Sunday 19, March 2017 by Georgina Enzer

Oliver Wyman report reveals the benefits of airport privatisation

As passenger volumes continue to grow and airlines worldwide expand their fleets, airport infrastructure is fast becoming a growth bottleneck.

Privatisation has an important role to play in eliminating this barrier to growth, according to Oliver Wyman’s Leveraging the Private Sector to Improve Airport Infrastructure report. The paper examines the issues and challenges of airport privatisation, and outlines what can be done by governments and potential investors to ensure successful airport privatisations.

“The benefits of airport privatisation, if managed diligently, can be significant,” says Jeff Youssef, Partner, Oliver Wyman Middle East, who co-authored the report. “After a lull, airport privatisations became active again between 2012 and 2015, with the most substantial activity seen in South America, the Middle East and Europe. The predicted exponential growth in passenger volumes worldwide* will require improvements and expansions of aviation infrastructures for many years to come. Privatisation will be a key tool in securing funding for these projects.”

Youssef said that previous experience shows how privatisation can bring benefits not only to local economies and governments, but it can also positively affect individuals (see table below).

He added if governments consider airport privatisations as the answer to funding the improvement and expansion of airports, they need to start acting now.

“An eventual rush in the future to speed up the process could compromise the success of transactions,” he said. “If traffic levels continue to rise as projected, acting too late could mean falling behind other countries. This would create a gap that is difficult to close. Our recommendation is to start now to assess the needs of a privatisation process, and to prepare for the challenges in the years to come.”

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