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Privatization and Public Private Partnership Models at Airports Around the World Aeroinvest S達o Paulo, Brazil August 30, 2011

Kenneth Currie Senior Vice President InterVISTAS Consulting Group


The Role of Privatization… and Public/Private Partnerships (PPP) • Capital investment for infrastructure development • Air service development for business growth • Commercial development for optimal sustainability • Customer service improvement for competitiveness

In order to achieve… • Enhanced competitiveness and growth • Economic development benefits


What is the most suitable PPP model?


Example: Full privatization…

Sale or IPO „ Full Government Divestiture „ Public Stock „ Limited Economic Regulation

London


Example: Concession to operate airport…

Concession „ Long-term Rights to Operate „ “Ownership” of Revenues and Expenses „ Financial and Investment Commitments to Government

Argentina


Example: Facility concession…

JFK T4

Facility Privatization „ Long-term Rights to Develop and Operate „ “Ownership” of Revenues and Expenses „ Financial and Investment Commitments to Government


The most suitable PPP model should be chosen from among many alternatives

JFK T4

?

?

? Argentina

? ?

London


More examples of airport PPP models

Beijing Vienna Rome Mexico

Canada

OWNERSHIP / GOVERNANCE

Service Concession

Management Concession

Corporatization

Facility Privatization

IPO

Limited Concession (MOO, BOT, BOOT)

OPERATION JFK IAT Indianapolis Colombia Pittsburgh

Bolivia Costa Rica Argentina Santiago (Chile) Amman

Full Government Divestiture

Equity Including Very Long Term Lease South Africa Farnborough Australia Peru Stewart NY Sydney Chicago Quito San Jose C.R.

Outright Sale

Belfast

High Degree of Privatization

Low Degree of Privatization

Management Outsource

BAA


The Role of Privatization… and Public/Private Partnerships (PPP) • • • •

Capital investment for infrastructure development Air service development for business growth Commercial development for optimal sustainability Customer service improvement for competitiveness

Requires… • Understanding your markets, the airline industry and related risk • Comprehensive business planning, programming and implementation • Holistic business relationships with airlines and the aviation community


Understanding your markets, the airline industry and related risk • Macro-economic influences • Air travel demand generators • Traveler origins and destinations • Traveler preferences • Quantity and quality of air service • Competitive climate • Aviation industry trends • Growth opportunities


Comprehensive business planning, programming and implementation PPP embraces the “market model” rather than the “infrastructure model” Focus on understanding and planning for customer needs and expectations. Understand customer expectations

Establish customer relationships

Focus on delivering customer service and pursuing service improvement. Plan and provide facilities

Operate & maintain the airport

Deliver the customer experience

Monitor customer experience

Business Planning

Result: sustainable business plan based on market conditions and customer expectations.


Successful PPP’s are structured to align the interests of all stakeholders Airports

Suppliers

Government Regulatory

Concessionaires

Integrated Business Planning

Airlines Developers

Stakeholders

Financial Inst.


A systematic approach to PPP planning

5. Sustainable Commercial Development and Operation

1. Market Analysis

2. Business Strategy 4. Infrastructure Scope and Financial Feasibility

3. Business Planning 12


Privatization and Public Private Partnership Models at Airports Around the World Aeroinvest S達o Paulo, Brazil August 30, 2011

Kenneth Currie Senior Vice President InterVISTAS Consulting Group


Privatization and Public Private Partnership Models at Airports Around the World