that we are going through a period of “so-called poly-crisis”, which he says is damaging the idea of long-term thinking.
“Geopolitical and economic risks will continue to be the key challenges facing travel and the airport industry this year, and I expect this to continue for the forseeable future,” adds Kaptan.
World Headquarters: Nanterre, France Airports 100% owned and operated: Belfast International Airport in the UK.
Others: At home in France, a VINCI Airports-led consortium has a 60% stake in Aéroports de Lyon (ADL), operator of Lyon-Saint Exupéry and Lyon-Bron. It also manages the French gateways of ClermontFerrand Auvergne, Chambéry Savoie Mont Blanc, Grenoble Alpes Isère, Toulon Hyères and Ancenis (courtesy of mid-to short-term contracts), Nantes Atlantique and Saint-Nazaire Montoir (through an 85% stake and long-term concession), and Rennes Bretagne and Dinard Bretagne due to a 49% interest in the consortium responsible for operating the airports until 2024.
In Europe, VINCI Airports holds a 50-year concession to operate, build and develop the 10 Portuguese airports of Lisbon, Porto, Faro and Beja on the mainland; Ponta Delgada, Horta, Flores and Santa Maria in the Azores; and Funchal and Porto Santo in Madeira.
Elsewhere in Europe, VINCI Airports holds a a 25-year concession to manage and upgrade Nikola Tesla Airport in Belgrade (Serbia); and a 51% stake in Portuguese airport retailer, Lojas Francas Portugal (LFP), which operates more than 30 retail outlets across 10 Portuguese gateways managed by VINCI Airports.
In the UK, VINCI Airports holds a controlling 50.01% stake in London Gatwick and Edinburgh airports.
In Asia-Pacific, VINCI Airports has a 40% stake in Kansai Airport, which operates Kansai, Osaka Itami and Kobe airports. In Cambodia, it owns 70% of the shares in Cambodia Airports, which operates Cambodia’s Phnom Penh and Sihanouk international airports.
In Latin America, it has a 40% stake in the Nuevo Pudahuel consortium responsible for operating Santiago International Airport in Chile; a 45% shareholding in Coriport, the operator of Costa Rica’s Guanacaste International Airport (formerly Liberia-Daniel Oduber
Quirós International Airport); 100% owns Aeropuertos Dominicanos (AERODOM), which has the concession for six gateways in the Dominican Republic, including capital Santo Domingo’s Las Américas International Airport and Gregorio Luperón Airport in Puerto Plata; and in Brazil holds the concession for Salvador Bahia International Airport and a separate 30-year concession to operate and develop Manaus, Porto Velho, Rio Branco, Boa Vista, Cruzeiro do Sul, Tabatinga and Téfé airports in the north of the country.
In North America, VINCI Airports has an interest in seven airports. Plans to expand/reduce portfolio: Always looking for new opportunities.
News: VINCI Airports completed the acquisition of the majority shareholding (50.01%) in Edinburgh Airport for £1.27 billion in June 2024. Global Infrastructure Partners (GIP) holds the remaining shares in the Scottish gateway under a similar model to the one used at London Gatwick Airport. At the time of the deal, Nicolas Notebaert, CEO of VINCI Concessions and president of VINCI Airports, stated that the addition of a third UK airport demonstrated the operator’s “long-term strategic ambition and continued commitment to the country”.
VINCI Airports has acquired a 20% shareholding in the Budapest Airport concession company and will operate and manage Hungary’s capital city gateway for 55 years until 2080.
At the end of August, VINCI Airports celebrated the completion of the modernisation works at Belgrade Airport in Serbia in presence of Presidents Macron and Vučić.
The new Terminal 1-A at Santiago's Arturo Benítez International Airport (pictured above) was inaugurated by the President of Chile, Gabriel Boric, in early September 2024. The $20.2 million expansion of T1 has added eight new boarding bridges to the domestic terminal, whose footprint now covers 17,334sqm. It is part of the T1 modernisation project that will renovate and refurbish the facility, create a new baggage claim area, and an additional 18 boarding gates when the works are completed at the end of next year.
Twenty years and still growing Nicolas Notebaert, CEO of VINCI Concessions and president of VINCI Airports, talks to Joe Bates about an eventful two years for the global airport operator.
How did your airports outside of France perform in 2023 and were there any standout performers?
For VINCI Airports, 2023 was marked by a return to pre-COVID traffic levels in our network in Europe and around the world. Our airports in Serbia, Portugal, in Central America and the Caribbean (Mexico, the Dominican Republic and Costa Rica) achieved record figures thanks to our commercial developments conducted with airlines and the work we’ve done in terms of enhancing the passenger experience.
It is true that the traffic in France has not yet returned to 2019 levels. However, the first months of 2024 give us confidence. For example, in May, Nantes Atlantique airport saw its traffic break record levels, thanks to routes with Spain, the United Kingdom and Portugal.
In 2023, we also celebrated important successes. From an environmental perspective, four of our airports have been awarded Level 5 status in ACI’s Airport Carbon Accreditation programme, making them among the first in the world to receive the honour. We are very proud to see the amazing work of our teams around the world being recognised.
VINCI Airports strengthened its international footprint while developing its business. We integrated 20 new airports in two countries, with 13 airports in Mexico through OMA and seven airports in Cabo Verde, all acquired in 2022.
We ended 2023 with the amazing news that our concession contract to manage six airports in the Dominican Republic had been extended by an additional 30 years.
What is your strategy/philosophy for developing your international business and has this changed at all since COVID?
First and foremost, the COVID period has not prevented us from pursuing our international development. At VINCI, we do not have an established strategy regarding our development. We keep the same approach as we had before: we remain selective and cautious; we look at every project with a clear attention on the traffic growth potential, the potential to improve the customer experience, and the length of the contract.
When I look back at the COVID period, we had just integrated one of our major acquistions, London Gatwick, in to our network. This year
(summer 2024), London Gatwick airport experienced one of its busiest summers yet with a total recovery from this period. This success is the result of our expertise and know-how in the sector.
More generally, the COVID experience pushed our teams to reinvent themselves and to strengthen the collaboration with our partners. This has helped us grow and reinforce VINCI Airports’ network both in Europe and worldwide.
Do you have key focus areas in terms of expanding your international assets?
No, we don't, as this is not our approach at VINCI. We, genuinely, have no barriers in terms of geography. Having said that, our most recent activity, has tended to be on the consolidation of our network in Europe, with the acquisitions of Budapest Airport in Hungary, and Edinburgh Airport the UK, in June and April 2024 respectively. They follow the acquisition of Belfast International in 2018 and London Gatwick in 2019.
As a general rule, do you believe that the terms of airport concessions need to be more flexible to take into account both upturns and downturns in the industry?
I truly believe in the concession model. It has never been so modern and relevant as it is today. Our Grantors need us to manage these infrastructures to the highest standards, to provide the best quality of service and to invest in the long-term on their environmental transition, as we are committed to do.
We are trusted and reliable partners for the countries where we operate, and they know that, so our contracts need to reflect it.
What do you see as the key challenges for your airports in 2024?
This is an important year for VINCI Airports, because we celebrate our 20th anniversary. I take great pride in knowing that we are now the No.1 private airport operator in the world with more than 70 airports in 14 countries.
Our main challenge is to continue, with commitment and conviction, our environmental strategy. It is the driver for all our decisions. We have set one main objective, to reach net zero emissions for our European network in 2030 and for the rest of our airports in 2050. I am confident that our work as a team and a global leader can actively contribute to the environmental transition.
Another challenge is traffic growth, but I remain confident that our traffic levels will continue to develop and grow in 2024 and be higher than 2019 by the end of the year.
In the 2024 edition of our annual investment feature, Modalis Infrastructure Partners’ president and CEO, Curtis Grad, discovers that the airport private sector deal flow remains strong despite geopolitical headwinds.
Dealmaking and public-private contract awards in the airport business have ebbed a little in the past 12 months, but remain relatively buoyant.
Modalis Infrastructure Partners has been tracking the market closely through its Deal Pipeline on the airportIR business intelligence website and the flow has remained robust, although the market has not been as strong as in 2023. Currently the site is tracking more than 100 active deals.
The relative dip year-to-date probably reflects a tougher funding environment due to higher interest rates, with investors taking a harder look at the speed of returns before taking aim at specific airport projects and management contracts.
Justin Lee, airportIR’s Singapore based writer/researcher, commented: “There are fewer multiple airport public-private partnership (PPP) deals that have been concluded this year.
“That’s not to say that there aren’t many multi-airport opportunities in the market; there are some in the Bahamas, Greece, India, and Peru, for example. However, the PPP process is very slow due to various factors.”
Caution is warranted given the current geopolitical concerns in Eastern Europe and the Middle East. Also, over the years, many multi-airport systems around the world have already been privatised, including some of the larger capital-city airports that are most attractive to investors.
In the recent past, these have been used – perhaps most noticeably in Brazil – as a profit-driver in a tranche with smaller gateways to make the entire group financially viable.
Despite fewer lucrative hub airport deals, air transport infrastructure remains a good bet, particularly airports given the strength of the post-COVID passenger rebound.
The latest United Nations World Tourism Organization (UNWTO) data shows that international tourism bounced back to 96% of pre-pandemic levels in the seven months through to July 2024. That amounted to around 790 million tourists travelling internationally during the period – about 11% more than in 2023, and only 4% less than in 2019.
A key move this year came from the world’s biggest asset manager, BlackRock, which has thrown its hat in the infrastructure ring. The global company has swallowed up fund manager Global Infrastructure Partners (GIP) in a deal valued at $12.5 billion, and completed on October 1.
GIP is a lead shareholder in several key airport assets, among them London Gatwick (LGW) and Edinburgh (EDI) in the UK, and Sydney Airport (SYD), Australia’s primary international gateway serving 38.7 million passengers in 2023. The group also owned a 75% stake in London City Airport (LCY) before selling it in 2016.
