The increasing significance of the Airport Group

The top 38 largest investor-owned (fully or partially) airport companies represented almost a third of 2022 world airport revenue - half of that was at just five companies

Based on 2022 revenue statistics from the world's 38 largest investor-owned airport companies compiled by the Reason Foundation (USA), the five largest are Groupe ADP (Aéroports de Paris), AENA Aeropuertos, Heathrow Airport Holdings, Fraport, and VINCI Airports.

Combined revenue from these airport companies totalled USD38.9 billion, representing 32.5% of the total 2022 world airport revenue of USD119.8 billion.

And those top five companies accounted for half of that of the top 38 countries - USD19.1 billion, or 16% of the global total revenue.

With respect to global airport PPP/P3 transactions, both the number and value of projects reaching financial close in 2023 were down sharply from 2022, but that year's USD17.7 billion in airport P3 deal value was still well above the USD11.2 billion low point in 2020, the first pandemic year.

In 2023, the largest fraction of projects was in the greenfield category - newly constructed airport facilities, which accounted for 43% of total transaction value and 44% of projects.

The private airport industry is more financially resilient than government-owned airports and has increased its revenue share

Despite the United States having led the global aviation recovery - at least in its domestic segment - measured against its lack of private commercial service airports, the private airport industry globally has proven to be more financially resilient than government-owned airports.

As a result, privatised airports have increased their worldwide revenue share.

For pre-pandemic comparison, investor-owned airport companies collected USD48.3 billion - or 26.6% - of USD181.7 billion of 2019 global airport revenue, versus 32.5% in 2023 as above.

The airport group model has played its part in that, and is shown to add value as measured by numerous metrics

This resilience in the private sector may be explained at least in part by the increasing importance of the airport group model, in which private companies manage multiple airports.

A study published in 2022 was commissioned by Airports Council International (ACI) - 'Value Creation by Airport Groups: A study on the Airport Group operating model, its role in the aviation ecosystem and the benefits of the model'. ('Airport Group' definition used in this study can be found at the end of this report).

It identified 27 airport groups comprising 425 airports, and they collectively handle 29% of global passenger traffic and 23% of cargo tonnage.

The report found numerous ways in which the airport group model adds value, such as economies of scale, increased ability to finance capital improvements, and economic resilience.

The organisations that participated in the study are listed below.

Participating and non-participating airport groups

Source: ACI/ICF/Oxford Economics.

Not all of the identified airport groups chose to take part in the study.

Eight, including both of the Russian ones, did not do so. (Russia has several large private sector airport group operators but, as with China, where they are all in the public sector, in almost all cases they operate domestic airports only).

All are actual operators rather than only hands-off investors.

Not all of these groups are private sector ones, wholly or partly

Not all the groups might be classified as 'private' ones for a variety of reasons.

For example, Capital Airport Holding, which operates Beijing's airport and numerous others throughout China (and which sponsored the report), is wholly owned by the General Administration of Civil Aviation of China (CAAC).

The Spanish operator AENA is still 51% owned by the government, and Malaysia Airports Holdings Berhad is currently undergoing an ownership transition by which the country's sovereign wealth fund will be left with a sizeable chunk of the equity.

The French state owns 51% of Groupe ADP, while 32% is a free float on the Bourse stock exchange.

Manchester Airports Group is 55% owned by Manchester City Council and nine other cities and boroughs in the city-region, and Korea's Incheon International Airport Corporation is wholly owned by the state in the form of the Ministry of Land, Infrastructure and Transport.

There are other examples, but the point is made - the survey and report should not be taken as an endorsement of the private sector's role in airport groups and their influence, rather only an acknowledgement of it.

Several groups that might have qualified where omitted

Moreover, there are other groups that might have been included, which appear to satisfy the appropriate definitions that were used. It is possible that they were asked and declined.

They include ACSA (South Africa); the third private sector Mexican operator, Grupo Aeroportuario del Centro Norte (OMA), although unlike the other two OMA, it does not have foreign assets; CCR Aeroportos SA of Brazil; Adani Airports in India; Hainan Airport Infrastructure and Yunnan Airport Group (China); Macquarie Group; Aeroport Nice Côte d'Azur; Italy's SAVE and Korea Airports Corporation.

