Global airport construction and investment report mid-2024 – Part 2 – Americas, Middle East & Africa
This second part of a biennial inspection of infrastructure and investment projects at existing and new airports concludes with an examination of the Americas, the Middle East and Africa. The Asia Pacific and European regions were investigated in Part 1.
Although such activity has reduced everywhere, investment in existing North American airports remains solid, especially at the major gateway/hubs, while at a lower level in the US it is supported by acts passed by the House and Congress since the COVID-19 pandemic.
Investment in new airports throughout the continent remains painfully low.
In Latin America and the Caribbean there is much activity centred on Brazil, both for existing airports and new ones - although some of the new airport projects have dragged on, and have entered the arena of 'speculative'.
The Middle East bears witness to its preference for giant airport projects, which in themselves are testimony to its role as the world's intercontinental hub. Two projects in the UAE and Saudi Arabia weigh in at over USD60 billion between them.
There are fewer new airport projects in the region, those that exist being in Iran and Iraq, but more will be required in Saudi Arabia.
Finally, in Africa, and in the way of the continent, there are numerous speculative projects for large new terminals and new airports, some of which may never go ahead.
- Much of the airport infrastructure investment in North America is going into projects at large US gateway/hub airports, although various government acts continue to direct aid elsewhere.
- In contrast, the investment in new airports in North America requires a microscope to spot it, but that may change as more public-private partnership deals for general aviation facilities are signed.
- Brazil is the centre of attention in the LAC region, and quite some investment in the region is in smaller airports.
- Brazil is also home to the largest new LAC airport project, at São Paulo, but it is not one that will be realised for many years yet.
- The Middle East is dominated by two huge expansion projects in Dubai and Jeddah, but smaller airports seek to make their mark internationally.
- New airports in the Middle East are fairly thin on the grounds, mainly in Iran and Iraq, but additional facilities will probably be needed in Saudi Arabia.
- Africa is no longer the ‘bridesmaid’ – there are numerous large scale new airport projects, but they are often tentative, to say the least.
- One that is not is at Kigali, the capital of Rwanda, and with large-scale foreign investment it will be a torchbearer for new airports throughout the continent when it opens.
- Investment levels at existing African airports, though, remain low.
Construction activities at airports took a back seat during the COVID-19 pandemic
It is over two years since CAPA - Centre for Aviation published its last global airport construction and investment survey - one of several such reports during the past decade.
At that time, many construction activities were suspended or had been cancelled altogether in the midst of the COVID-19 pandemic, although in some instances they did continue.
Since then the world has had to contend with the invasion of Ukraine, and also the knock-on effect on supply lines, business and inflation well beyond that country's borders. All of these have contributed to an ongoing economic downturn.
Consequently, while the full impact of the pandemic will take years yet to play out, in the near term it has reshaped the entire infrastructure industry in four ways: intensifying its focus on operational resilience, the affordability of that infrastructure, the deployment of new technologies, and the need for sustainability.
Those are important reasons why infrastructure investment in both existing and new airports has close to halved since before the pandemic.
Investment levels in airport projects have shrunk over the years - from USD800 billion to USD330 billion
This is the second of a two-part report into where construction and investment in the airport sector is focused at present.
The first part included an introduction which concluded that investment levels in airport projects globally have shrunk over the years, from USD800 billion to USD330 billion, and an examination of the position in Asia Pacific and Europe.
The second part examines airport infrastructure in the Americas, Middle East and Africa, using the same format - infrastructure projects at existing airports, then new airports under construction or planned.
'Americas' is divided here into two categories: namely North America, which means the United States, Canada, and Greenland; and Latin America, i.e. South America and the Caribbean.
(Note, though, that while Greenland is geopolitically part of Europe, it is regarded as being in North America for these purposes).
North America -109 infrastructure projects at existing airports; value close to USD70 billion
In total, North America counts 109 known projects at existing airports, with investments totalling USD68.4 billion, at an average of USD627.5 million.
The emphasis is on the US (98 projects), with nine in Canada and two in Greenland.
Construction projects for existing airports, incomplete, North America
The US is notable for the size of the projects taking place at its largest city gateway airports, which stand in stark contrast to the paucity of investment in new airports.
Nine of the top 10 developments at existing airports listed by investment value are located in the US, the exception being Vancouver Airport in Canada (although Montreal's Pierre Elliot Trudeau airport is in 11th place, but there are no other projects in Canada valued above USD225 million).
Top 10 existing airport projects in North America by level of investment
The top 10 projects cost USD55 billion; private sector increasingly involved through P3s
Those top 10 projects alone add up to USD55 billion.
A great deal of investment is flowing into airports there by way of various infrastructure and sectoral support acts passed throughout the Biden presidency during and following the COVID-19 pandemic, and that will continue for several years to come.
The private sector is also involved by way of public-private partnerships (P3s). All three of the main New York/New Jersey airports have benefitted from them and two are in the table above, while the largest P3s of the lot, in two separate projects at LaGuardia airport, are now complete.
