Asia’s aviation market is expanding, and to cope with the increase in demand, airports need to look outwards. We catch up with Daniel Bircher, CEO, Zurich Airport International Asia, to find out about the latest PPP trends in the region.
What trends are you seeing in airport PPP models in Asia?
There are different PPP models and strategic partnerships that we have come across. Obviously, each country has a different approach; partnerships are also dependent on the foreign direct investments limits that these countries have. Apart from that, we’ve seen quite a bit of greenfield projects, which is understandable because the growth has been phenomenal in Asia over the last couple of years.
What does this say about the attitude towards airport privatisation and how is it changing?
If I look back to the last 10 years, I think we have come to a phase where the growth of the middle class and their available disposable income allowed aviation to grow. Aviation has grown tremendously and with that, the necessity to build and enhance the infrastructure is coming along. Many of the states don’t have the funds or the capacity to do all these developments so that is surely a positive thing for the industry.
What sort of opportunities are investors interested in as a result?
The investors always look for stable regulatory regimes. No surprises, clear processes of determining tariffs, tariff increases, financing condition, risk sharing that is adequate to the project… This is something that has not really changed. What has changed is that in some countries there are more equity funds, infrastructure companies, or even companies that have nothing to do with aviation entering the market. So there has been a slight change there.
Join the conversation and meet Daniel Bircher at GAD World!