In a statement, BlackRock said: “Large government deficits mean that the mobilisation of capital through PPPs will be critical for funding important infrastructure. As capital has become more scarce in a higher interest rate environment, companies are exploring partnership opportunities to improve their Returns on Invested Capital (ROIC) or to raise capital to reinvest in their core businesses.”
The prevailing financial environment has placed extra burdens on government owners of airports, as well as operators wanting to upgrade facilities. BlackRock’s move only confirms that this asset class, among several in the wider infrastructure pool, has longevity.
Larry Fink, chairman and CEO of BlackRock, said: “Infrastructure is one of the most exciting long-term investment opportunities as a number of structural shifts reshape the global economy.
“We believe the expansion of both physical and digital infrastructure will continue to accelerate as governments prioritise self-sufficiency and security. Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects.”
Though 2024 has not have been the best year for the airport PPP market, there were some important transactions that came to light; some concluded, while others are in limbo.
In Europe, in the latter camp, there had been much speculation at the start of the year about a change of ownership at the continent’s busiest hub, London Heathrow (LHR) after its main shareholder, Ferrovial, expressed an interest in divesting at the end of 2023.
Two buyers – private equity firm Ardian and Saudi Arabia’s Public Investment Fund (PIF) – were said to be in the frame but, to date, Ferrovial still retains its 25% share, according to Heathrow Airport Holdings Limited.
Other current shareholders include Qatar Investment Authority (20%), Caisse de dépôt et placement du Québec (12.62%), GIC (11.2%), Australian Retirement Trust (11.18%), China Investment Corporation (10%), and Universities Superannuation Scheme (10%).
Meanwhile in Hungary, AviAlliance sold off its stake in Budapest Airport to a consortium consisting of the Hungarian state-owned Corvinus Zrt and VINCI Airports, while increasing its control over Athens Airport in Greece.
The move means that VINCI, with operations in Portugal, UK, France and Serbia, now handles more than 150 million passengers in Europe across 26 gateways.
In the Philippines, a major PPP project at Manila’s Ninoy Aquino International Airport (MNL) was finally signed off by the Department of Transportation (DOTr) and Manila International Airport Authority (MIAA) following the winning bid by SMC-SAP & Company Consortium. The concession is for 15 years with an option for a further 10 years.
SMC-SAP – composed of San Miguel Holdings Corporation, RMM Asian Logistics Inc, RLW Aviation Development Inc, and Incheon International Airport Corporation – fought off two rivals by offering to share with the government 82% of future gross revenue, (excluding passenger service charges).
The $3 billion project will cover upgrades to all facilities of the busy airport including its runways, four terminals and other facilities. The over-capacity MNL processed 45.3 million passengers in 2023, up 46% over the previous year.
Cynthia Hernandez, executive director of the Philippines' dedicated PPP Center, regards the deal as a watershed moment. “It is a significant milestone in the Philippine infrastructure landscape. We are confident that the streamlined process this project underwent will serve as a blueprint for future Philippine PPP programmes,” she said.
Also in Asia, some big news emerged mid-year when Malaysia’s government selected an entity led by BlackRock to run Malaysia Airports Holdings Berhad (MAHB), the operator of Kuala Lumpur International Airport (KUL) and most of the other gateways in the country.
The move, according to Channel News Asia, came after BlackRock, through GIP, accepted some stringent terms including an agreement to continue appointing a Malaysian as MAHB's chairman and CEO, and to maintain the collective national majority ownership of shares.
It seems that other suitors did not agree to the unusual terms set by Khazanah Nasional (the government’s sovereign wealth fund) and the Employees Provident Fund (EPF).
Malaysian Prime Minister, Anwar Ibrahim, said that thanks to the conditions set by Khazanah, the collective Malaysian ownership of MAHB will increase to 70% from the current 41% once the restructuring of the airport operator is completed. There is, therefore, some way still to go on this deal.
It has been a busy year in Colombia where the concession for Cartagena Airport (CTG) was awarded by the National Infrastructure Agency (NIA), while three bidders await the result of the San Andres Airport (ADZ) tender. San Andrés Island is one of the most important tourist destinations in the country handling more than two million passengers in 2023.
In the case of CTG, the award went to Operadora Internacional Aeropuerto de Cartagena SAS (OINAC). As well as operating the airport, the entity is tasked with expanding and remodelling the gateway to help drive the national tourism strategy.
The works will include a new international terminal, a revamp of the existing one, new boarding bridges, rescue and firefighting services and a new cargo terminal.
Earlier this year NIA president, Francisco Ospina Ramírez, noted that he was looking to improve at least six concessioned airports.
He said: “We are already implementing our airport expansion strategy. The pre-construction stage of the Rafael Núñez International Airport in Cartagena began in March and construction is expected to begin in the first quarter of 2025 on the project, which has an investment of $920 billion.”
The changes will raise the airport’s capacity from 5.7 million passengers per annum to in excess of eight million per year.
In the Pacific, Australia is seeing quite a bit of reshuffling of airport ownership, with exits from some regional gateways possible as two pension funds and a big airport investor review their options in Queensland Airports Limited (QAL) and Perth (PER).
QAL runs Gold Coast (OOL) and three other airports. Between them, the State Super and Australian Retirement Trust (ART), and The Infrastructure Fund (TIF), held a 70% stake in QAL this summer. Local media are, however, reporting that TIF wants to divest its 40% interest in the airport.
The airport group undertook a strategic review in FY23 and revamped its organisation post-pandemic with a new CEO and chair, Ann Sherry. She said that while QAL had faced difficulties in recent years it was now focused on investing in infrastructure that "best positions its airports for sustainable, long-term growth”.
In November 2022, OOL opened a modern, three-level terminal expansion designed to flex between domestic and international operations as required. The project doubled the terminal footprint, providing space for future passenger growth. It was planned ahead of the expected influx of international travellers for the 2032 Olympic and Paralympic Games, which are forecast to generate around A$5.5 billion in economic and social benefits for Queensland.
At the end of September, Australia’s Financial Review reported that software billionaire Scott Farquahar and his partner Kim Jackson (both founders of Skip Capital), had emerged as the new owners of QAL thanks to a $2 billion bid alongside US global investment company KKR.
A few days later, retirement fund AustralianSuper, which lost the QAL battle, had apparently taken a 15% stake in Perth Airport (PER), put up for sale by Utilities Trust of Australia. AustralianSuper already has a 5.25% stake in the western Australian gateway, the fourth biggest in the country.
PER, which recorded more than 16 million passengers in FY 24, is embarking on a multi-billion-dollar private infrastructure development to deliver new terminal facilities, a new parallel runway, two multistorey car parks and an airport hotel.
Recently, there have been some promising signs from Canada’s Trudeau administration. It has set in motion plans to get Canadian pension funds, which have been active investors in airport in markets like Australia, Belgium, Denmark and the UK, to consider investment in the Canadian airport sector.
In Canada’s federal budget in May, the government pushed forward with some ideas that could bring about more flexible infrastructure investment options at airports. The changes could herald a new era of privatisation among Canadian gateways and the country’s pension funds – which hold over C$3 trillion in assets – will likely be the first to take a closer look.
Predictably, there is pushback from labour unions on airport privatisation, but in a statement, the Canadian Airports Council (CAC) said: “We applaud the government for their efforts, particularly in working toward identifying and clarifying ways Canadian airports can pursue infrastructure investment opportunities to attract capital, including from pension funds.”
The CAC has asked for more financial investment options for airports along with an extension of the government land lease at airports to meet the growing demand for air travel and business development needs. “We are pleased to see government taking steps to clarify options for airport infrastructure investment and look forward to learning more,” stated CAC’s president, Monette Pasher.
Canada has seen the benefits of PPP investments by its own pension funds abroad. In the UK, much the most recent upgrades at London City Airport (LCY), including the investment next-gen security scanners, have been attributed to the gateway’s acquisition by pension and sovereign wealth funds, and subsequent cash injections.
LCY is owned by a consortium made up of AIMCo, (Alberta Investment Management Corporation), one of Canada’s largest and most diversified institutional investment managers; OMERS, among Canada’s biggest defined-benefit pension plans; Ontario Teachers’ Pension Plan; and Wren House Infrastructure, a direct infrastructure investments arm of the Kuwait Investment Authority.
Since the 2016 purchase, the city-centre gateway has steadily been developed, despite it being geographically hemmed in, with residential buildings very close by. The plans have needed substantial investment and have been boosted recently thanks to the approval of a rise in the passenger cap from 6.5 million to nine million per year by 2031.
The Canada Pension Plan Investment Board (CPPIB) is also eyeing up airports. It has had a 5.64% stake in Aéroports de Paris (Groupe ADP) since 2022 and, this year, appointed Guy MacKenzie to lead its Listed Infrastructure team in London, which invests globally across airport and other transport infrastructure like toll roads and rail, as well as regulated utilities.
CPPIB president and CEO, John Graham, was recently quoted in Canada’s Financial Post as saying: “We have not invested in airports as much as some of our peers around the world, (but) it’s not due to a lack of interest. We’ll continue to look at assets that become available. Airports are interesting to big institutional investors because there’s a scarcity value to them.”
Looking further ahead on PPP, India, China and Saudi Arabia will be places to keep a close eye on in 2025. Boeing’s latest
commercial market outlook from 2023-2042 indicates that total passenger traffic this year will exceed pre-pandemic 2019 by 15% as constraints such as labour shortages, supply chain friction and operational limitations at airport and air traffic control are managed better.
