CAI targets global portfolio of 10 airports-Singapore

CAI targets global portfolio of 10 airports-Singapore
By VEN SREENIVASAN

CHANGI Airports International (CAI) expects to have a global portfolio of about 10 airports and investments of US$1 billion in airport equity in about five years.Chow Kok Fong, the international airport boss of the Civil Aviation Authority of Singapore (CAAS), said yesterday: ‘That will be a good size and it will allow us to grow to a level where we can achieve economies of scale as a global airport player.’

Indeed, CAI appears to be already getting that recognition. Yesterday, the company was named the 2008 Asia-Pacific Airport Investment Company of the Year at the Frost & Sullivan Asia Pacific Aerospace & Defence Awards ceremony.

And CAI’s parent CAAS was itself named Airport of the Year at yesterday’s ceremony for ‘demonstrating world-class efforts in meeting the demands of all its end-users’.

Mr Chow said he was pleased with the award. ‘Some may see this as just a beauty contest, but it is an important recognition of our achievement and standing,’ he said.

Indeed, CAI has been aggressively expanding its footprint across the Middle East, India, Russia, Vietnam and China. In India, which has some 80 airports, CAI has been aggressively sniffing out airport planning, management or investment projects at Tier 2 and Tier 3 cities with half a million to three million air passengers a year.

‘We are confident of establishing a strong presence in India over the next 10 years,’ Mr Chow said.
Last month, CAI joined forces with a private consortium, Bengal Aerotropolis Projects, to clinch a technical services agreement at India’s first private airport, the US$2.5 billion Durgapur Aerotropolis project. CAI hopes to eventually upgrade its involvement to that of an investor.

Just days earlier, it signed a memorandum of understanding with the Middle Airports Authority of Vietnam to invest in, develop and operate Phu Bai International Airport in the city of Hue - the first time a foreign investor will work exclusively with Vietnam’s aviation authority.

In China, CAI invested some US$100 million to buy a 29 per cent stake in Nanjing Lukou International Airport in Jiangsu province. It is poised to participate in at least half a dozen second-tier airports in southern and central China.

In the Middle East, where its operations management contract at Abu Dhabi International Airport ends soon, it is looking to invest in the project.

CAI is a preferred bidder to manage and operate Saudi Arabia’s King Fahd International Airport in Damman. It is also drawing up the masterplan for the King Hussein International Airport at Aqaba, Jordan.

Back in India, it is exploring more modernisation contracts for airports such as Navi Mumbai, Greater Noida, Kannur and the 24 non-metro airports initiated by the Airport Authority of India.

Mr Chow sees huge potential in the Indian government’s plan to build 400 private airports in the next decade. ‘We are very confident of establishing a strong presence in India over the next 10 years,’ he said.

Together with its partner, the Tata group, CAI recently submitted bids for the state-controlled Amritsar and Udaipur airports which are undergoing privatisation. The successful bidder will be announced next month.
Last year, the two partners clinched a deal to develop Nagpur Airport in Maharashtra state into a passenger and cargo hub.

According to Mr Chow, more opportunities are opening up in the Central Asian republics and eastern parts of Russia. CAI is currently exploring opportunities at St Petersburg.

What does CAI offer which gives it an edge over the competition?

‘We don’t provide plain vanilla airport solutions which depend purely on landing fees and passenger service charges,’ Mr Chow said.

‘Our value proposition lies in our innovative proposals and our ability to bring along with us investors and industries which can create a whole airport community. This includes providing more air links, and building up MRO (maintenance, repair and overhaul) operations capabilities, logistics hubs and other new revenue streams.’
Source : Business Times - 15 March 2008

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