In Review: GAD World 2023 Points to a Revival in Airport PPPs

Jacques Follain

Paris

December 6, 2023

mod GAD World 2023 BCN Aeroporti di Roma

© Aeroporti di Roma

A month ago (November 7-9) the main players in the world of airport investment and development gathered for Global Airport Development World 2023 in Barcelona amid positive signs of a strong air traffic rebound after the pandemic.

All participants—from international operators, major investors, and key international banks in the world of infrastructure to DFIs and strategic consultants—were delighted to see the uptick. However, some doubts remain about the recovery of international traffic from Asia, particularly China, but also about the consequences of the conflicts in Ukraine and, more recently, the Middle East.

GAD World is the key annual conference for airport public-private partnerships (PPPs) and provided a perfect meeting place for participants to discover the major global PPP developments and see for themselves the recovery in activity four years after the start of COVID19.

The event was also an opportunity for attendees to discuss their top concerns during the panel presentations and a multitude of networking options. In addition, several countries were present to highlight their ambitions and/or projects.

WAPPP, the international association of PPP units and professionals, where I am chair, and its partner, Modalis Infrastructure Partners, were active participants and we left with some important takeaways.

The Importance of Sustainable Development

This year, more so than in the past, there was a heightened awareness of sustainable development challenges and the role airports are expected to play in the energy transition process, particularly as regards the integration of sustainable aviation fuels (SAFs) into their development plans.

Several experts referred to these challenges, and both investors and bank representatives confirmed that taking sustainable considerations into account in airport development and concession projects was becoming—and will increasingly be—a key criterion for access to airport infrastructure financing.

Furthermore, the agreement reached by ICAO member states at the third Conference on Aviation Alternative Fuels (CAAF/3) in Dubai in late November was a timely reminder about the importance of SAFs and ICAO’s long-term goal of reaching net-zero carbon emissions by 2050 for international aviation.

After the COVID years, with a few exceptions, only PPP projects or programs launched before the pandemic had been awarded. Many had to be suspended or even abandoned during this time. However, recent GAD discussions and presentations point to a revival—albeit very gradual—of airport PPP activity.

mod PPP mnl Ninoy Aquino International Airport

The bid deadline for Ninoy Aquino International Airport is approaching.

© patrickroque01 /

So What’s Coming Up?

First, a number of projects involving the sale of shares or even of the entire concession were mentioned or confirmed. For instance, the sale of a share of the F2i portfolio, and of Edinburgh Airport, and Budapest Airport. However, in certain cases, these transactions refer to assets that funds have to sell as they reach their term.

But it's also interesting to see several new projects mobilizing international players, such as the recent award of Poland’s CPK multimodal airport project to Vinci Airports and IFM; the concessioning of Manila's Ninoy Aquino Airport; a vast program of concessions in Saudi Arabia including Abha, Taif, Hail, and al Qassim airports; and Chisinau International Airport in Moldova. Saudi entities NCP and Matarat, plus the Moldovan Minister of Infrastructure and Regional Development gave presentations on these latter to the entire GAD audience.

Other projects were also mentioned by participants as potential or already well underway, such as airports in the Kyrgyz Republic and Uzbekistan; the main airport of Turks & Caicos; a group of airports in Pakistan; and the greenfield and brownfield concession projects of Indian airports announced by the AAI (Airports Authority of India).

These projects could face difficulties if access to bank loans remains difficult and expensive, and traffic risk is high. But the general feeling is optimistic about the recovery, and all the players involved showed—by their presence and their speeches—that the PPP option for airports remains a solution for the future, even if it needs to evolve to take account of the changing post-COVID context.

To sum up, GAD World 2023 provided many positive signals for the future of airport PPPs, in a period of recovery that remains, nevertheless, delicate.

[Jacques Follain is the Chair of the World Association of PPP Units & Professionals (WAPPP) Airport Chapter and a consultant specialized in airport infrastructure PPP transactions and management. During the past two decades he served as CEO and Deputy CEO of ADP International, in charge of the development of the international portfolio of Groupe ADP.]