By 2042, single-aisle fleet sizes will more than double to 34,000 jets from 16,200 in 2022 thanks mainly to the rise of low-cost, point-to-point carriers. Additional aircraft will invariably drive need for extra airport capacity from new greenfield airport projects and airport expansions. The infrastructure opportunity is vast and highly visible in some markets such as Saudi Arabia
The kingdom’s General Authority of Civil Aviation (GACA) has implemented several reforms to bring in private investment. GACA’s president, His Excellency Abdulaziz Al-Duailej, commented: “The regulations will enable the realisation of the Saudi Aviation Strategy, which is mobilising $100 billion in investment from public and private sector sources by 2030.”
Data from S&P Global and Cirium also show that based on urban populations versus available airport capacity, China, and particularly South Asia (mainly India), are under-served. This suggests that more new-build/greenfield airports will spring up. By 2042, both regions will have close to 10,000 jets, exceeding the 13,600 in the Americas and Europe’s 10,600.
India has already rolled out a successful airport privatisation programme and it is continuing. Nagpur, after lengthy court proceedings, has just been confirmed for GMR Airports, as reposted in the airportIR Deal Pipeline, while gateways such as Durgapur, Puri and a batch of 25 smaller regionals are also waiting in the wings in the second phase of privatisations.
So, although not a banner year by any means, 2024 and the year preceding have done much to temper doubts and fears brought on by the impact of the pandemic. Not only has traffic bounced back, the appetite for private sector investment in airports has proven to be remarkably resilient.
Bottom line… the future remains bright for a sector that has seen more than its fair share of turbulence over the past three decades. Onwards and upwards!
Airport Economics Consulting Inc’s principal and founder, Patrick Lucas, considers whether there is a business case for small scale airport Public-Private Partnership projects.
The multiplier effect and positive externalities that airports generate in terms of employment and contribution to local economies is significant.
Commerce, tourism, and an intricate supply chain of businesses thrive and depend on passenger and cargo traffic within the aviation ecosystem and beyond.
However, the many benefits of airports do not come without their costs. Airports are capital-intensive investments – irrespective of their ownership and financing model, the large capital outlay and the complexities involved in airport planning, approvals, and constructing new infrastructure means that there is risk associated with the long-time horizon of these investments.
That is, capital investments tend to be lumpy over the short-term whereas cash flows and an expected return on invested capital are only sufficiently realised over the longer term. Moreover, a critical mass of traffic throughput is required before airport operators or other stakeholders can start recovering costs – the CAPEX incurred, the associated operating expenses and a reasonable return on investments.
In the era of high government debt following the pandemic, where drawing on the public purse is not always feasible, questions are raised as to whether there are any other policy options to finance airport infrastructure and manage airport operations over the long-term?
Historically, the private sector has always been attracted or incentivised to invest in larger airports with high traffic volumes. However, can different forms of private sector participation be extended to smaller airports even though they have low traffic throughput? Is there a sufficient business case?
On a distributional basis, the majority of airports across the globe are small in that they have low passenger and cargo traffic throughput in
any given year. During pre-pandemic times, based on analyses from ACI World (ACI Airport Economics Report) more than 90% of the world’s airports had fewer than five million passengers on a per airport basis.
When the world’s airports are analysed through the lens of profit and loss, as much as 68% are estimated to be operating at a net loss. Interestingly, of that 68% operating at a net financial loss, the vast majority are small – 97% of these airports have fewer than one million passengers (See Chart 1).
Airports that serve the smallest markets tend to have higher overall costs on a per-passenger basis by virtue of the fact that they do not have sufficient scale.
Average total costs decline with an increase in market size. Fixed costs, such as depreciation, interest expenses and other capital costs, are spread over an expanding airport’s traffic throughput.
The inverse relationship between average total costs and throughput as seen in the data is an indicator of economies of scale. Because certain markets continue to recover from the pandemic, data during stable times is presented for the period 2017-2019.
Chart 2 shows average unit costs across various size categories of airports. Although the chart is not an actual cost curve, the significant decrease in unit costs beyond those airports with fewer than one million passengers is indicative of economies of scale.
While this may vary, at some point airports achieve a level of minimum efficiency. Moreover, there may even be diseconomies of scale in the traffic development continuum when airports need to invest more in capital (CAPEX) to meet current and future demand.
The extra costs and potential excess capacity in the near-term results in what economists refer to as diseconomies of scale.
If the majority of small airports are loss making, why are they kept open for business? The reason smaller regional airports remain in operation hinges on the fact that they contribute to the local, social, and economic development of their surrounding communities.
Depending on the context, there are several financing and funding tools that could be considered for smaller airports. Because of the positive externalities that they generate, in multiple jurisdictions, government intervention in the form of subsidies or grants helps to cover the shortfall or deficits.
In the case of major airport networks, which consists of a portfolio of airports under a single operator in a given jurisdiction, profitable
airports in the network tend to cross-subsidise or compensate for the net losses of smaller airports.
While there are always exceptions, when it comes to overall financial performance, size does matter. The probability of making a loss increases with lower traffic volumes because the overall market becomes smaller as analysed in Chart 4. Again, if net profit margins are analysed and different forms and grants and subsidies are excluded, the smallest airports have either negative margins or very thin margins.
Governments continue to find alternatives to the financing conundrum. Recognising the important role these smaller airports play in terms of socio-economic development and connectivity, in order to cover the operating deficits, the European Commission’s Aviation State Aid Guidelines have historically recognised those airports with fewer than three million passengers per annum as eligible for State aid.
However, such subsidies are deemed as time bound and temporary based up to the year 2027. Thereafter, smaller airports are expected to achieve financial viability by raising airport charges, incentivising traffic development and achieving certain cost efficiencies.
While there is no doubt that some of these tools may slightly improve traffic and the bottom line, there is no denying the underlying economics. A recent report by ACI EUROPE, in collaboration with Oxera, revealed that that those airports with fewer than one million passengers have a high likelihood of operating at a loss irrespectively. That is, the underlying economics linked to economies of scale remain the same.
Thus, there are strong arguments recognising that State aid is still a critical safeguard in covering the financial shortfall beyond 2027.
Given that many small airports operate at a loss, it begs the question, can a case be made for private sector participation? What possible factors are at play to incentivise such an investment?
Small scale airport Public-Private Partnership projects are generally complex to implement, due to difficult operational considerations, high project development costs with minimal payout, and weak profitability metrics.
So how do we make it happen? Many governments across the globe have recognised the complexity of covering the high costs that small airports face due to their low throughput. In these instances, such smaller airports are included in a cluster or network that encompasses profitable airports with higher throughput levels.
From a policy standpoint, several objectives could be met under this model – government financing is reduced by capitalising on the cross-subsidisation model of a network thereby ensuring that the economic and social benefits that small airports offer to their communities are maintained.
The PPP model remains applicable to small-scale airports, albeit in varying forms:
• Mexico and Brazil, or even more recently the Cape Verde Islands, have adopted airport cluster or network schemes, where one or more larger profitable airport tend to cross-subsidise or compensate the net losses of smaller airports.
• On some continents, such as in Africa, small-scale airport PPP schemes are introduced through a combination of measures via grants and higher passenger charges. This solution presupposes that vital and costly infrastructure such as the runways and aircraft aprons are already in place, or that a government and/or multilateral institution offer appropriate grants as a source of finance.
• In North America and Europe, many regional airports or small-size secondary airports are developed and managed within the framework of Operate and Maintain (O&M) management contracts, where the private party assumes full management of the airport's operation and maintenance. However, the more substantive investment in infrastructure is ensured through subsidies either by regional or national institutions.
Whatever the model, we are reminded by the timeless adage that 'there's no such thing as a free lunch’. That is, private operators have a bottom line and expect a return on their business for a given level of risk.
A successful PPP typically allocates risk appropriately between the public and private entities with the appropriate contractual instruments depending on the objectives.
The models of private sector participation are differentiated by the degree of risk transfer. For instance, shorter-term management contracts (~5 years) typically follow a classic O&M model with no or minimal requirements linked to financing the infrastructure.
In cases where capital investments are required, and a government is not able to finance or construct the capital asset such as a new terminal or runway, a build-operate-transfer (BOT) model is used.
The BOT concession contract is longer lived than a short-term management contract, and its lifespan is dependent on the cost-
recovery time (~35 years), as revealed in ACI World’s 2018 Policy Brief: Creating fertile grounds for private investment in airports
The longer the time horizon, the higher the risk transfer to the private sector. However, successful SSPPPs, usually require a combination of public sector financing or other economic incentives coupled with the appropriate model of private sector participation. This is often known as hybrid PPP financing schemes that may also consider evolving models of private sector participation.
Based on government objectives and needs, matching the PPP model with the right contract lifespan and recognising the underlying economics are foundational elements.
In addition to having clear and consistent economic regulatory frameworks set up prior to privatisations, it is critical that governments make the appropriate preparations and due diligence ahead of time of the tendering and bid process. This instils confidence in private investors and other related stakeholders.
The cautionary story that has been told up to now is that small airports with fewer than one million passengers per annum are loss making due to insufficient scale. Thus, when private sector participation is considered, appropriate government incentives need to be bundled into the right P3 model based on those circumstances.
On the other hand, truth be told that the smallest airports across the globe are also the fastest growing in the world. When airports are analysed through the lens of the year 2006, before the Global Financial Crisis, and based on the airport size categories in that year, the smallest airports have had the greatest gains in passenger traffic.
From 2006 to 2023, airports with fewer that one million passengers (<1m), between 1 and 5 million (1-5m) and between 5 and 15 million (5-15m) experienced absolute growth of 130%, 102% and 94% respectively.
Indeed, it is true that the smaller airports start from a lower passenger traffic base, but many of those airports classified as small in 2006 (<1m) have graduated into other size categories over the years. This means with the increased scale, profitability follows.
There is no doubt that these small and emerging airports play an essential role in feeding traffic into hub airports for onward journeys to other major national and international destinations. This results in important feedback loops for airports in a given aviation market.
