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NEWS Last modified on November 18, 2014

Airport PPP and UK capacity crunch on agenda at aviation conference

A proposed Public Private Partnership (PPP) transaction for St Lucia’s Hewanorra International Airport and London’s capacity crunch were just two of the topics on the agenda at yesterday's Investing in Airports Summit in Athens.

More details of the Hewanorra project will follow in the coming weeks, but the government of St Lucia and operator, the St Lucia Air and Sea Ports Authority (SLASPA), are looking for a private investor to operate and develop the gateway, which handled 690,000 passengers in 2013.

Up for grabs is a 30 year concession for an investor prepared to invest $118 million on a new terminal and other key infrastructure and a further $90 million on the maintenance and repair of its existing facilities.

In an ideal world, the transaction will be take place next year and the airport will get the new terminal by 2018.

SLASPA’s general manager/CEO, Keigan Cox, told Airport World: “We are looking for private sector knowledge and know-how as well as financial investment. We believe the time is right to develop the airport to facilitate passenger growth and tourism development.”

Passenger throughput at the Caribbean gateway is predicted to reach 1.6mppa by 2044 with the bulk of international passengers coming from the US, Canada, UK and France.

Sir Howard Davies, chairman of the UK’s Airports Commission, later spoke about the challenges facing Britain as it bids to build at least one new runway – capable of handing around 240,000 aircraft movements annually – in London and the South East by 2030 and possibly a second by 2050.

Davies, who has become the must have speaker at almost every aviation conference this year,  confirmed that the Commission will be announcing its final recommendation next summer and that it would either be a new runway at Gatwick or Heathrow (either a new north west runway or lengthening the existing northern runway).

The cost of is thought to be around £9 billion for Gatwick and £18 billion for either Heathrow option.

“We have been looking at the issue for a very long time and, in fact, no runway has been built in the London area since the end of the Second World War, but in spite of this, London remains the biggest O&D market in the world [taking into account all its airports] although it is not growing as fast as some," said Davies.

“It has done this by sweating the assets of London's existing airports while airports such as Luton, Southend and Stansted have filled up to cope with the lack of additional capacity at the main hub. So, we have managed to cope without new infrastructure for some time, but our view is we cannot carry on like this for much longer as demand will continue to grow, and by 2041 our airports will be completely full.”

He said the Commission had ruled out the Thames Estuary Airport because of the “astronomical” cost of both its construction and new transport links as well as the environmental impact and location “in the wrong place on other side of London” for most passengers.

Poking fun at London Mayor, Boris Johnson, he noted: “It is often referred to as Boris Island, but it wasn’t just one island, so perhaps Boris Archipelago would have been a more accurate description.”

He admitted that one of the reasons the addition of a new runway at Heathrow was a hot potato in the UK was because aircraft noise around the gateway was the “worst in Europe” for a major hub – three times that of Frankfurt and four-and-a-half times louder than at Paris CDG.

In the meantime, Davies revealed that the Commission is still seeking input from airlines about how they will react to either recommendation.

Other sessions during a busy day – made even livelier by demonstrations outside by dissatisfied Greek workers – included ‘Meet the New Owners: Deals of the Year 2014 – and ‘Finding Alpha in a Competitive Market’.

The annual summit precedes the 2014 Global Airport Development (GAD) conference, which starts today.

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