P3s will continue to increase in the US, and probably more so if there should be a change in the presidency in Nov-2024 (as the previous administration was more attuned to the involvement of the private sector in air transport infrastructure).
New airport projects slump almost to zero
There could not be a more obvious contrast than with new airport projects in North America - and especially in the US.
It appears that the prevailing philosophy remains, namely, that it is better to make do and mend the existing infrastructure rather than build new.
In a recent CAPA - Centre for Aviation interview with the retired FAA Director Kevin Willis, he opined that the reluctance to build new airports in the US can be attributed to several factors: community opposition, environmental impact, land availability, cost, and time.
To those factors might be added the reluctance of so many elected officials in the public sector to commit to large scale projects, which they believe would have to include the private sector, simply because the public one remains short of the financial resources to fund them. This is a reluctance that has been seen countless times in the failure of lease deals for airports of various sizes. Also, of course, the fear that such private sector involvement might reduce their influence and power.
Accordingly, the CAPA - Centre for Aviation Airport Construction Database (ACD) is currently reduced to just two examples of new airports in North America, both of them in the US, one of which is in train at the moment while the other one remains on the drawing board.
There are none at all in Canada, CAPA - Centre for Aviation having given up on the notion that a new airport for Toronto will ever be built to the east, at Pickering.
New airport projects in North America
There may be more local examples, like the Airglades airport in Florida, which is to act as a reliever airport for Miami International in respect of cargo operations, and was held up by FAA regulations concerning its status as a privatised commercial airport.
For example Avon Park, in central Florida, has applied to FAA to lease its airport under the Airport Investment Partnership Program (AIPP). Currently a two-runway general aviation airport Avon Park could be regarded as a new commercial airport if its intention is to handle public scheduled or charter services, which is likely the case.
Moreover, organisations like AvPorts are converting general aviation airports into small regional commercial facilities and the same interpretation might apply. This was highlighted in Commercialisation of small US Airports (part one: P3 deals rally in Paine Field and New Haven; part two: Avports adds to its portfolio in Virginia), a two-part CAPA - Centre for Aviation report from Nov-2023.
But for now it is only the Chicago South airport - another proposed cargo facility - that carries the torch for new airport development on an entire continent. That at least is edging forward, the Illinois legislature having passed a House Bill in the summer of 2023 requiring the Illinois Department of Transportation to launch a prequalification process for a public-private partnership to develop the long-planned airport. Then the proposal being endorsed in Feb-2024 by the Chicago Southland Chamber of Commerce as its "top infrastructure priority" for 2024.
The DoT was working on a request for proposals for the project, with an 01-Jul-2024 target date.
Latin America & Caribbean (LAC) - 56 infrastructure projects at existing airports; value USD13 billion
Brazil is the centre of attention in the LAC region, with 19 projects and two of the three largest, which are also the only three to exceed USD1 billion in investment expenditure.
Within the LAC region the total is 56 projects valued at USD13 billion, an average of USD232.1 million, which is somewhat less than in North America.
Construction projects for existing airports, Latin America and Caribbean
The investment in LAC is not necessarily in the largest airports.
For example, the greatest expenditure is on Campinas Viracopos airport, 115 km/70 miles north from Brazil's and the continent's largest city, São Paulo. It was only the 17th busiest airport in LAC in 2023. It is mainly a domestic airport, and one that hosts only LCC services. However, the expansion there, which includes a second runway and a new cargo terminal, will run through to 2042.
Construction works at Rio de Janeiro's Galeão airport are valued at USD1.4 billion, again with a lengthy timeframe - in this case, to 2039, in what seems to be a deliberate attempt by the government to influence growth patterns there. Galeão is not the busiest airport in Rio; that accolade going to the wholly domestic Santos Dumont airport.
Galeão is half-owned by the state operator Infraero; the other half is concessioned, and Santos Dumont remains wholly within Infraero's control. Plans to reconcession Galeão and concession Santos Dumont have been put on hold by the Lula government.
Also interesting in this table is the concluding work at Lima's Jorge Chavez airport - one of the joint-owner Fraport's most successful foreign ventures - at Santiago airport in Chile, which is operated by the Nuevo Pudahuel French/Italian consortium (at the airport there was very strong traffic growth through to 2019), and the Howard Hamilton airport in the Turks and Caicos Islands, which will be redeveloped in a USD360 million public-private partnership deal that will not begin until 2028.
Top 10 existing airport projects in Latin America and Caribbean, by level of investment
There are 15 new airports under construction or planned in the LAC region, at a value of USD11.4 billion, or USD760 million each on average.
By far the biggest of them is a projected USD3.8 billion 'New São Paulo International Airport', which was scheduled for completion in 2024. But that was in 2013, when Brazil's then president Dilma Rousseff said that a privately operated third international airport serving São Paulo would be constructed at Caieiras, 40km north of the city.