In other instances, existing major airports may already be congested and have reached a point of saturation. This is when smaller airports stand to strategically benefit from traffic leakage and grow as a result of this burgeoning demand.
Centerline Airport Partners, an aviation company focused on identifying and enhancing the value of airports through strategic investment, development and operational excellence, recently acquired a 51% stake in Parma International Airport (PMF) in Italy.
While PMF has modest passenger traffic of 125,000 per annum, the airport is located in between the populous cities of Milan and Bologna. Talking to Canadian newspaper The Globe and Mail about the deal, Centerline’s CEO, Andrew O’Brian, described Parma as “a diamond in the rough”. He explained that, in consideration of the airport’s strategic location, saturation at other airports and expansive catchment area, Parma International Airport is ripe for the right business model that aims to attract airlines. PMF is poised for significant growth in the years to come.
Smaller airports that are commercially driven or have a policy objective to support the economic development of the communities they serve have various managerial levers at their disposal.
The strategic development of traffic and resultant revenue growth involves several managerial levers and the engagement of multiple stakeholders to ensure success.
1. Market analyses and forecasts to determine and promote the viability of new routes or increased air service;
2. Ensuring that an airport has the necessary infrastructure to support the desired level of air service;
3. Effective marketing and promotional strategies alongside the local tourism authorities and hospitality industries;
a. Passenger traffic development (Leisure and business)
b. Air cargo development
4. Airport-airline relations – Provision of incentive packages such as landing fee or passenger fee discounts, marketing support, and streamlined customs and immigration processes
5. Enhancing the overall customer experience (for passengers) goes hand in hand with air traffic development.
Public-private partnerships remain an important development tool and viable financing mechanism for small scale airport projects, provided that they are structured properly, balancing government objectives with investor expectations.
Making use of proven schemes and hybrid financing models are definite ingredients in propelling SSPPPs in the airport sector. Unless loss-making airports are clustered within a network alongside profitable airports, they usually require some public subsidies or grants. This ensures that any financial shortfall is covered, and that infrastructure is financed in a sustained manner.
Finally, blending in the right entrepreneurial talents for a longerterm strategy aimed at developing traffic growth and revenue streams are also critical levers.
ACI World’s former vice president and chief economist, Patrick Lucas, is principal and founder of Airport Economics Consulting Inc (www.airport-economics.com/).
The author would like to recognise that this article was inspired by earlier work and contributions from the Leadership Committee of the Airport Chapter of the World Association of PPP Units (WAPPP). They include Jacques Foullain, Curtis Grad and Rodolfo Echevaria.
Special thanks to ACI for the useful data and reports and to Andrew O’Brian (Centerline Airport Partners); Pierre-Hugues Schmidt (VINCI Airports); Jorge Roberts (AvPorts); Alexandre Leigh (IFC PPP Transaction Advisory) and Rogerio Prado (Pax Aeroportos) for their insight and contributions.
Learning about the delivery of top quality customer service from some of the best in the business was high on the agenda at the recent ACI World Customer Experience Summit and Exhibition in Atlanta.
Atlanta was the setting for this year’s ACI World Customer Experience Summit and Exhibition, and host HartsfieldJackson Atlanta International Airport (ATL) certainly didn’t disapppoint in terms of staging a top quality event or providing examples of how it keeps in excess of 100 million passengers yearly safe, happy and entertained.
The premier airport event dedicated to customer and employee experience brought together over 600 international delegates from more than 65 countries, including government officials, travel agencies, and senior executives from the airport and aviation sectors.
This year’s theme was ‘The Airport and Beyond: All for the Travel Journey’, which meant that as well as highlighting examples of best practices, the event also examined the ever-evolving travel ecosystem, focusing on the role of seamless interaction at every touchpoint and how this is shaping superior customer experiences.
The Summit was officially the first major ACI World event to be held under the leadership of new director general, Justin Erbacci, who delivered one of the welcoming addresses.
He said: “The customer experience is shaped by how we, as a travel ecosystem, connect and collaborate. Every stakeholder plays a crucial role, and it’s in uniting these individual touchpoints that we unlock the true magic of customer service.
“Remember our theme – Airport and Beyond: All for the Travel Journey. This means that the customer experience must transcend the sum of its parts. It must resonate deeply, offering not just service, but meaning and value that customers can truly engage with.
“As we look ahead, one thing is clear: the future is all about engagement. Customers no longer simply want to buy a product; they crave an experience, a connection. We see this shift across all industries, and air travel is no exception.
“For airports, this engagement will hinge on personalisation, and the technology (and people!) that make it possible.
“In the months and years ahead, how we manage digital identity, baggage, intermodal transport links, retail experiences, and so much more, will shape the future of our industry. But here’s the good news: our customers want us to succeed. The demand for our services is undeniable.”
Welcome addresses were also given by the mayor of Atlanta, Andre Dickens; Hartsfield-Jackson Atlanta International Airport’s interim general manager, Jan Lennon; ACI World chair and Cincinnati/ Northern Kentucky International Airport CEO, Candace McGraw; ACI-NA president and CEO, Kevin Burke; and Immediate past ACI World director general, Luis Felipe de Oliveira.
ATL’s Lennon noted: “As the world’s busiest airport, exceptional customer service is the cornerstone of our mission. At ATL, we are uniquely positioned to spearhead discussions on how airports can adapt and innovate to meet the dynamic needs of our customers and the evolving aviation landscape.
“This summit serves as a vital platform for global thought leaders to exchange insights and pioneer ideas that will redefine the future of travel, ensuring that the customer journey remains seamless and enriching from beginning to end.”
The many highlights of the event included a keynote by Ed Bastion, CEO of Delta Air Lines, sharing his insights on the future of travel; Expert panels featuring global airport leaders like Dubai Airports CEO, Paul Griffiths, and president and CEO of Greater Toronto Airports Authority, Deborah Flint; and cutting-edge innovations from leading companies such as Uber, Plaza Premium Group, and Moment Factory, showcasing the future of travel technology.
As is tradition, the Gala Dinner used the opportunty to honour the 2024 winners of the prestigious Airport Service Quality (ASQ) Awards, together with Amadeus.
The ASQ programme is the world’s leading airport passenger satisfaction programme with over 400 participating airports in 95 countries.
Other discussions covered at the summit included how airports like ATL are navigating trends, from workforce dynamics and accessibility to the rise of AI-powered travel solutions.
Outside of the conference rooms was an exhibition hall filled with pioneering solutions designed to enhance the airport experience and cater to modern air travel needs.
During the event, ACI World launched a new publication dedicated to improving accesible travel for all passengers (See page 9).
At the end of the summit it was announced that Guangzhou Baiyun International Airport will host next year’s ACI World Airport Experience Summit in Guangzhou, China, on September 8-11, 2025.
China’s pivotal role in global aviation is highlighted by its rapidly growing network of airports and airlines, reinforcing its position as a major hub for international travel and trade.
Chair of Guangzhou Baiyun International Airport Co Ltd, Wang Xiaoyong, said: “Guangzhou Baiyun International Airport is committed to improving the passenger experience and constantly pursuing technological innovation and excellent service as it aims to become a world-class gateway.”
ACI World’s Erbacci commented: “Guangzhou Baiyun International Airport will be a fitting host for the premier airport event dedicated to customer and employee experience. As China’s busiest airport, it is a vital node on the world network and handled more than 63 million passengers in 2023.
“The airport’s 142% growth rate last year speaks of the airport’s incredible resilience and emphasis on its customers and employees. It will not only provide a warm welcome to our international audience but also give us some unique perspectives on serving the customer.” AW
Stantec’s Dave Dargie tells us more about the planning and design involved in drafting the long-term development options for the Cayman Islands’ airports.
Stantec and its project partners Chalmers Gibbs, BCQS, DKMA, KPMG, and Munich International have developed a 20 year growth plan for the Cayman Islands' airports. Their recommendations aim to guide the Cayman Islands Airport Authority (CIAA) through the development of their 20-year land use plans for Owen Roberts International Airport (GCM) on Grand Cayman, Charles Kirkconnell International Airport (CYB) on Cayman Brac, and Edward Bodden Airfield (LYB) on Little Cayman.
The scope of the recently completed Airports Development Project included highlighting the necessary infrastructure required to accommodate current and future aviation and passenger demands. Consideration was given to incorporating sustainability and preserving as much of the natural flora and fauna at and around the three airports, along with developments over time.
The Airports Development Project effectively covered four major programmes:
– Project A1: The construction of a general aviation terminal at GCM
– Project A2: The new master plan to 2041 for GCM
– Project B: A new master plan for CYB
– Project C: The new master plan to 2041 for LYB
Stakeholder engagement, public outreach and site reviews
The development of the airport master plans began in 2021 with a mix of external and internal stakeholder interviews undertaken by the CIAA. These interviews continued over the next year into late 2022 and helped the CIAA confirm the development options best available to improve the proposed airports, while also garnering additional feedback from key stakeholders.
This stage of a development project is critical, allowing for the alignment of all involved parties on preferred development concepts for a potential redevelopment.
Throughout this process, the CIAA also engaged the public and local communities on all three Islands. The public were given a presentation by the project team, highlighting and detailing the proposed improvements and changes to the airports. Public sentiment and responses to the proposed development options were very positive.
Ongoing investments and improvements addressing safety and regulatory concerns, protection of the environment, and improving passenger experience, were all extremely important to local communities, and ensuring those concerns were incorporated into the final master plans was paramount for both the CIAA and the project team.
Once stakeholder and public engagement concluded, the project team completed site visits to each of the three Cayman Islands Airports to gain a better understanding and appreciation of the condition of the existing infrastructure.
This allowed the team to assess amenities and identify challenges regarding regulatory standards and requisite improvements. The team collected several reference documents and past studies and completed a thorough review of all available information prior to commencement of concept planning and development efforts.
