Saturday, 9 June 2018

International Air Transport Association Warns Governments Against Privatising Airports

The International Air Transport Association (IATA) has warned governments against privatising airports in a bid to upgrade them.

Several governments in Europe and America have either fully or partially sold airports to the private sector to inject funds for giving the facilities facelift as passenger numbers rise.

It is important that governments take a long-term view focusing on solutions that will deliver the best economic and social benefits.

Selling airport assets for a short-term cash injection to the treasury is a mistake, said Alexandre de Juniac, IATA’s Director General on Monday.

IATA added that short-term financial gains based on poorly-thought out privatisation moves run the risk of un-doing long-term social and economic benefits that can be achieved through well-thought decisions.

According to data by the Airports Council International, passenger numbers at the world’s 20 busiest airports grew to 1.5 billion last year, an increase of 5.2 per cent from 2016.

At least 40 per cent of European airports are partly under private ownership, through long-term leasing or concession, says the Annual Privatization Report on air transport released in April.

Leading airports such as Heathrow and Zurich are fully privately owned while in Africa, Cape Town International Airport is partially under private ownership.

Last year, Nigeria opened up ownership of all government-owned airports to private investors as part of reviving the facilities that for years have suffered neglect and dilapidation.

German government sold 82.5 per cent of its ownership in Frankfurt Airport to HNA Airport Group of China last year.

France started efforts to sell 50.6 per cent of its ownership in Aeroports de Paris for 8 billion euros ($9.36 billion) in March.

In Serbia, airports concession holder and operator Vinci Airports secured a 25-year concession for ownership of Nikola Tesla Airport in Belgrade, in January.

Under the deal, the private firm will spend $1.2 billion to upgrade the terminal and runaways while paying the government $500 million.

Juniac added that privatisation does not guarantee solutions for airport challenges globally.

Tourism Observer

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