That is still the location, and it will be on land majority-owned by the Brazilian infrastructure company CCR, but the project is not likely to be realised for another 8-10 years.
Also back on the agenda now is Chinchero Cusco airport in Peru, a private sector project which was replaced by a government one (although it could possibly be concessioned out later), and the new Cartagena airport, which when completed will give the Colombian city two airports.
New airport projects in Latin America & Caribbean
Middle East- giant projects at Dubai and Jeddah
There was a spate of announcements mainly concerning new terminals at primary level airports in the region, such as Sharjah and Kuwait during 2023, which boosted the total of construction activities there considerably.
Even so, the total number of known projects amounts to 11 for the region, with investment of USD73.7 billion - most of it the Dubai World Central and Jeddah King Abdulaziz airports - at an average of USD6.7 billion, which reflects the huge investment being made in the principal gateways in the region.
Taking those two projects out, the average investment falls to USD1.2 billion; but that is a significant amount in its own right, as a number of airports attempt to venture outside of being merely an origin and destination facility with some hub traffic, to rival to the 'big three' airports of Dubai, Doha and Abu Dhabi, none of which have projects of any major significance at this time.
Top 10 existing airport projects in the Middle East, by level of investment
The region is almost as loath to build new, greenfield - or perhaps that should be brown desert - airports as is North America.
That might partly be explained by the proximity of the existing airports in the Gulf region and the very heavy aircraft movements around them - airspace is at a premium and is complicated by military demands - together with the fact that most of the major cities already have a large airport servicing them, and demand for new airports to service, for example, low cost carriers is low.
Thus, most of the activity recorded (six new airports) is in Iran and Iraq, where the population is spread over a greater number of populated areas.
Dubai World Central has been a 'new airport' that was not developed as originally intended over a period of more than a decade, but the announcement earlier in 2024 that it will be, finally, upgraded (over the course of another decade) now identifies it as an existing airport, which is why it is not in the table below.
The position can change, of course, especially in Saudi Arabia, where huge city developments such as NEOM and The Line will inevitably require facilities that transcend what is offered presently.
New airport projects in the Middle East
Africa - 24 known infrastructure projects at existing airports; almost as many new ones
There are 24 known infrastructure projects at existing airports in Africa, to a value of USD2.3 billion, or USD96 million each on average; well below the average figure elsewhere.
Construction projects at existing airports in Africa tend to be on a smaller scale than elsewhere. But then, although the 'prospects' for passenger numbers throughout the continent consistently remain positive and growth has been universally strong in the first half of 2024, it is also the case that the busiest airports on the continent in 2023 only managed 25 million passengers, and some of the top group are in the Canary Islands, which is a Spanish (European) territory.
New airport projects in the Africa
In fact, not a single African airport got into the world's top 50 by passenger numbers in 2023, falling short by 15 million passengers.
Hence, it is perhaps not such a surprise that one of the largest project at the moment is one at the Cape Winelands airport - a general aviation facility that is to be converted into a commercial one to provide some competition to the existing ACSA-managed Cape Town International Airport, at a cost of USD372 million. This was highlighted in Big expansion plans for Cape Winelands Airport as it seeks to compete with Cape Town International, a CAPA - Centre for Aviation report from Jan-2024.
And the smallest of the Top 10 projects, in Marrakech, Morocco, amounts to only USD85 million in investment outlay.
Top 10 existing airport projects in Africa, by level of investment
The expansion at Dakar in Senegal was long sought after, and not only by the Senegalese.
Dakar is an important entry point into West Africa from North America, and is the location of numerous western businesses' and organisations' regional offices. It is also growing as a technology hub.
Lanseria Airport, situated between Johannesburg and Pretoria, is arguably South Africa's most successful privately owned airport, and its expansion plan includes an aspiring 'airport city', while a similar type of development is under way at the ACSA-owned and managed Oliver Tambo International Airport, which is the continent's second busiest.
A different situation applies where new airports are concerned.
There are almost as many new ones as there are projects at existing ones - but some of them are speculative, to say the least, including the new Addis Ababa International Airport in Ethiopia, which seems to be on hiatus, along with the New Khartoum Airport in Sudan.
New airport projects in Africa
One that isn't speculative is the Bugesera Airport in Kigali, Rwanda. It is part-funded by Qatar Airways, which is building a joint airline/airport base there and may extend its interests into Southern Africa too. It has become something of a talisman for the entire continent. It was highlighted in Qatar Airways commits to aviation expansion in Rwanda, also in Southern Africa generally, a CAPA - Centre for Aviation report published in May-2024.
There have also been recent developments at the Lekki-Epe airport in Nigeria, where it was just announced that the Lagos state government intended to establish a sovereign investment fund for strategic investments, including the construction of the Lekki-Epe International Airport.
Slowly but surely, Africa is starting to attract the foreign interest and investment that it desperately needs in order to modernise its airports, to make them more attractive to both the indigenous population and the growing number of visitors, who expect as close as possible to western standards.
But it will need much more of it.