Utilising the demand requirements through 2041, the planning team created alternative plans for key infrastructure at each of the airports, including airside, landside, and terminal facilities.
An evaluation of the facility planning concepts were completed for each, from which the preferred development concepts were produced.
The cost estimates and environmental impacts of each of the preferred development concepts were then completed, from which final revisions to the airport master plans were finalised for each airport on Little Cayman, Cayman Brac and Grand Cayman.
The plans enabled the CIAA to incorporate new, innovative technologies that improve capacity and throughput of passengers for their existing facilities.
In addition the new technology will help them adopt improved revenue producing services on the landside at GCM is planned to support the objectives of improving operational efficiencies, supporting an improved level of service and passenger experience, and enhancing and creating new, non-aeronautical revenue streams.
The existing general aviation (G/A) terminal at Owen Roberts International Airport has been maintained well beyond the building’s original and extended life expectancy.
Indeed, the aging building requires ever-increasing maintenance and repairs which are both costly and disruptive to airport operations.
A new general aviation facility is a strategic objective for the Cayman Islands government. Stakeholders have indicated that the inferior quality of the facilities will likely deter tourism growth and operational efficiencies. Security, customer experience, and operational efficiencies are all lacking at the existing G/A terminal.
Selecting the preferred development alternative would resolve many of the current deficiencies at the airport.
A new development, located east of the main commercial terminal, would provide a modern general aviation terminal, hangars, and aircraft parking aprons to meet project airport needs. This brownfield site overlooks North Sound and once complete will help to improve the minimal time for general aviation aircraft to exit the runway and arrive at the G/A terminal.
The airport master plan for Owen Roberts International Airport (GCM) was focused on meeting key objectives that include improving the passenger experience, expanding facilities to accommodate growth, improving aeronautical and developing new non-aeronautical revenue streams, while complying with applicable aviation and environmental regulations and standards.
The airport landside access and parking areas are key functions for which future demand was considered and capacity provided to meet growing demand.
A series of airport approach roads and access points have been improved to enable the CIAA to secure employee and vehicle access into the airport at multiple locations, while separating fuel truck and other equipment movements from passenger terminal traffic.
Current at-grade surface parking lots are operating with limited available capacity; a ground transportation centre (GTC) or multi-level parking lot with a major car rental centre under cover, along with expanded employee parking and future concession and retail space is proposed.
A second-level walkway into the main terminal building was considered to protect passengers and guests from the environment when walking between the terminal and the GTC.
The Charles Kirkconnell International Airport (CYB) on Cayman Brac supports domestic and international air traffic.
The immediate investments required for the airport are related to the creation of two Runway End Safety Areas (RESAs), widening the runway strip, and the removal of obstacles from around the airport.
The air terminal building is capable of meeting current demand but is frequently congested at peak times. Forecasted air traffic is expected to grow modestly between 2021 and 2041; as such, a new air terminal building will be required to replace the existing facility by 2041 to accommodate future passenger demand.
The existing building will continue to function with one to two flights simultaneously but forecast traffic growth will result in an increase in peak hour passengers that will likely exceed the capacity of the terminal.
The aircraft parking apron at CYB should be expanded to accommodate additional aircraft in the peak hour. Although two aircraft may park and manoeuvre efficiently today, a third aircraft in the peak hour will results in the need to expand the apron. The apron must also expand to enable aircraft types common to CYB to manoeuvre safely from aircraft parking stands to the taxiway.
A future second taxiway connecting the apron with the runway is needed to reduce delays from aircraft operations on the commercial aircraft parking apron, and to improve safe and efficient airside operations.
The existing Edward Bodden Airfield (LYB), located at the west end of Little Cayman Island, its approach/departure paths being directly over the village of West End and the large ponds that are home to significant bird colonies, which pose a high potential for bird strikes to aircraft at LYB.
The proposed New Little Cayman Airport includes an airport access road from Spot Bay Road, a new 1,200 metre runway and connector taxiway to an aircraft parking apron, an airport terminal building to support scheduled passenger operations, and a building to house the fire truck and airport maintenance equipment.
It is assumed that the new airport will be operated as a domestic-only facility with limited hours of operation. The planning team did not anticipate the need to accommodate international air services.
Airfield lighting is to be provided to enable MEDEVAC flights 24/7. Other aircraft operations may be restricted during the daily inbound/outbound bird migration peak periods.
The terminal building would enable enhanced passenger check-in, security screening, and a sterile departures hold room for outbound passengers, segregated from arrival passengers.
Dave Dargie is Stantec’s vice president and aviation leader for airport infrastructure in the Caribbean.
Massimiliano Martinenghi, project director at Scott Brownrigg, brings us up to speed on the planned expansion of Madinah Airport in Saudi Arabia.
Madinah Airport (MED), officially known as Prince Mohammad bin Abdulaziz International Airport, is a hugely important gateway for the Kingdom of Saudi Arabia as it serves the second holiest city in Islam.
Madinah is home to the Prophet Muhammad’s mosque, Al-Masjid an-Nabawi, and his final resting place, and as a result attracts millions of visitors annually, especially during Hajj and Umrah pilgrimages.
Designed by Scott Brownrigg in 2014, the existing 156,000sqm terminal serves both international and domestic flights and was built to accommodate up to nine million passengers per annum.
However, soaring demand due to the booming Umrah travel market and rapid growth of tourism to Saudi Arabia, means that the airport is fast approaching its maximum capacity.
The expansion and modernisation of Madinah Airport are key elements within Saudi Arabia's transformative Vision 2030 initiative, unveiled in 2016 by Crown Prince Mohammed bin Salman.
Vision 2030 aims to transform Saudi Arabia's economy, society, and governance by diversifying the Kingdom's economy beyond its reliance on oil, while nurturing robust public services, championing sustainable development, and boosting tourism alongside infrastructural upgrades.
MED’s expansion includes the construction of a new domestic terminal (T2) spanning 39,000 square metres and the renovation and expansion of the existing international terminal (T1), which will feature new facilities for Hajj and Umrah pilgrims passing through the gateway.
Particular attention has been paid to the environmental impact and sustainability aspects of the development; the existing terminal achieved Gold certification under the LEED for New Construction Rating System.
The new domestic terminal T2 is also intended to receive Gold Certification, following and, in some cases improving upon, the rating of the existing terminal.
Our design concept was inspired by the airport’s role as a gateway for millions of Islamic pilgrims as well as the palm tree – a symbol for peace and welcome – which has become emblematic in the terminal building.
The palm motif brings a unique architectural identity to the development and provides a pragmatic and efficient structural support, while using a minimum amount of material.
The geometry of the roof's structural support reflects a biophilic design, integrating nature-inspired geometries into architectural spaces to enhance human wellbeing and environmental harmony.
The terminal evokes a sense of spiritual calm and reflection, mimicking natural elements typical of Saudi Arabian culture.
The structure was designed to be modular, with each palm-tree built upside down at ground level and then rotated and craned into place. The structural framing system has been designed to reduce the amount of material required to support the roof, thereby reducing the embodied carbon of the structural elements.
Truss systems, including those used for roof support, are more sustainable because they minimise the amount of material required while maximising structural strength and efficiency.
By distributing loads more evenly and efficiently, trusses reduce the need for excess materials, leading to lower resource consumption and reduced environmental impact.
The structural system supporting the roof of T2 follows a similar language to T1 but simplifies the structure with more geometric and minimal elements.
In addition, the column span and the height of the elements have been adjusted to optimise the solution. This allowed Scott Brownrigg to create further material savings, while keeping open floor plans that enhance the sense of place and the passenger experience.
The new terminal’s open floor plans will allow clear and intuitive wayfinding and orientation. Natural illumination, reinforced by skylights and glazed cladding, brings a sense of quiet atmosphere, introducing natural light and direct views to the airfield.
The interior design includes modular elements capable of creating unique and bespoke spaces, with the intent of increasing the passenger experience during the journey, reducing stress, and enhancing the sense of place.
Passengers have quiet zones, and the integrated Islamic architectural elements magnify the spiritual ambiance of arriving in Madinah.
In T2 more natural, local and recycled materials, including marble and timber, will be introduced to support local economies and reduce the environmental impact associated with transportation.
This approach also promotes use of materials that are well-suited to the local climate and conditions, enhancing the durability and performance of the terminal over the years to come.
The terminal will also include dedicated areas for children and families to enhance comfort and provide entertainment and engagement for passengers waiting for transfers or flights. These family-friendly spaces will feature soft play areas to keep children occupied and happy.
Additionally, there will be comfortable seating areas for parents to relax while keeping an eye on their children.
The terminal will also offer amenities such as nursing rooms, family restrooms, and stroller rentals to ensure convenience for families traveling with young children.
The project also encompasses significant landscaping efforts, transforming the dry desert surrounding the terminal into a welcoming environment. These newly created outdoor spaces will be accessible to both passengers and staff, providing a pleasant and functional area for relaxation and activities.
TAV Airports has big plans for Madinah Airport
TAV Airports, together with its consortium partner, is investing a total of $275 million on increasing the capacity of Madinah Airport.
As outlined in Massimiliano Martinenghi's article, a new domestic terminal will be built, and the existing terminal will be developed to accommodate 18 million passengers annually.
Saudi Arabia’s first airport privatisation project, Madinah Airport welcomed 9.4 million passengers in 2023, almost 50% more than in the previous year.
TAV Airports CEO, Serkan Kaptan, said “We have been successfully operating Madinah Airport, the gateway to the Holy Land, together with our partner Al-Rajhi, for the last 12 years. The passenger traffic is increasing on a very fast pace following lift of travel bans brought in during the pandemic.
“This new investment programme will help accommodate increasing demand and is fully supporting Saudi Arabia’s Vision 2030, which aims to attract more visitors into the country.”
