Airport Finance & Privatisation Review 2014/15 Volume 2

The CAPA 2014 Airport Privatisation Review was published in Jan-2015, followed by a much bigger management report on FY2014 in Mar-2015. Despite both these reports having been published in the recent past it is pertinent to revisit the subject now. Both of them referred to a continuing paucity of deals but there has since been a discernible uptick in both actual and putative ones. While money is still tight it is perhaps not as tight as it was, infrastructure bonds are popular and with interest rates low just about any investment of this kind is likely to provide a better return, albeit with greater risk. With traffic figures rising and airport EBITDAs rising, along with the multiples when they are sold, air transport infrastructure is coming back into fashion. What is more, the activity is across the board - in PPPs, BOTs, trade sales, even a couple of IPOs.

But some caution needs to be exercised. As ever, national and regional economies and exogenous world events – or Black Swans if you prefer - will dictate airport values and their investment potential every bit as much – or more so – than the start up of a handful of new routes. All but one of the BRICs for example (i.e. India) have lost their patina recently and in the case of Russia the stand-off with the west over Ukraine means not only that aviation growth will be severely diminished there by economic sanctions but also that a military confrontation could take place. Aeroflot just cancelled its order for 22 B787s and is also reviewing its order for 22 A350s

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