Financing future prosperity

Angela Gittens,  Director General, Airports Council International (ACI)

Angela Gittens, Director General, Airports Council International (ACI)

Resilient infrastructure is the bedrock for the sustainable development of modern economies. In many parts of the world, airport operators face capacity constraints which has resulted in bottlenecks and flight delays.

ACI forecasts a 33 per cent growth in global passenger volumes from 2015–2020, a volume that would cause many national governments to face a predicament where the surge in air transport demand outstrips available airport infrastructure. This is particularly relevant to the Middle East, where passenger volumes in the medium-term is expected to grow more than any other region, at 9.6 per cent annually on average.

Established in 2015, the United Nations Sustainable Development Goals (SDGs) call on the international community to pledge a plan of action based on 17 global targets that aim to ensure prosperity, peace and to eradicate poverty by 2030. SDG 9, “[b]uild resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation,” is directly pertinent to the airport industry and the economies that it serves around the globe.

Under the umbrella of SDG 9, ACI has released a Policy Brief on airport ownership, economic regulation and financial performance, that describes the state of the industry based on a robust dataset and inventory of the world’s major commercial airports and puts forth practical policy recommendations to ensure that investment is attracted to the industry. The Brief emphasizes the need for flexibility and consistency in regulatory frameworks that govern airport revenues and capital investments. Specifically, it advocates a move toward well-crafted economic incentives that enables private equity to flow to the airport industry and helps contain the level of risk of such a capital intensive investment.

The fundamental motive for airport privatizations or public-private partnerships is to finance what States are no longer able or willing to finance. Where infrastructure constraints persist and renewal is required, airport companies, private investors and other consortia provide viable solutions to many of our infrastructure problems. Private sector stakeholders bring commercially-driven management and expertise, which in turn generate value and innovations for airline customers and passengers, but they also expect a return for the risk in investment.

ACI does not however prescribe any specific ownership model. Each ownership model should guarantee flexibility to airport operators in developing both the aeronautical and non-aeronautical sides of the business to achieve a reasonable return on investment.

Airports are wealth generators for other stakeholders in the air transport value chain and their socio-economic impact and multiplier effect extends to the broader economy. ACI seeks to work in partnership with governments, regulators and other aviation stakeholders to ensure that we develop a fertile ground for industry investments to achieve the 2030 SDG.

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