The consortium of TAV Airports and Al-Rajhi Holding have the concession rights to operate Madinah Airport until May 2041.
TAV Airports undertook the build-operate-transfer (BOT) project of Madinah Airport, and began operations in 2012. It's $1.2 billion terminal became the first Leadership in Energy and Environmental Design (LEED) Gold certified terminal at a commercial airport in the MENA region.
Outside, the landscape will be irrigated with recycled wastewater, meticulously treated to guarantee its safe reuse for irrigation and minimise waste. The design includes shaded areas along various pathways, offering comfort and protection from the sun for those moving between different parts of the terminal.
The thoughtful integration of green spaces and water conservation techniques underscores the commitment to environmental stewardship, creating a more enriching experience for everyone at the terminal.
Sam Folley and Shirin Pishbin of Trowers & Hamlins explore how airports can maximise revenue from non-aeronautical sources.
Non-aeronautical revenues provide an invaluable source of income for the world’s airports and, in many cases, are essential to their bottom line, ensuring that they can survive and remain competitive.
In addition, it could be argued that most revenue generating non-aviation related facilities and services also give rise to a better passenger experience, better sustainability credentials and a more diverse airport environment.
The income can also play a key role in helping fund the modernisation and enhancement of existing terminals or the development of new facilities with revenue generated from activities such as retail/F&B activities (including duty free sales) and car parking.
However, this article considers other novel, new and innovative ways to generate additional non-aeronautical revenues, such as enhancing the passenger experience, advertising, the use of real estate, and energy and fuel sales.
The passenger experience
Even at the best airports, post security waiting can be a dull time for passengers, and anything airports can do to provide entertainment or comfort, could persuade passengers to part with cash.
Traditionally, airports have focused departure areas almost entirely on retail and F&B, often overlooking the provision of ‘entertainment’. Entertainment, of course, can take many forms. It could, for example, include providing child play zones, bookable lounges, arcades, gyms or wellbeing spaces.
In a sense, airports need to play catch up with shopping centres here, where in much of the world they have had to diversify into entertainment to attract customers away from online shopping. The difference with airports being that they already have a captive market who may otherwise not spend more than a price of a cup of coffee during a two hour wait.
At this point we should say that there is, of course, a growing number of examples of airports already providing child plays zones, and bookable lounges are becoming more common. Likewise, some airports even offer the ability to work out at a gym and get physically tired before a long flight. These include Chicago O’Hare, Vancouver and Hamad (Doha). But, in our opinion, we believe these services are by no means as widespread or as monetised as they could be globally.
In the advent of digital marketing, it might seem like traditional advertising is less effective, but with the amount of passengers passing through airports, there is still huge demand from advertisers wanting space in the most prominent positions.
Naturally, airports will need to check that the proposed advertising does not breach any covenants given to existing retailers and doesn't conflict with the need for clear signage. But beyond this, there are many options as some of the well-known airport advertising agencies such as JCDecaux and EYE Airports will tell you.
Something slightly different is offering sponsorship of buildings that have visibility to busy roads or to areas of high passenger flow. Sponsorship agreements can be highly lucrative and secure long-term revenue, as well as be an opportunity for an airport to affiliate itself with a particular brand.
A number of companies (think American Express) sponsor airport lounges, for example, while at Amsterdam Schiphol, Made.com has partnered with the airport to create comfortable and relaxing waiting areas.
We believe that it is safe to say that airport waiting areas have not historically been the most comfortable of places. So, why not let the ingenuity of a furniture company create a much more comfortable experience using its own furniture, in the process allowing potential new clients to test their products?
Arguably, the potential economic benefits of advertising and branding areas within the terminal alone should encourage airports find the right advertising partners to work with and be creative in their approach.
There are many ways in which an airport's real estate can be used to generate additional income. Of course, the commercial viability and legal considerations of these will differ dramatically between countries and jurisdictions and must be discussed with local agents and lawyers.
An obvious way that many airports will already count as a significant part of their business will be the leasing of retail, hangar and office space throughout the estate.
Often real estate within the perimeter fence attracts a premium for occupiers who need to be within this area because they are offering services directly to aircraft or to passengers. However, are airports maximising their revenue potential from these tenants?
Commercial landlords will typically grant leases that reserve a rent and separately allow them to recover a service charge and insurance costs. It does, however, feel like these fundamentals are often overlooked by airports, and as result they often cover the cost themselves that should be spread among their tenants. Rent reviews are also often not included.
Similarly, while commercial landlords usually expect an open market upwards only rent review every five years, airports appear reluctant to capitalise on their ability to command more advantageous terms, such as annual rent reviews by reference to their jurisdiction's main inflation index.
Rent could also be linked to passenger numbers, with future increases based on traffic forecasts. This practice is already widespread in the UK.
Airports often boast surplus land desirable to companies wanting to be close to good road connections, near major cities or beside an airport. These include logistics companies, hotels and firms involved in aviation related activities as well as shopping centres, conference venues and others involved in light industry or the leasing of commercial office space.
It goes without saying that leasing or selling this land can secure significant additional capital or revenue over the long-term, and indeed an ever growing number of airports are realising this and green lighting the development of commercial facilities on land they don’t need for new terminals or runways.
In most cases, airports lacking the expertise needed to develop and administer real estate in this way can partner with or outsource to
property companies. Such arrangements can be particularly beneficial to both parties and ultimately lead to an increase in passenger and air traffic numbers at the airport as activity around it increases.
Airport land can also be utilised in the generation of renewable energy such as solar, either through ground mounted or rooftop PV, depending on if space is an issue.
Clearly there are many benefits to this. Power can be supplied to third party airport occupiers as part of their leasing arrangements. Excess power can be sold off site. Coupled with battery storage, electricity can be sold to EV car fleets, such as hire car fleets as they switch to electric, or to the airport's own fleet of cars.
At Melbourne Airport in Australia they are currently constructing their second solar farm, that along with its first farm, will provide approximately 40% of the airport's total energy needs.
Other sources of renewable energy, such as wind, have been hotly contested by the aviation industry as they can disrupt radar. However, partnerships with radar manufacturers have helped to alleviate this and there will be more and more opportunities as the development of radar and wind turbines continues.
Finally, the production and storage of Sustainable Aviation Fuel (SAF) could be a way to use additional land at airports. For instance, Pittsburgh Airport plans to become a producer of onsite SAF, not only for supply to the airline customers but also to ship it to other highly populated airport communities that lack space for their own production facilities.
This is an excellent source of revenue for the airport, enhances its sustainability and makes more sense than producing SAF offsite.
Airports need to be innovative to increase non-aeronautical income, but the good news is that there are many opportunities to do this. Ultimately, not all of the options will be suitable for all airports and strategic planning will be required, often with the help of external advisors and partners outside of the airport industry.
Sam Folley (partner) and Shirin Pishbin (senior associate) both work for international law firm,Trowers & Hamlins LLP.
We shine the spotlight on the latest airports to reach Level 5 in ACI’s Airport Carbon Accreditation programme and a host of pioneering sustainability initiatives across the globe.
Airport Carbon Accreditation excellence
Stockholm Arlanda and Ronneby airports in Sweden and BengaluruKempegowda and Delhi-Indira Gandhi in India have become the latest gateways to achieve the highest Level 5 status in ACI’s Airport Carbon Accreditation programme.
Swedish airport operator, Swedavia, notes that Arlanda and Ronneby’s success now means that four of its ten airports hold the highest level of climate certification, following Göteborg Landvetter Airport and Malmö Airport which achieved the accolade in December 2023.
Swedavia’s remaining six airports are striving to reach the top certification level by 2026.
President and CEO, Jonas Abrahamsson, has no doubt that the latest Airport Carbon Accreditation recognitions strengthen Swedavia’s position as a global decarbonisation leader.
He enthuses: “This shows that we continue to lead the way and have chosen to invest in aviation’s necessary climate transition for sustainable air travel. This certification is the result of our long-term efforts, where we have taken a holistic approach to the entire ecosystem of the airports and also involved our partners in the transition.”
Swedavia became fossil-free in its own airport operations at all ten airports as early as 2020, making it the first airport operator in the world to achieve this. By 2025, all ground operations at Swedavia’s airports that are carried out by other operators will also be made fossil-free through the partnership plan that has been developed, which involves all operators at the airports signing an agreement with Swedavia stipulating a focus on phasing out fossil fuels from their operations.
The long-term goal is for domestic flights to be fossil-free by 2030 and for international flights to be fossil-free by 2045, in line with the Swedish aviation industry’s joint roadmap within the framework of Fossil-Free Sweden.
By achieving and maintaining a net zero balance for Scope 1 and 2 emissions, and also tackling Scope 3 emissions through strong third-party engagement, Stockholm Arlanda and Ronneby airports are now among the 18 pioneers worldwide to reach this level of carbon management.
The elite list includes two of India’s busiest airports, BengaluruKempegowda and Delhi-Indira Gandhi, which achieved Level 5 status in the programme in late August.
Bengaluru’s Kempegowda International Airport (BLR) has adopted a science-based approach to reducing carbon emissions across its operations.
The airport is committed to achieving 100% renewable electricity consumption, implementing afforestation initiatives, and promoting the adoption of electric vehicles.
Its robust renewable electricity infrastructure includes onsite solar power generation through a Power Purchase Agreement (PPA) model and an offsite PPA arrangement for solar and wind power.
As a result of its efforts, in 2023, Kempegowda achieved a remarkable 95.6% reduction in Scope 1 and 2 emissions. Looking ahead, the airport is committed to achieving net zero emissions for Scope 3 by 2050, demonstrating its long-term dedication to sustainability.
"We are delighted to be one of the first airports in Asia to attain ACI’s Level 5 accreditation and to lead the way with the highest emission elimination by an Indian airport,” said Hari Marar, managing director and CEO of Kempegowda operator, Bangalore International Airport Limited (BIAL).
