Sunday , October 22 2017

Airports privatisation can drive growth

growth copy

 

Dubai / Emirates Business

As passenger volumes continue to grow and airlines worldwide expand their fleets, airport infrastructure is fast becoming a growth bottleneck. Privatisation has an important role to play in eliminating this barrier to growth, according to Oliver Wyman’s ‘Leveraging the Private Sector to Improve Airport Infrastructure’ report. The paper examines the issues and challenges of airport privatisation, and outlines what can be done by governments and potential investors to ensure successful airport privatisations.
“The benefits of airport privatisation, if managed diligently, can be significant,” says Jeff Youssef, Partner, Oliver Wyman Middle East, who co-authored the report.
“After a lull, airport privatisations became active again between 2012 and 2015, with the most substantial activity seen in South America, the Middle East and
Europe.
“The predicted exponential growth in passenger volumes worldwide will require improvements and expansions of aviation infrastructures for many years to come. Privatisation will be a key tool in securing funding for these projects.” Youssef said that previous experience shows how privatisation can bring benefits not only to local economies and governments, but it can also positively affect individuals.
He added if governments consider airport privatisations as the answer to funding the improvement and expansion of airports, they need to start acting now. “An eventual rush in the future to speed up the process could compromise the success of transactions,” he said. “If traffic levels continue to rise as projected, acting too late could mean falling behind other countries. This would create a gap that is difficult to close. Our recommendation is to start now to assess the needs of a privatisation process, and to prepare for the
challenges in the years to come.”

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epa05051248 (FILE) A file picture dated 26 June 2014 shows Thai Airways aircraft lined up at Suvarnabhumi International Airport in Bangkok, Thailand. The Federal Aviation Administration (FAA) downgraded Thailand's aviation safety ratings on 01 December 2015. The US body deemed that Thailand's 'lacks laws or regulations necessary to oversee air carriers in accordance with minimum international standards.' As a result of the findings Thailand's safety rating was downgraded from Tier 1 to Tier 2. The downgrade to Tier 2 means that Thailand will not be granted new flight routes to the United States although existing routes can continue operating. The FAA downgrade is the latest blow to Thailand's civil aviation body. The country's Department of Civil Aviation was audited by the UN affiliated International Civil Aviation Organisation (ICAO) in January and serious gaps were found in safety standards. As part of its audit, the UN-affiliated watchdog gave Thailand's government 90 days to address the problems. Despite internal reshuffles by Transport Minister Prajin Juntong, ICAO formally red-carded Thailand's Department of Civil Aviation in June.  EPA/BARBARA WALTON

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