Few investors want to commit to airports – think tank

MANILA, Philippines — Few investors want to commit to airports at present, and they cannot be blamed given the current situation in the aviation sector brought about by the COVID-19 pandemic, according to aviation think tank CAPA-Center for Aviation.

CAPA said that few investors want to commit to airports until requirements for testing and vaccination are much clearer and until the reduction in flights begins to ease off.

“As the pandemic goes into its second year, the impact on the prospects for the privatization of airports is evident,” CAPA said.

It noted that 2020 “was a year in which the development of many (although not all) airports came to a sudden stop, with capex being replaced in the pecking order by opex in most cases – and in many, simply by survival measures.”

In the Philippines, CAPA sees investor opportunities in the sector potentially picking up again this year.

However, it said “there may simply be too many airports in an around Manila for them all to be profitable.”

A private sector-led rehabilitation and upgrade of the Ninoy Aquino International Airport (NAIA), the country’s main international gateway, has yet to take off as the government and private proponents have failed to reach an agreement.

The government terminated negotiations with a consortium of conglomerates for the NAIA rehabilitation project in July last year. Last month, it revoked the original proponent status of Megawide Construction Corp., which also has an offer to upgrade the airport.

Two more companies – Philippine Airport Ground Support Solutions Inc. and San Miguel Corp. (SMC) – have also submitted their respective unsolicited proposals for NAIA.

Finance Secretary Carlos Dominguez on Tuesday said the government is ready to undertake the upgrade of NAIA if investor offers to do so would not meet government demands.

CAPA earlier said that local authorities, the government, and the corporations involved need to retain their focus on improving and expanding airport infrastructure in the vital Manila market.

“Congestion has been a long-standing issue that needs to be addressed for the future of the airline and travel industries. The loss of traffic from the pandemic gives some temporary relief to congestion and a good opportunity to tackle infrastructure issues, but congestion problems will undoubtedly return when demand bounces back,” it said.

Meanwhile, SMC’s P740-billion Manila International Airport project in Bulacan is set to start construction within the first quarter.

The Manila International Airport project will initially feature four parallel runways with a provision for two more, a world-class terminal, and an infrastructure network that will include a mass rail system to ensure easy connectivity. It will be capable of handling up to 100 million passengers per year.

In Cavite, a massive Sangley Point International Airport (SPIA) project is also being planned, which will be undertaken by Lucio Tan’s MacroAsia Corp. and state-owned China Communications Construction Co. Ltd. (CCCC).