“Achieving Net Zero Greenhouse Gas Emissions seven years ahead of our target is a testament to our unwavering commitment to the sustainable development of the airport. This accomplishment not only sets a new benchmark for us but also reinforces our dedication to creating a greener future for all."
Delhi’s Indira Gandhi International Airport (DEL) has also implemented a series of strategic initiatives to reach net zero for the emissions under its direct control.
Key measures include transitioning to renewable energy, promoting the use of electric vehicles within airport operations, and upgrading infrastructure to support environmentally friendly practices.
The airport has installed a 7.84 MW solar power plant within its airside area, significantly reducing its reliance on conventional energy sources.
Additionally, the airport has expanded its fleet of electric vehicles and taxibots, further decreasing emissions and fuel consumption in line with its ambitious target to achieve net zero Scope 3 emissions by 2050.
Christchurch Airport in New Zealand is the only other gateway in the ACI Asia-Pacific & Middle East region to achieve the memorable Airport Carbon Accrediation milestone.
Hydroheated vegetable oil
In a move that will reduce its annual carbon vehicle emissions by up to 90% compared with standard diesel, Belfast City Airport has introduced Hydrotreated Vegetable Oil (HVO) fuel across 100% of its fleet of airside vehicles and equipment.
This significant shift to lower carbon fuel marks a major step forward in the airport's ongoing sustainability initiatives, which includes the recent upgrade of its main apron lighting to energy-efficient LED systems.
Ian Nuttall, the airport’s environment and sustainability manager, said: “As a responsible business leader, Belfast City Airport is committed to sustainable operations and strives to do all it can to positively impact the environment, the local community, and the economy in which it operates.
“By investing in HVO fuel and LED lighting for our main apron, we are demonstrating our dedication to environmental stewardship and making strides in our pursuit of net zero carbon emissions by 2050, with ambition to achieve this sooner.
“We are committed to paving the way for an industry that not only connects people with places but also safeguards our environment.”
Belfast City Airport has reduced the carbon emissions from its operations by approximately 57% since 2017, achieving Platinum status in Business in the Community’s Environmental Benchmarking Survey for the fourth consecutive year in 2023.
Michael McDowell, the airport’s airfield operations manager, noted: “Our team is dedicated to integrating greener innovations into everyday practices, ensuring a seamless blend of operational excellence and sustainability.”
JFKIAT – the operator of Terminal 4 at New York’s John F Kennedy International Airport – has announced its investment in Green-e® certified Renewable Energy Certificates (RECs) to support the aviation industry’s transition to green electricity and its continued efforts to combat climate change.
It believes that its investment in RECs – Environmental Protection Agency (EPA) validated market-based instruments that represent the ownership of generated renewable energy – is a critical step forward in supporting and advancing the development of renewable energy production in the US.
This action is part of JFKIAT’s immediate carbon reduction strategy and commitment to reaching net-zero carbon by 2050. As a result, the facility’s overall carbon footprint has been reduced by 16% when compared to its baseline.
“At T4, sustainability informs every aspect of our innovative operations, and we’re on a mission to continue investing in responsible, ethical, and environmentally conscious programmes,” says JFKIAT CEO, Roel Huinink. “By helping to track production within electricity power grids, RECs are an important tool in expanding the renewable energy market. Through this investment, we are able to reduce our Scope 2 electricity emissions to net zero while supporting the generation of renewable energy in the US. Not only does this programme encourage the ongoing transition to cleaner energy sources and make renewable energy projects more economically viable, but it also creates a healthy environment at T4 and prepares our facility for a resilient future.”
Making fire fighting foam more environmentally friendly Los Angeles World Airports (LAWA) is nearing completion of a pioneering project to remove firefighting foam containing perand polyfluoroalkyl substances (PFAS) from its entire fleet of Aircraft Rescue and Fire Fighting (ARFF) vehicles at Los Angeles International Airport (LAX) and Van Nuys Airport (VNY).
This initiative will make LAWA among the first airport operators in California to transition to fluorine-free foam (F3) and positions it as a leader in environmental stewardship and firefighter safety.
The project, which covers 14 ARFF trucks across both airports, represents one of the largest such transitions undertaken in the United States. LAWA is not only meeting but exceeding the Federal Aviation Administration's (FAA) best practice recommendations and
is on track to complete this crucial environmental and safety upgrade, aligning with new federal and state regulatory standards.
"This transition underscores our unwavering commitment to the safety of our operations and emergency response community, as well as our dedication to environmental stewardship," enthused LAWA, CEO John Ackerman.
“By taking this proactive step and collaborating with a deep bench of subject matter experts, from the remediation team to the Los Angeles Fire Department, we're setting a new standard for airports in California and across the nation."
The removal process utilises advanced cleaning technology to reduce PFAS levels in the ARFF trucks by over 99%, significantly minimising potential exposure to these harmful chemicals for both firefighters and the environment.
Green loan part of Newcastle Airport’s sustainability focused future
Newcastle Airport in Australia has joined forces with CommBank to fund a raft of pioneering sustainability programmes via an innovative A$235 million Green Sustainability-Linked Loan (GSLL).
The GSLL converts existing loan funding to one linked to specific sustainability actions and outcomes.
Airport CEO, Dr Peter Cock, said with the support of the GSLL, Newcastle Airport is proud to be part of the Hunter Region’s transition to low carbon energy.
“As we strive to be the green gateway to the Hunter, we are committed to supporting and demonstrating the region’s shift towards a sustainable future,” he commented.
“Our new terminal, which has achieved 5 Star Green Star standard in design, reflects our dedication to environmental responsibility and our role in this important transition.
“We have already achieved net zero for Scope 1 and 2 emissions well ahead of our 2030 goal. It’s ambitious programmes like this that are really setting the standard for how we approach sustainability.
“Our terminal expansion build has also been Designed Assessed by the Green Building Council of Australia (GBCA) and is on track to receive
a 5 Star Green Star Buildings rating – the first airport terminal in Australia to achieve this under the new rating tool.”
CommBank’s GSLL is broadly tied to Newcastle Airport’s efforts to reduce Scope 3 emissions, achieving a high ACA level and minimising waste sent to landfill across the entire airport precinct, with interest rates linked to ambitious progress against these goals.
In the past year, Newcastle Airport has made significant progress towards becoming one of the most sustainable airports in Australia, including partnering with Australian renewable energy retailer to allow energy requirements to be met entirely through renewable sources helping to achieve net zero Scope 2 emissions well ahead of the airport’s original 2030 target, which was achieved in January, 2023.
New fleet of electric buses in operation at Munich Airport Munich Airport’s wholly-owned ground handling subsidiary has taken delivery of the first 10 electric passenger buses, with another 27 on the way before the end of the year.
AeroGround Flughafen München GmbH has the option to purchase a further 25 buses from MAN Truck & Bus Germany in the future.
The German gateway claims that their arrival marks another key step towards achieving its ‘Net Zero 2035’ ambition.
“We are reducing air pollutants, lowering our energy consumption and avoiding climate damaging CO2 emissions,” explained airport CEO, Jost Lammers.
“The changeover is a further step towards sustainable airport operations and a clean future for the aviation industry. The buses also offer passengers a more comfortable journey from the gate to the aircraft.”
Quito sustainability summit hailed a success
Corporación Quiport is confident that the recent Quito International Airport Sustainability Conference left delegates in no doubt about the importance of embracing sustainability with a focus on Environmental, Social, and Governance (ESG) criteria.
The event, organised by Corporación Quiport, brought together renowned experts in sustainability, who shared their knowledge and experiences through lectures and panel discussions.
The airport believes that discussing sustainability with a focus on ESG criteria is crucial for addressing future challenges.
During the conference, the central theme was how sustainability lies at the heart of smart business strategies that can lead to sustainable economic growth.
Experts emphasised the need to integrate ESG criteria into all operations and strategic decisions to ensure a more resilient and equitable future.
“The airport industry faces various challenges on its road to sustainability, including decarbonising operations, efficient resource management, and implementing inclusive and equitable policies,” notes Quiport.
“The adoption of clean technologies and the promotion of circular economy practices are essential to reduce the carbon footprint and improve operational efficiency.”
Good year for sustainability in Hong Kong Hong Kong International Airport (HKG) provides a comprehensive round-up of its sustainability achievements over the last year in its Sustainability Report 2023/24.
The report – covering Airport Authority Hong Kong’s fiscal year ending March 31, 2024 – reveals that its newly introduced strategic framework, Ascend, focused on 24 strategic goals across the sustainability pillars of Environmental Excellence, Operational Excellence, Thriving Economies and Societies, and Thriving People.
Highlights of the report are said to include AAHK being recognised as a ‘2024 Top-Rated ESG Performer’ by Sustainalytics, a well-established rating company; HKG becoming the first airport in the world to deploy the award-winning Digital Apron together with Tower Management System (DATMS) for airport operations; and AAHK launching a Renewable Diesel (RD) pilot programme, making HKIA the first Asian airport to use RD in ground services equipment.
Other successes worthy of note, says AAHK, include two of HKG’s aviation fuel facilities obtaining the International Sustainability and Carbon Certification: Carbon Offsetting and Reduction Scheme for International Aviation (ISCC CORSIA) certification for Sustainable Aviation Fuels handling.
In his introduction to the report, AAHK chairman and former CEO, Fred Lam, says: “Sustainability at AAHK is not just about what we do in good times – it’s also about what we do in difficult times. With this in mind, and despite the challenges of the pandemic period, we continued investing in projects across numerous aspects of sustainability.
“As we look ahead, climate change remains a significant challenge for our industry. We are pioneering efforts in this area, including by supporting the adoption of lower-carbon fuels.”
Another milestone for Queenstown Airport
Queenstown Airport has achieved Level 4+ ‘Transition’ status in ACI’s Airport Carbon Accreditation programme.
