The Airports Council International Europe (ACI-Europe) has a released an updated 2016 Ownership report, revealing the dramatic rise of private investment in Europe’s airports since ACI-Europe last issued the report in 2010.
- The number of European airports with some share of private ownership has risen to 41% of European airports—205 in all—up from 22% in 2010.
- Nearly 39% of these (79 airports) are entirely privately owned, and 61% (126 airports) are variable percentage ’public-private’ ownerships.
- Larger airports, which handle close to 75% of Europe’s passenger traffic, have the most private shareholders.
“Private involvement in Europe’s airports has increased significantly–driven by a mix of deliberate policy choices, State budgetary constraints, and the need to promote air connectivity by investing in the development of airport infrastructure.”–ACI-Europe.
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The IPO of 49% of Spanish airport operator Aena S.A., and the concession of Portuguese airport operator ANA–Aeroportos de Portugal impacted the overall figures, the airports association states, but there were additional first-time private investments in other European airports during this period.
Airports in Europe’s capitals, such as Zagreb, Ljubljana, Pristina, Belgrade all shifted from fully public institutions to either mixed or fully private ownership. Airport operators like Manchester Airports Group, and SEA Milano also moved to a mixed ownership model since 2010. “The shift in France has been significant, and indeed is ongoing,” the airports association indicates.
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“Almost all fully publicly owned airports are now corporatised and managed on a purely commercial basis,” says Olivier Jankovec, Director General ACI EUROPE.
“These are not anecdotal changes to our industry—they are truly transformative changes. They underline the fact that airports are now run as businesses focused on air connectivity development, operational efficiency, service quality, revenue diversification and sustainable investments,” Jankovec adds.
Smaller Airports Still Less Attractive to Investors
Source: ACI-Europe
Smaller regional airports, the airports association says, tend to be structurally unprofitable and are therefore better suited to “a more limited range of private operation models than their larger counterparts.”
But some smaller regional airports have had private companies taking on short-term operational contracts lasting anywhere from 7 to 15 years.
Private investors have taken a significant stake in Toulouse-Blagnac Airport, and similar privatisation is expected at Nice Côte d’Azur and Lyon-Saint Exupéry airports.
Privatisation Against Global Competition
“On a global level, the debate between the merits and pitfalls of private airport ownership will probably continue,” says Jankovec.
“In Europe (and within the EU in particular) we have clearly already chosen our path. Our airports—be they public or private—are to be run as businesses in their own right, strongly incentivised to continuously improve and underpinned by the principle that users pay a reasonable price to cover the cost of providing the facilities and services that they benefit from,” Jankovec says. “There is no denying the tangible benefits that this approach has brought the EU – significant volumes of investment in necessary infrastructure, higher service quality levels, and a commercial acumen which allows airport operators to diversify revenue streams and minimise the costs that users have to pay — all of which are fundamental requirements to boost air connectivity.”
Jankovec concludes: “The challenge now is to ensure that we have in place a regulatory framework which fully mirrors and promotes this continued business transformation — and helps ensure that the travelling public continues to enjoy the fruits of a healthy and competitive airport market.”
Featured Image: Zona de embarque de la Terminal T4 del Aeropuerto Adolfo Suárez Madrid-Barajas. Source: Aeropuertos AENA