Also several groupings in the USA might have qualified - for example in New York, Chicago, Houston and Dallas, but ownership complications might have impacted on their inclusion.

Even so, 19 respondents is a perfectly valid number on which to build a survey report.

In summary, ACI concluded that over the past 25 years the airport industry has changed immeasurably.

It is the private sector that has facilitated the rise of the group concept

Until the 1990s, virtually all airports were effectively state-run.

In the following years, the industry has opened to external investment in many markets, creating space for a wide range of different ownership and operating models.

This context enabled specialised airport operators to leverage their expertise to expand their operations both internationally and domestically, ultimately giving rise to the 'Airport Group' model.

Not only does the group model provide an avenue for growth, but it also provides the opportunity for airport operators to monetise accrued experience and expertise, diversify their risk profile, achieve economies of scale, and benefit from a wider and more diverse pool of staff and expertise.

This model has come to play an increasingly significant role in the industry, and yet there has been little research conducted into how these groups operate and generate value and benefits.

The aim of the study was to address this gap. Airport groups were found to account for 29% of global airport passenger traffic and 23% of global air cargo volumes in 2019, the immediate pre-pandemic year.

Airport groups contributed USD1 in every USD250 of global GDP, and helped sustain one in every 270 jobs

They also make an important contribution to the global economy.

Through their airports' operations, spending and wage payments across the globe, airport groups supported a USD74 billion gross value-added contribution to global GDP, 2.7 million jobs, and USD12.8 billion in payments to governments in 2019.

In addition to this, by providing the infrastructure for over 271 million foreign visitors to travel to their destination, airport groups facilitated USD266 billion in tourism spending (or USD980 per visitor). This spending supported an estimated USD350 billion gross value added (GVA) contribution to global GDP - which is equivalent to USD1 in every USD250 of global GDP.

This spending also sustained nearly 13 million jobs (one in every 270 jobs) and stimulated an estimated USD82 billion in payments to governments in 2019.

Also, by enabling connections between millions of people across the globe, airport groups facilitate knowledge sharing between different groups of people and open up foreign investment opportunities. By 2040, ACI estimates that the level of connectivity provided by airport groups in 2019 will have boosted global long-run productivity by 0.55%.

Airport groups in numbers (2019)

Source: ACI/ICF/Oxford Economics.

Unique benefits both internally and externally...

As well as analysing their increasingly significant role in airport management and operation, the ACI report illustrates some of the unique benefits that this form of ownership and control can provide to its employees (internal value creation) and to its shareholders, passengers, and local communities (external value creation).

The main themes are identified as:

• Size and scale-related benefits (e.g. economies of scale/ resilience/capex investments);
• Group support and direction (e.g. resources/target setting);
• Airport community effect (e.g. knowledge sharing/trialling new technologies.

...and especially for small and medium sized airports which can benefit from otherwise unobtainable resources

These attributes of airport groups can have positive impacts, both for the operating group, but also for the individual airports, and are probably most notable in the medium- and small-sized airports, which can benefit from levels of resources and expertise that would normally be out of reach.

A common theme among these behaviours is that they leverage expertise from a wider pool and encourage innovation. As well as helping airports to pursue a culture of continuous improvement, these characteristics will also be critical in implementing the wide-ranging and complex changes that are required to meet the ambitious decarbonisation goals of the industry.

Airport groups have up to five times the share of carbon accreditation over non-group airports

This was evident in the comparison of Airport Carbon Accreditation accredited airports among group airports and non-group airports, where it is clear that airport groups have up to five times the share of accreditation compared to non-group airports in each of five size categories from < 500,000 ppa to >40 mppa.

Share of airport carbon accreditation: accredited airports by airport size in 2019-2020

Source: ACI - Airport Council International; ICF Analysis Case studies, Airport Carbon Accreditation program.

Significant reduction in operating expenses per passenger observed at group airports

In terms of financial performance, the study analysed the financial Key Performance Indicators (KPIs) for airport groups, and there was some evidence here that the characteristics described above are having tangible impacts on financial metrics, most notably the significant reduction in operating expenses per passenger observed at group airports over the past five years.

Unfortunately there is no comparison with an average for non-group airports - although that would not have been a simple task - but the stand-alone evidence here is compelling in its own right.

Airport group: financial KPIs (2019)

Source: ACI/ICF/Oxford Economics.

