amit rikhy president and ceo aci conference …annual.aci-na.org/sites/default/files/rikhy ccr usa...
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ACI ConferenceMontreal 2016
Amit RikhyPresident and CEO
Global Sector Trends
• Investors more comfortable with airport asset class
• Field becoming ever-more crowded
• Governments finding political will to privatize
• Secondary market in early-adopter countries
• Wide variety of models for private participation
P3 in Airport Sector is Nothing NewP3 in airports have been ongoing for the past 30 years, but mostly outside the US
Thailand Airports1989, 1996, 2002
Melbourne1997
Sydney2002
Auckland1989
Wellington1998
Malaysia Airports1999
Cambodia Airports1995, 2001, 2006
Meilan-Hainan, 2002Macau, 1989
Cheongju2012
Tokyo-Haneda, 1990
Kansai-Osaka, 2015
Beijing2005
Schenzen, 1998
Delhi, 2008
Bangalore, 2004
Male2010
Mumbai, 2006
Hyderabad, 2005
Amman, 2007
Macedonia, 2008 Tbilisi, 2008
St. Petersburg2009
Brussels, 2004
Berlin, 2000
Dusseldorf, 1997
Skavsta1998
Hamburg, 2000
London Airports, 1987Midlands, 1994
London Luton, 1998Belfast, 1993
Budapest, 2005Vienna, 1991
Athens1995 Larnaka, 2006
Cairo, 2001
Copenhagen1992
Nantes, 2010
Turin, 2000
Rome, 1997
Naples, 1997Malta, 2002
Madinah2011
Kilamanjaro1998
South Africa1998
Anatolya, 2007
Zagreb, 2012
Montevideo1999
Sao Paulo2012
Belo Horizonte, 2013
Brasilia, 2012
Rio-Galeao, 2013
Natal, 2011
Bolivia, 1997
Isla Margarita, 1994
Dominican Republic, 2000
Nassau, 2006
San Juan, 2012
Hamilton1995
New York JFK, 1996
La Guardia, 2016
Stewart1998
Toronto1989
Branson2009
Orlando Sanford1997Mexico
(GAP, ASUR, OMA)1998, 1999, 2000
Montego Bay, 2001Honduras, 2000Liberia, 2009San Jose, 2000
Medellin, 2008
French Polynesia2010
Northeast Colombia, 2010Quito, 2002
Lima, 2000
Santiago1997,2015
Argentina1998
Bogota, 1994, 2006
Guayaquil2003
Source: ICF SH&E; internal research
Note: Sample of major global transactions; not all transactions are shown
Barranquilla, 2014
Jeddah2006
Nice 2016
Toulouse, 2014
Greek Regionals
2015
Zurich2000
Lyon 2016
Brisbane1997Perth
1997
Sochi, 2006
Moscow (Sheremetyevo)
2015 Moscow (Domodedovo)
2001
Common Misconceptions of Airport P3s
4
Public authority retains ownership,
control and oversight
Loss of Control
Focus on efficiency, street pricing, better choice, overall lower
user cost
Cost Increases / Higher Prices
Make airport more competitive / equal
access
Less Competition
Staff retained, Competitive wages,
pay-for-performance,
training and mobility
Labor Concerns
Long term investments and
thinking
Short-term Focus
Strict compliance with
environmental laws, sustainability
programs, energy efficiency
Environmental
US Airports – Historical Impediments
Changes in aviation industry are lessening these historical impediments
Low-cost financing
Airline control
Competing priorities
Misconceptions on P3s
Lack of political will / social context
Procurement processes
US Airports – Key Trends
ACI estimates US airports need $75.7bn to fund capex
Potential Congressional removal of financing
tax-exemptions
Reduction in federal grants + cap on PFCs
Strained balance sheets
Aging/commercially inadequate facilities
Users seeking faster solutions
Competition among airports
Airline consolidation and change in pax mix
P3 Airport Models in the US
Different P3 Models have been tested in the US market
P3 MODEL P3 EXAMPLE
Concession (FAA Pilot Program)
• Stewart (SWF)• San Juan (SJU)
ManagementContract (O&M)
• Atlanta Hartsfield (ATL)• Burbank Airport (BUR)• Indianapolis (RDU)
Terminal Lease orConcession
• JFK T4 (JFK)• Orlando Sanford (SFB)• LaGuardia (LGA)
How Do We Get There
• Educate authorities and staff on P3 benefits
• Allow flexibility in scopes so private sector can innovate
• Apply “Lessons Learned” from precedent global P3s
• Persistence
• Political will and social context
Public authorities transition fromOperators to Regulators
•Align stakeholders
•Clear requirements
•Defined schedule and
process
•Allocate risks properly
•Responsiveness and
flexibility
•Maintain transparency
Global Lessons Learned
THANK YOU