Airport of Thailand (AoT) expects revenue bump for next year

Airports of Thailand Plc (AoT), the operator of six international airports, expects revenue to rise healthily once its 220-billion-baht expansion plan is completed next year.
The company is on track with its five-year investment plan that started in 2015. It is scheduled to be completed next year, expanding Suvarnabhumi, Don Mueang, Phuket, Chiang Mai, Mae Fah Luang-Chiang Rai and Hat Yai airports.

Continued increases in tourist arrivals is another positive factor for the agency. Moreover, the removal of the red flag given by the International Civil Aviation Organization last October has attracted more international airlines to operate service in Thailand, serving the growing tourist numbers.

Foreign passengers generate more income because each is required to pay 700 baht for a passenger service charge per flight. Domestic passengers pay 100 baht per flight.

The new terminal at Suvarnabhumi airport is scheduled to be completed next year and fully operational by 2020. The terminal will help increase passenger capacity from 45 million per year to 90 million at the airport.

This year the government approved AoT building two new airports and managing and expanding four existing airports owned by the Airports Department. The two new airports are Chiang Mai Airport 2, which will be located in Lamphun province, and Phuket Airport 2, located in Phangnga province.

There are four other local airports managed by AoT: those in Tak, Sakon Nakhon, Chumphon and Udon Thani provinces.

Udon Thani airport is being pushed to become a new regional gateway, linking with neighbouring countries, said Mr Nitinai.

AoT also earns income from duty-free concession fees, a segment that is now dominated by King Power International Group. He said AoT expects to finalise concession bidding for duty-free business within the next few months. New operators are likely to sign contracts with AoT within this year, two years before King Power’s duty-free shop concession contract ends.

Source: Bangkok Post

India: GVK in talks for stake sale in Mumbai International Airport

The GVK group is planning to sell a minority stake in its airports holding company and has held talks with Qatar Investment Authority (QIA), AMP Capital and Global Infrastructure Partners as well as Canada Pension Plan Investment Board among other global investors.

GVK, via GVK Airport Holding, owns 50.5% in Mumbai International Airport Ltd. (MIAL), the consortium that runs the existing airport in the city and has won the bid for developing a new Rs 16,000 crore airport project, Navi Mumbai International Airport Ltd (NMIAL) on its outskirts. MIAL’s other stakeholders are Airports Company South Africa (10%), Bidvest (13.5%) and the state-run Airports Authority of India (26%).

Mumbai airport is India’s second busiest and also its most congested. It handled 48.50 million passengers in 2017-18 and holds the record for being the world’s busiest single-runway airport.

NMIAL is seen as a critical alternative to the saturated existing airport. It will be built on 1,160 hectares of land in phases and will eventually cater to 60 million passengers per year. The initial concession period is 30 years from the appointed date and is extendable for a further 10 years.
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The deal, if it fructifies, will be GVK’s second divestment in its airports business. The conglomerate with interests also in energy, power, road infrastructure and mining last year sold its complete stake in the Bengaluru airport, India’s third busiest, to Fairfax Holdings owned by Prem Watsa, a Canadian-born billionaire investor of Indian origin. Fairfax bought the 54% stake in several tranches investing a total of $400 million, its largest in India yet.

Source: The Economic Times

Siem Riap (Cambodia): new airport to break ground after election

Construction of a new international airport in Siem Reap will start after the national election at the end of this month, according to a project representative.

Zou Yuhui, vice president of China’s state-run Yunnan Investment Holdings Ltd., the company in charge of the project, told news agency AKP last week that the main construction work for the project will definitely start this year, later adding that it is most likely to begin after the national polls at the end of this month.

Work to prepare the site – including clearing, compacting and levelling the ground – has already been going on for months, he said.

The new airport, which is expected to cost close to $1 billion, is being built on a 750-hectare property in Sotr Nikom district on the outskirts of Siem Reap City. The project is expected to be completed in two to three years.

The airport will be built in three phases. The company will invest $500 million for the first and second phases, which will allow medium-sized passenger aircraft like the Boeing 737 and Airbus A320 to land. Another $300 million will be allocated for the third phase.

Last October 2017, the agreement to build the new airport was signed between the Cambodian government and Yunnan Investment Holdings. The agreement gave the Chinese firm the exclusive right to run and manage the airport concession for 55 years under a build-operate-transfer (BOT) scheme.

Source: Khmer Times

India: Master document for airport infra development to be out by August

The Centre would put in place a new model concession agreement (MCA) by August that would guide development of airport infrastructure across the country, including the Rs 20,000 crore mega international airport proposed at Jewar, Uttar Pradesh.

The MCA is being drafted by consultancy firm KPMG and would be out for stakeholder consultations by July end. In a recent meeting to review policy actions in the sector, junior civil aviation minister Jayant Sinha wanted the officials to prepare the MCA document on priority basis, as it will be the reference book for developing Jewar airport.
KPMG executives gave a presentation during the meeting and set August 14 as deadline for releasing the final MCA to stakeholders. They discussed various parameters such as tariff structure, concession period and annual escalation in yield, among others, in the run-up to submitting a draft of the key document.

State-run Airports Authority of India (AAI) has hired KPMG for drafting the MCA, the key document that spells out the policy and regulatory framework for implementation of a PPP project.

“Exact time for releasing the transaction structure for the greenfield side for public consultation would be finalised shortly,” said the minutes of the meeting reviewed by Financial Chronicle.

The national civil aviation policy (NCAP) requires calculation of airport tariff in all future greenfield projects on a “hybrid till” basis unless any other model is specified. Accordingly, non-aeronautical revenue to the tune of 30 per cent would be used for cross-subsidising airport charges.

The policy stresses increasing non-aeronautical revenue by better utilisation of commercial opportunities of city side land. An airport industry executive said that various state governments planning to build airports would use the Centre’s model concession agreement as a key reference point but they would be free to entirely adopt it or not.

“Its success would depend on investor interest in upcoming airport projects as they would bid keeping the terms of the document in mind,” he said wishing not to be named.

Junior aviation minister Sinha has advised the consultant to study all the best global practices before finalising the MCA so that any possible gaps could be avoided. Among other issues, the minister also wanted to know the steps taken for increasing the number of slots from 67 now at the congested Delhi airport.

Further, he directed the AAI to collect data of parking bays available at all airports including PPP and joint venture (JV) airports and share the details with airlines. This will help carriers plan their fleet and network expansion in the country.

Source: Deccan Chronicle. India.