The airport industry must continue to anticipate and adjust to changes in the wider world as it fulfills the demands of its customers and communities, safely, securely and sustainably.
Demographic changes, shifting business models and technological disruptions that have occurred in a relatively short period of time, have propelled airports to evolve into complex businesses.
Whether airport operators are financed and operated by public or private entities, these changes have important implications for the business and its revenue streams.
The commercial side of the airport business, most notably retail, is experiencing increased competitive pressures which limits its growth prospects over the short run in mature markets.
New aircraft fleets coupled with greater airline consolidation and heightened airport competition has meant that the aeronautical side of the airport business is also facing intensified competition.
Meanwhile, air transport demand remains resilient and irrepressible, with passenger numbers soaring year-after-year. Global traffic is expected to be reach a volume of over 22 billion passengers by 2040 at an average growth rate of 4.5%.
While airports welcome future growth prospects, the investment needed to accommodate such growth outpaces the investment planned. Many governments are either unable or unwilling to finance these much-needed capital investments.
Privatisation or public/private partnership arrangements have become more common solutions to fill the infrastructure gap. Of the top 100 airports in terms of passenger traffic, the number with private sector participation grew to 51 in 2017, five more than in 2016. Of the top 500 airports in 2017, 39% had private sector participation, a 1% increase over the previous year.
A wide variety of privatisation models have proven to be effective, embodying unique combinations of government goals and private investor requirements; no single model fits all circumstances.
Just as airport managers must adapt to new business realities, so must policymakers and regulators. That is, regulators must also adjust their levers to reflect the new playing field and to fill the infrastructure gap.
In this climate, do the old rules of the game still apply? What impact do these new economic paradigms mean for future capital investments, the risk-reward trade-off and the role of the regulator?
We will explore such questions at the upcoming 11th Annual ACI Airport Economics and Finance Conference and Exhibition, taking place from March 12-14, 2019, in London, United Kingdom, under the theme ‘Paradigm shifts in airport business’.
Through sessions, presentations, live interviews and panel discussions, investment experts, industry leaders and top-level decision makers and influencers will cover pertinent topics such as: Economic regulation in the era of airline consolidation and airport competition; The changing dynamics of airport commercial revenues; The fork in the road on Brexit eve; Where do we go from here?; Roadmaps to manage scarce capacity; The economics and politics of slots; Competing for passengers; Route development and incentives; Risky business; Crafting the concessions agreement in foreign lands.
And, we continue our successful pre-conference collaboration with the World Bank. They will open with the 5th Annual ACI-World Bank Aviation Symposium to explore the risks and opportunities of global lenders and investors in the airport industry.
Participants can expect valuable analyses of global and regional economic forces that airport executives and investors need to understand.
The programme we have prepared will allow decision makers to reflect upon and share their lessons learned, renew collaboration, and jointly craft investment and growth strategies.
I look forward to seeing you in London to partake in the discussions that will help set a strong foundation for our industry for the next years.