Fund to support push into global market

Changi Airport control tower.
Changi Airport control tower.PHOTO: ST FILE

Having decided that its future growth could lie beyond Singapore's borders, Changi Airport is setting up a fund of up to $1 billion to support its ambitions and is seeking investors.

An American finance firm has been roped in to look for partners. The funds will be used to invest in airport projects globally, said Changi Airport Group chairman Liew Mun Leong.

Changi Airport will provide about 20 per cent to 30 per cent of the total amount required and manage the fund, which is likely to be launched some time this year, he told The Straits Times.

Citing tremendous opportunities in China and other growing aviation markets, he said financial constraints have so far kept Changi from moving more aggressively in the global airport market.

 

Driven by its foreign investment arm Changi Airports International, Changi's foreign forays have been limited mainly to helping airports plan, develop and operate existing and new facilities

A breakthrough came in May when Changi celebrated the opening of Kazi Nazrul Islam Airport in West Bengal, India - the first overseas airport it partly owns through a 36 per cent stake in Bengal Aerotropolis Projects Limited (BAPL).

Changi's ambitions are similar to that of PSA International, which corporatised in 1997 and now operates about 40 container terminals, many of which it partly owns, in 16 countries.

With the airport's countless accolades and sterling reputation, Changi is well placed to cash in on the growth in the airport development sector, aviation experts said.

Globally, the value of airport expansion and development projects is expected to hit an estimated US$520 billion (S$701 billion) this year, said Frost & Sullivan's aviation analyst Subhranshu Sekhar Das. China and India, for example, with populations at least four times larger than that of the US, have only about 400 airports each while the US has more than 5,000.

 

While there are other players in the field like Malaysia Airports, Germany's Fraport, Schiphol in the Netherlands and Turkey's TAV, Mr Liew is confident Changi will outshine its rivals.

BAPL managing director Partha Ghosh said ahead of the opening of the West Bengal airport that the Indian airport was keen to tap Changi's valuable experience across many functional areas such as masterplanning and terminal design, capacity improvement, traffic development, airport operations and management, and commercial development.

Mr Liew said: "Our reputation is the best... Every other day we have people knocking on our doors, which is why I'm so bullish."

"From a business perspective, investing in airports is going to be the next big thing... The potential in China alone is fantastic."

Karamjit Kaur

A version of this article appeared in the print edition of The Straits Times on July 01, 2015, with the headline 'Fund to support push into global market'. Print Edition | Subscribe