$ = US Dollar (USD).

Airport groups have contributed almost a third of the global brownfield capital investment in the past decade

What is also notable is the role airport groups play in delivering infrastructure projects - investing USD144 billion in capex investment in the decade to 2019, spending USD6 per passenger on capex between 2014 and 2019, and having contributed almost a third of the global brownfield capital investment in the past decade.

Operating expenses have reduced, but so has non-aeronautical revenue per passenger

The only evident 'failing' is a 21% reduction in non-aeronautical revenues per passenger compared to 2014 when the reduction for non-airport group facilities was marginally less.

In contrast, a 26% drop in the measure of operating expenses per passenger was achieved in the same period, which was 10 ppts greater than that for non-airport group facilities.

A snapshot of the further evolution of these groups since the ACI report

One question that arises out of this exercise, two years after the report's publication and with a complete recovery from the COVID-19 pandemic anticipated in 2025 (as long as there are no other 'Black Swans lying in wait of course), is where are these groups going now?

Are they growing by acquiring more airports into the group? Are their finances improving?

The following table, compiled from CAPA - Centre for Aviation data, is of any significant airport additions to each of the 27 companies that were invited to respond to the ACI survey, potential acquisitions and disposals and appropriate snapshot financial data (Revenues/EBITDA/EBITDA Margin, in USD).

The airports are listed by the number of passengers they had in 2019, the focus year for the report, and the table includes all 27 companies invited to respond to the ACI survey. Heathrow Airport Holdings is not included because despite the financial muscle of that organisation (revenues) as revealed in the opening paragraph of this report, it is not a group, operating only one airport, unlike its predecessor, BAA plc.

