New CAPA analysis reveals decline in large transactions involving major airports as PPP becomes most popular investment option

A new research publication from CAPA – Centre for Aviation has revealed a decline in large transactions involving major airports, albeit this has been offset by an increase in deals relating to smaller airports, including public-private partnerships (PPP), which are becoming the most popular way by which private sector firms can involve themselves with airports, while remaining attractive to public sector owners.


Summary:

  • A new research publication from CAPA – Centre for Aviation has revealed a decline in large transactions involving major airports, albeit this has been offset by an increase in deals relating to smaller airports;
  • The eighth edition of the ‘Airport Finance & Privatisation Review 2018’ highlights that public-private partnerships (PPPs) are becoming the most popular investment method;
  • The report, its first update since Sep-2016, picks up on events since the beginning of 2017, in some ways a turning point for airport privatisation activities, and looks to the future;
  • It includes special reports on airport privatisation in the United States of America, Brazil, Japan, Serbia, Spain, Japan, India, Russia and Saudi Arabia; Brazil and Japan.

The 186-page ‘Airport Finance & Privatisation Review 2018’ is the eighth in a series of reports on airport privatisation and investment published by CAPA and the first update since Sep-2016. The report picks up on events since the beginning of 2017, in some ways a turning point for airport privatisation activities, and looks to the future.

Commentary and data may be found, inter alia, on who the main players and rising stars are; the number and type of transactions and their values; public-private partnership transactions (P3s or PPPs); the continuing increase in international funds investing in the sector; the prospect for IPOs; the disproportionate impact of exogenous events on the sector; and the likelihood of individual transactions taking place.

The second part of the report looks at ongoing, completed, anticipated, and abandoned transactions on a country-by-country basis within a continental framework and within the context of economic and political activity where appropriate.

There are Special Reports on airport privatisation in the United States of America, Brazil, Japan, Serbia, Spain, Japan, India, Russia and Saudi Arabia; Brazil and Japan are highlighted for their level of privatisation activity.

In the case of Brazil, a further tranche of concessions has been launched, but the size and scope of the airports on offer has diminished. However, This has not discouraged investors from all parts of the globe despite the economic woes the country has faced, the continuing questions concerning over-valuations in the earlier tranches and a procedure that has become institutionally complex.

Meanwhile Japan is an example of a country that is playing ‘catch-up’ rapidly following privatisation of the two Osaka airports. At the turn of 2017/18 three transactions were concluded and 14 were outstanding. A French company led the privatisation procedure at Osaka and the government is actively seeking more foreign investors in its upcoming programme.