The New Zealand gateway says that the achievement acknowledges its commitment to sustainability and progress towards decarbonisation. Only 46 of the more than 40,000 airports worldwide have been accredited at Level 4+ or 5.
The airport’s chief executive, Glen Sowry, enthused: “Aviation is a challenging industry to decarbonise. We’ve set ambitious sustainability targets and invested heavily to reduce our carbon footprint as quickly as possible. It’s pleasing to see that recognised, although there is a lot more work to be done.”
Since its initial carbon audit in 2019, Queenstown Airport has reduced its operational absolute emissions by 71% and is targeting an 85% reduction in absolute emissions by 2028.
That progress is based on a commitment to electrification, transition to a certified renewable electricity supply, upgrading of assets and infrastructure to increase efficiency, and a decision to stop using a diesel generator for supplementary power during periods of peak demand.
We round-up some of the latest ACI World Business Partner stories from across the globe.
WHSmith North America (WHSNA) has partnered with local-favourite, Lee’s Donuts, to open a new location at Vancouver International Airport (YVR).
The brand is known across the Metro Vancouver region for providing a fast, friendly and familiar customer experience, in addition to the delicious donut creations handmade fresh daily.
“With our mission to deliver dynamic and hyperlocal concepts to our airport partners across the continent, Lee’s Donuts stood out to us as
the perfect representation of Vancouver and a natural choice for partnership,” said Toby Keir, CEO of WHSmith North America.
While YVR's director of passenger retail experience, Benedict Ma, noted: “Lee’s Donuts is a perfect addition to the outstanding [F&B] options available to passengers – especially those looking for a sweet treat before boarding. This partnership supports our goal to bring beloved local businesses into the terminal, showcasing the best of Vancouver’s food scene at YVR.”
Local and minority businesses are powering the success of the dining and retail offerings in the new Terminal 3 at Los Angeles International Airport (LAX).
Local brands now represented in the terminal include Alfred, Fat Sal’s, Homeboy, Native by Nyesha and Yakumi, courtesy of the airport’s partnership with Unibail-Rodamco-Westfield (URW) Airports and Delta Air Lines.
“We’re excited to offer LAX guests a range of unique, locallyinspired experiences, while supporting the growth of remarkable businesses,” says Karim Webb, president of LAX’s Board of Airport Commissioners.
“This celebration is a testament to the power of diversity, inclusion and community engagement. These efforts are proof that our partnerships with URW and Delta Air Lines are not just about enhancing the travel experience, but prioritising and championing local and minority-owned businesses that reflect and showcase the best of Los Angeles.”
SITA has announced the opening of a new technology hub in Cluj-Napoca, Romania, aimed at advancing the future of air travel through cutting-edge innovation.
It notes that the new hub strengthens its global network of technology centres and is set to play a critical role in addressing the most pressing challenges facing the aviation industry today – enhancing operational efficiency, reducing environmental impact, and delivering seamless passenger experiences.
The Cluj-Napoca hub joins a network of SITA technology hubs in London (United Kingdom), Letterkenny (Ireland), and New Delhi (India), and will focus on developing solutions that transform passenger processing and travel technologies.
“As the aviation industry undergoes rapid digital transformation, our new tech hub in Cluj-Napoca will help accelerate the development of technologies that meet growing passenger demand for faster, smarter, and greener travel,” said SITA CEO, David Lavorel.
“The hub plays a crucial role in modernising passenger processing globally, with a focus on automation, biometrics, and AI, enabling more seamless and efficient travel solutions.”
As part of the hub’s launch event, a Letter of Intent was signed by Sergio Colella, SITA’s president for Europe, and Dan Nicorescu, chief operations officer at Cluj Avram Iancu International Airport to establish a strategic framework for sharing expertise and pursuing joint initiatives to advance airport technology.
Sydney Airport has announced that Lagardère AWPL has been awarded the Domestic Travel Essentials retail contract following a successful tender.
It reveals that the new retail offering will span 2,500sqm across 14 locations and aims to “redefine the traditional news, books and convenience model” by including technology and pharmacy, LEGO stores, and a new concept from Relay.
The new stores will provide passengers with the opportunity to pick up the essentials across a number of convenient locations before they board.
As part of the new retail offering, Sydney Airport will now showcase one of the largest
Travel Essentials stores in Australia with a mega store of over 650sqm in T2 Domestic. Mark Zaouk, Sydney Airport's group executive for commercial, commented: “We’re flipping the script on the traditional travel essentials model to deliver a new and fresh concept for travellers who desire more from their airport experience at Australia’s busiest airport terminal.
“Our goal is to create a collaborative environment where anything is possible, ensuring that customer service goes beyond five stars to deliver a world-class experience, and Lagardère AWPL's creative vision aligns perfectly with that goal – we’re excited to see their plans realised at our domestic terminals.”
EMMA
Membership Region: Europe
Type of Business: IT & Communications W: www.emma.aero
EMMA is a SaaS-based, AI-driven platform for airports, airlines, and other stakeholders that creates a unique, real-time and forecasted view on operations and performance. How does EMMA create value? Through efficient and transparent information sharing; effective decision-making; and enhanced predictability of airport operations.
Membership Region: Asia-Pacific & Middle East
Type of Business: Consulting & Management W: www.airportengr.com
Airport Engineering Services (AES) has led and supported the development, expansion, ORAT and operations of major international airports both within the US and across the globe. The company’s vision is to provide reliable airport engineering consultancy services for its customers, progressively raising the bar with achievements.
Membership Region: North America
Type of Business: Investment W: www.yardi.com
Yardi is solely dedicated to the design, development, and support of real estate investment management and property management software. We continue to develop and deliver software and services with the highest commitment to responsiveness, quality, innovation, and customer focus.
Richard Plenty and Terri Morrissey reflect on the importance of the human connection as the ‘airport group’ model grows in importance.
How do airport acquisitions and mergers affect people who work in airports?
Until well into the 1990s, the airport sector was characterised by a multiplicity of state-owned, independently run, relatively small organisations. Airports were reliant on state investment, which was not always available. Exchange of resources and best practice between airports was limited.
This has changed. A report by CAPA Centre for Aviation in 2024 describes how the ‘airport group’ is becoming an increasingly significant organisation model. It quotes a 2022 Study by ACI identifying 27 airport groups comprising 425 airports, collectively handling 29% of global passenger traffic. Private sector investment is a key part of this.
The CAPA report states that the ‘airport group’ model adds value in terms of economies of scale, economic resilience and an increased ability to finance capital improvements. The evidence suggests that operational efficiency is higher as shared targets and co-ordinated support systems are brought to bear, with an impressive track record also on sustainability initiatives such as carbon accreditation.
There is, in principle, more opportunity to share best practice and to invest in new technology. Small and medium-size airports can get access to resources and expertise not previously available.
However, the study does not cover what it is like to work in this kind of environment. Do larger conglomerates offer a better experience for employees?Is this shift to bigger, more connected entities more likely to attract people into the industry and encourage them to stay? These are important questions for the sector at present.
On the positive side, airport groups provide international opportunities for career development and personal growth, particularly for those with high potential or with specialist skills, that are not easily available to those working in stand-alone
entities. For example, we have personally come across Fraport employees working in Europe, the Middle East, Asia-Pacific and South America on transferring and sharing best practices.
Larger groupings also provide opportunities to implement best practice at scale. A case in point is global airport operator, Aena. It has around 48 airports in mainland Spain and many more in the Americas. The group is currently focused on improving ‘the art of communication’ across the company using a co-ordinated approach which includes performance management, training and development, and reviewing leadership competences.
Independent airports, on the other hand, can have a spirit that larger entities find hard to match, with a strong sense of identity, belonging and organisation commitment. The ACI EUROPE Leadership & Human Resources Forum meeting held at London City Airport in October 2024 reminded everyone in attendance what this feels like.
The airport tour provided an opportunity to talk directly with people working in the airport. Many had worked their way through a variety of jobs, giving them an understanding of the challenges faced by their colleagues. They also felt part of a community and knew each other personally and by name.
A human connection can make a huge difference to how people feel about their work. Thanks Frankie, Maya, Mo, Tana, Lee, Grace and Michael for your insights.
As the sector continues to change and develop, it is important to ensure that these best aspects of small and independent airport cultures are not lost in the transition to airport groups. Let’s make sure we find ways of combining the functional advantages of scale with the personal and human touch needed to get the best from people.
We need people to be connected as well as airports.
Albany International Airport in New York State has a new leadership team following the departure of former CEO, Phil Calderone, and the appointment of Peter Stuto as acting CEO and John O’Donnell as acting COO. Both men came out of retirement to take up the roles.
The Metropolitan Washington Airports Authority has announced that aviation industry veteran Terrence Liercke has been named vice president and airport manager of Ronald Reagan Washington National Airport.
Ulf Nygren will become the new manager of Kiruna Airport in Sweden in December. He will replace Andreas Fredriksson, who left his position in August this year.
Idris Caldiran has succeeded Kadri Mete Erkal as the new general manager of Diori Hamani International Airport (NIM) in Niamey, Niger. Erkal remains with the FB Group, taking up the position as chief airports officer. FB Group holds the concessions for NIM and Freetown International Airport (FNA) in Lungi, Sierra Leone.
Christchurch Airport is delighted to announce the appointment of Meg Matthews to its board of directors. Matthews has held leadership roles including head of marketing (Australasia) for Air New Zealand and chief executive of World of WearableArt.
Former Cape Fire Department captain JoJo Stuart is the new manager of Cape Girardeau Regional Airport in Missouri, USA.
Terri Morrissey and Dr Richard Plenty run ACI’s Human Resources training. They received a Presidential Citation from the American Psychological Association in June 2022 for their leadership in advancing global psychology. Contact them at info@thisis.eu
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