Airport Group/Country	No. of airports in 2022 - ACI report	No. of airports in 2024 - CAPA data	Notes	Potential acquisitions and disposals	Financial results (USD billions [b] unless otherwise stated)
AENA Aeropuertos/Spain	55	48 (81)	AENA operates 48 airports in mainland Spain, while its international division is involved at 33 non-Spanish airports - all in the Americas.	Domestic airports likely to remain stable. AENA Internacional is active in Latin America and always likely to add airports there.	(FY2022) Revenues 4.5b/EBITDA 2.2b/Margin 48.9%.
Capital Airports Holding/China	53	53		No changes expected. Remains a wholly domestic operator.	(FY 2022) Recorded a net loss of approximately USD500 million, up from a USD303 million) net loss in 2021.
VINCI Airports/France	51	70		Very active in many markets, currently in the process of investing in Edinburgh (UK) and Budapest airports.	(FY2023) Revenues 4.3b/EBITDA 2.7b/Margin 62.8%
Fraport/Germany	23	24 (+ 5 US retail divisions within airports)	Has four autonomous divisions (Brazil/Greece/Slovenia/Bulgaria, plus a specialist US division)	Static where acquisitions are concerned. Lost St Petersburg Airport share to renationalisation.	(FY2023) Revenues 4.3b/EBITDA 1.3b/Margin 30.2%
Groupe ADP/France	11	11 (not counting investment in TAV Airports and GMR Airports).	Major investor into TAV Airports (q.v.) also into GMR Airports.	Little recent activity.	(FY2023) Revenues 5.9b/EBITDA 2.1b/Margin 35.6%.
MAHB/Malaysia	40	40	39 in Malaysia, one in Türkiye. Undergoing a change of ownership presently into a fully privatised entity.	Has been retrenching from international investments in recent years, most recently in India (2023).	(FY2023) Revenues 1.1b/EBITDA 0.5b/Margin 45.5%.
Royal Schiphol Group/Netherlands	7	8	Five in the Netherlands, one in a Dutch territory, the remainder foreign investments which have not increased recently.	Added Maastricht Airport 40% investment in 2023; divested cross-share in Groupe ADP in 2022. No other pending deals.	(FY2023) Revenues 2.0b/EBITDA 0.5b/Margin 25%.
Changi Airports International/ Singapore	9	6	CAI is equally a manager as well as an investor.	Nothing new in the pipeline.	(FY2022/23) Revenues 1.4b/EBITDA 0.6b/Margin 42.9%.
GMR Airports/India	3	6	Not including Groupe ADP's 49% stake in GMR	Reinvested in Hyderabad in 2023 and bid in MAHB privatisation (unsuccessful), Still active in India and abroad	(FY2020/21 [pandemic period]) Revenues 0.8b/EBITDA 0.145b/Margin 18.1%.
Grupo Ferrovial Aeropuertos/Spain	4	4	Ferrovial was an early investor in AENA. Now its airport holdings are all in four UK airports.	May offload some or all of its equity in those UK airports in 2024, including London Heathrow.	N/A
Flughafen Zurich/Switzerland	7	11	Nine of its invested airports are in Latin America. Total includes the NOIDA New Delhi airport (under construction).	Still active, especially in Latin America, but not to the degree that it was.	(FY2022) Revenues 1.1b/EBITDA 0.6b/Margin 54.5%.
AviAlliance/Germany	4	4	All in Europe apart from one in the Caribbean.	In 2024 has lost Budapest to a partial renationalisation, but gained majority control at Athens.	(FY2023) Revenues 0.5b/EBITDA 0.35b/Margin 70%.
Corporación América Airports/Argentina	52	52	Mainly in Argentina (Aeropuertos Argentina) and elsewhere in South America including Brazil and Ecuador. In Europe (Italy) and in Armenia.	No recent disposals or additions. Involved in a suspended deal for two concessions in Nigeria and intends further involvement in Africa.	Revenues FY2023 1.4 bn/net profit 0.23 bn. (No EBITDA figure offered).
Incheon International Airport Corporation/Korea	2	4	Small-scale investor outside Korea	Has invested in an Indonesian airport since 2021, bid in the PPP modernisation project for Manila International Airport, been short-listed to operate a new terminal at Kuwait Airport (already operating one there) and become a partner in a PPP project to build the new Central Polish Airport.	N/A
TAV Airports/Türkiye	12	15	Mainly active in Turkey and West/Central Asia; also North Africa and the Middle East.	Has not taken on any new assets this decade, other than Almaty Airport in Kazakhstan, but wishes to expand in its core markets. Also in Nigeria, when possible. Groupe ADP has a large shareholding (46.4%) in TAV.	(FY2022) Revenues 0.5b/EBITDA 0.32b/Margin 64%.
Munich Airport International/Germany	3	4	Fundamentally an airport operator/manager, training institute and ORAT readiness provider.	Active in Europe, North America and the Caribbean and will take charge of a new airport in Albania.	N/A
Atlantia/Italy (Mundys)	5	5	Has changed name to Mundys SpA since the ACI report. Operator of toll roads and airports. Primarily the investor in, and operator of, the Rome airports, but also the three Côte D'Azur Airports in France.	Not active currently. Last bid was in 2019 (St Louis Airport lease, USA).	Revenues FY2023 (consolidated) 0.72bn/EBITDA 0.3bn/Margin 41.7%.
Manchester Airports Group/UK	3	3	Three UK airports. Occasional foreign interest (with or without shareholder IFM) but has come to nothing since it sold shares in Australian airports decades ago.	Last bid was in 2018 for the aborted St Louis airport lease in USA (with IFM).	(FY2022/3) Revenues 1.1bn/EBITDA 0.43bn/Margin 39%.
Grupo Aeroportuario del Sureste (ASUR)/Mexico	16	22	Nine in Mexico, part share in one in Puerto Rico and part share in 12 in Colombia through major investments in two operators there.	Involved in the construction and operation of a new airport in the Dominican Republic.	(FY2023) Revenues 1.5bn/Net profit 0.6bn. No EBITDA figure offered.
daa Group/Ireland	3	8	Has lost Shannon Airport (now locally managed) but is active as an investor at six foreign airports in Germany, Cyprus and Saudi Arabia, as well as its extensive retail operations through the subsidiary ARI.	Still actively bidding for management and investment contracts in Saudi Arabia, Kuwait and the US Virgin Islands.	(FY2023) Revenues 1.1bn/Net profit 0.2bn. No EBITDA figure offered.
Grupo Aeroportuario del Pacifico (GAP)/Mexico	14	14	12 airports in Mexico, two in Jamaica.	Most recent bid was for the subsequently suspended concession on the Grantley Adams airport in Barbados (2019).	(FY2022) Revenues 1.4bn/EBITDA 0.8bn/Margin 57%.
Flughafen WieN/Austria	3	3	No movement since divestment of stake in Friedrichshafen Airport in 2014, other than IFM acquiring a larger stake in the organisation (2023).	No anticipated acquisitions or disposals.	(FY2022) Revenues 0.7bn/EBITDA 0.3bn/Margin 43%.
EGIS Group/France	17	17	Large worldwide, but thin, network.	Still active; acquired Paris Beauvais Airport as part of a consortium in 2024.	(FY2023) Revenues (Group) 1.9bn/EBITDA 0.22bn/Margin 11.6%.
Novaport Airport Holding/Russian Federation	16	22	Operates only within Russia.	Trying to acquire Fraport's share in the renationalised St Petersburg Pulkovo Airport.	N/A
Vantage Group/Canada 1	6	8	Operations in Canada and internationally.	Not as active as it was. Unsuccessful bid for US Virgin Islands airports concessions in 2023.	N/A
AvPorts/USA	5	7	An operator of FBO services at small regional airports and also military facilities. The commercial airports side of the business has expanded to seven airports, but in some cases is management only.	Recent deals have been PPP agreements and more of these should be expected.	N/A
Airports of Regions/Russian Federation	4	9	The only known private sector Russian airport operator to have a foreign interest (a 30-year concession on a single airport in Sri Lanka agreed in 2024). All other airports are in Russia.	In 2024 has won contracts to build and operate two new Russian airports, and more of such activity can be expected.	N/A

