Think tank warns vs privatizing Naia

Aviation think tank Centre for Asia Pacific Aviation advised the Philippine government to abandon a plan to privatize the Ninoy Aquino International Airport as this may result in higher airport fees.

Capa said in a report that while the privatization of the country’s main gateway could be considered, the government should be careful and only proceed with the public private partnership scheme if the new owners would make the appropriate investments without significantly raising the costs for airlines or passengers.

Capa said the PPP proposal was somewhat controversial and had not yet secured airline support because the concession was only for 15 to 20 years–a relatively short length for an airport privatization project. 

“However, a longer concession at Naia could impact investor appetite in the new airport project,” Capa said.

“The Philippines may ultimately be best to retain ownership in Naia and invest in upgrades under the current structure, while proceeding with a PPP scheme for the new airport,” it said.

San Miguel Corp. earlier proposed a $10-billion airport in Bulacan province, while All-Asia Resources and Reclamation Corp., a consortium led by tycoon Henry Sy and the Tieng family, plans to build an international gateway in Sangley, Cavite to replace Naia.

Capa said a new airport for Manila was required, but the reality was it could take a decade before the new airport could open. 

Capa said in the meantim the government had an opportunity to improve service levels further and increase capacity.  Capa said runaway capacity might increase through a transition into a single runway operation.

“Closing Naia’s smaller intersecting runway would improve air traffic management, similarly to the change Mumbai adopted in 2013,” Capa said.

There are currently 5,100 scheduled commercial weekly flights per week at Naia, according to OAG data. This equates to an average of 365 takeoffs and 365 landings per week. Movements are now capped at 40 per hour.

Naia accounts for nearly 90 percent of all domestic passengers in the Philippines and more than 80 percent of all international passengers.

The airport handled 39.5 million passengers in 2016, including 20.6 million domestic and 18.9 million international passengers.

Topics: Aviation think tank Centre for Asia Pacific Aviation , Ninoy Aquino International Airport , privatizing Naia , airport fees
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