What can we tell about Changi Airports International’s Growth Strategy through its Current Airport Investments?

Justin Lee

Singapore

July 30, 2021

Changi Jewel

Changi Airports International, a subsidiary of Changi Airport Group, is a leading investor, consultant and manager in the global aviation market.

The company has managed projects in more than 60 airports in over 20 countries, including Brazil, China, India, Japan, Russia, Saudi Arabia and the Philippines. Changi Airports International’s current overseas airport investments include:

  • Tom Jobim International Airport in Brazil (51% stake in RIOgaleão)
  • Four airports in Russia (30% in Aerodynamics)
  • Fukuoka Airport in Japan (21% stake in Fukuoka Airport Co., Ltd)
  • Clark International Airport in the Philippines (15% stake in Luzon International Premiere Airport Development Corporation)
  • Labuan Bajo Airport in Indonesia (20% stake in consortium with PT Cardig Aero)
  • Durgapur Aerotropolis in India (30% stake in Bengal Aerotropolis Projects Limited)
  • Chongqing Airport Group in China (49% stake in Sino-Singapore Chongqing Airport Commercial Management Co., Ltd,)

The global COVID-19 pandemic which started in early 2020 resulted in an unprecedented decline in global air traffic – IATA has estimated a 65.9% year-on-year decline in demand in 2020 – and reduction of passenger traffic throughout the airports in Changi Airport International’s investment portfolio. This has led to a negative impact on operations and financials across these airports.

Source: Wikimedia Commons

At Brazil’s Tom Jobim International Airport, passenger traffic for 2020 fell by 65.7% to 4.63 million. The airport operator saw a 45.8% decline in turnover to BRL 490.9mn (US$94.4mn) while its net loss deepened from BRL 1.64bn (US$310mn) in 2019 to BRL 1.81bn(US$350mn) in 2020. At Fukuoka Airport, total passenger traffic fell by 71.8% from 23.0 million in the year ended 31 March 2020 to 6.5 million in the year ended March 2021.

The airport saw its turnover plunge by 64.6% in the year ended 31 March 2021 to JPY 14.6bn (US$0.13bn) while its net loss for the same period deepened to JPY 22.0bn (US$200mn) from the net loss of JPY 9.3bn (US$84mn) in the year ended 31 March 2020. Across Russia’s four CAI-invested airports in Vladivostok, Sochi, Krasnodar and Anapa, total passenger traffic saw a 21% year-on-year decline in 2020, relatively less than the 65.9% global average dccline estimated by IATA.

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