Data sources: ACI/ICF/Oxford Economics/CAPA - Centre for Aviation.

¹Owned by Investcorp Corsair. Changed name from Vantage Airports Group in Jun-24. Is also involved in non-ownership/operation projects at other airports.

Little correlation between group size and their finances

One of the more striking facts to emerge from these tables is that there is little correlation between the number of airports in a group, passenger numbers, and the financial situation.

The group with the highest EBITDA margin, for example, has only four airports in its group (AviAlliance: 70%). The other main German operator, which has 24 operated airports plus retail concessions at five US airports, recorded a 30% margin in the same period.

The lowest such measures were recorded by Royal Schiphol Group, which is heavily influenced by the main Amsterdam airport, where stringent capping measures are threatened, and by France's Egis Group, which is involved in multiple sectors and consulting activities, apart from airports.

Only one group reported a loss by EBITDA or net result measures - namely, Capital Airports Holding, which represents the continued impact of the COVID-19 pandemic in China.

More than half the survey group members have added assets since the report was compiled

Over a half of the groups have increased the number of their assets compared to the figures recorded in the ACI report, but it is acknowledged that different counting methods might have been employed.

What is indisputable is that the significance of these groups continues to escalate.

VINCI is the growth leader by some margin and is becoming a benchmark for group activity

As for the 'ones to watch' - VINCI continues to grow rapidly, with new numerous announcements on new acquisitions already in 2024. It has an apparent ability to transition new assets seamlessly into its portfolio and quickly move on to fresh ground, anywhere in the world apart from Southeast Asia, where it remains weak.

Addendum

Definition of an Airport Group

In this instance the compilers of the report defined an 'Airport Group' as follows:

An Airport Group is an airport company that operates or has a controlling interest in at least two of the following:

• Airport network: Two or more airports within a state operated under a single ownership, management, and control structure; it can include all airports serving the territory of this state or only some of these airports;
• Airport system: Two or more airports serving the same metropolitan area and operated under a single ownership, management, and control structure;
• Individual airport (not in an airport network or system).

To have a controlling interest, the group must either be the largest shareholder and/or the shareholder responsible for the day-to-day operation of the airport or of a terminal.

How to get the study

Copies of the publication are available from: Publications Department ACI World 800 rue du Square Victoria Suite 1810, PO Box 302 Montreal, Quebec H4Z 1G8 Canada Email: publications@aci.aero Web: www.aci.aero/publications. (ISBN: 978-1-990290-27-5).

It is intended that this topic will be on the agenda at the forthcoming Global Airport Development (GAD) World conference in Munich in Dec-2024. GAD was founded in 1993 to track the growing interest in Airport privatisations and has since been following the evolution of private sector involvement in the ownership, operation and development of airport infrastructure. It is the only conference dedicated specifically to exploring the opportunity for partnership between the public and private sectors and best practice in creating financially and environmentally sustainable airport businesses whilst delivering world-class passenger service.