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Asia Pacific Airport Financing Market - Investment Analysis and Growth Opportunities
Frost & Sullivan, February 2007
This Frost & Sullivan research service titled Asia Pacific Airport Financing: Investment Analysis and Growth Opportunities provides the three main investment themes, industry economics, value chain analysis, growth monitor, private equity, mergers and acquisitions and venture capital activity. In this research service, expert analysts thoroughly examine the markets for new airports and expansion/modification.
Governments in the Asia Pacific Region looking to Fast Track Privatization
The Asia Pacific airport financing market is moving to a growth phase with regional governments realizing the increasing need to both build world class airports and upgrade the existing ones to international standards. This is being necessitated by the boom in the passenger and cargo traffic in most of the countries in the Asia Pacific region, as well as the constantly changing airport security regulations that demand upgraded security systems in line with international standards. In a significant move to cash in on the booming aviation industry, governments in the region are looking to fast track privatization, in a bid to meet the high amounts of financing required to fund new airport constructions and upgrade existing facilities.
Acknowledging the vast opportunities in the Asia Pacific airport financing market, especially considering that only a handful of airports are privatized, most foreign investors are at present looking to enter the market. High capital expenditure has not deterred venture capital investors such as Siemens Venture Capital to invest in the Bangalore International Airport Limited (BIAL) Greenfield project, and many more have already begun participating in the bidding process for airports in India, China, Indonesia, South Korea, Australia, and New Zealand. "In terms of investments in commercial activities at airports, there is still room for substantial gains as these activities generate the maximum revenues and are also less regulated by the airport authorities," notes the analyst of this research service. "The model of British Airport Authority (BAA), focusing on non aeronautical revenues, is likely to be followed by most of the airport and private investors."
Immense Market Potential in India and China
Among individual countries, China along with India holds considerable potential for investors. One hundred and eight new airports are to be constructed in China between 2006 and 2010, and the decision of the Chinese Government to stop providing subsidies to domestic airports by 2005 and to allow private investors to build, buy, or manage airports makes for considerable potential. The total cost expected to be incurred for the construction of new airports alone is $13.3 billion (110 billion Yuan). In India, the success of low cost carriers (LCCs) has changed the countries aviation profile as well as the outlook of both the government and the Airports Authority of India (AAI) toward airports. Eight more airports are likely to be built in the country by 2010, in addition to the 94 airports that exist at present. Existing airports by themselves promise opportunities as none of these airports meet the latest international quality standards.
Overall, the Asia Pacific airport financing market is positioned to grow and sustain its profitability for the next five years, largely due to the aviation boom arising from the growth of LCCs and the recent initiatives of various regional governments to increase private participation. "Recent analysis shows that by 2015, between $150 billion and $200 billion is likely to be invested in airports globally, out of which 40 to 45 percent would be invested in airports across the Asia Pacific region," says the analyst. "The above figures are in line with the compound annual growth rate (CAGR) of 4.0 percent for the air travel industry in the long term, with some 4.6 billion people predicted to travel by air by 2020."
-1. Executive Summary
--1. Executive Summary
---1. Executive Summary
-2. Introduction and Methodology
-3. Industry Fundamentals and Growth Opportunities
--1. Market Overview and Investment Analysis
---2. Market Overview
---3. Investment Themes
---4. Investment Themes (Contd...)
--2. Geographical Analysis
---5. New Zealand
---9. South Korea
--3. Segment Analysis
---1. Segment Analysis
--4. Industry Fundamentals and Growth Opportunities
---1. Industry Economics
---2. Value Chain Analysis
---3. Frost & Sullivan Sector Scorecard
---4. Frost & Sullivan Growth Monitor
-4. Financial Benchmarking Analysis
--1. Industry Profitability
---1. Year-Over-Year Revenue Growth
---2. Operating Profit Margin
---3. Long-Term Debt to Equity Ratio
---4. Airlines Traffic Trend Analysis
---5. Aeronautical Revenue Vs Non Aeronautical Revenues
---1. Historical and Current Mergers and Acquisitions (M&A) Valuation
---2. Private Equity (PE)/Venture Capital (VC) Activity
---3. 2006 Twelve Months Stock Performance
List of Figures
Market share versus future trend of the participants in the Asia Pacific Airport Financing Market for the period 2006-2010.
Forecast of the total number of airport upgrade/expansion programs underway in Asia Pacific for the period 2006-2010.
Forecast of the total number of airports to be built in Asia Pacific for the period 2006-2010.
Change in passenger and airfreight traffic in India for fiscal years 2003-2004 and 2004-2005.
Change in passenger and airfreight traffic in China for the fiscal years 2003-2004 and 2004-2005.
Industry opportunity sector scorecard in the Asia Pacific airport financing market in 2006.
Frost & Sullivan Growth Monitor for the Asia Pacific airport financing market in 2005.
List of mergers and acquisitions in the Asia Pacific airport financing market for the period 2000-2007.
List of Charts
Percent of growth in annual air traffic by geographic region in the world for the year 2004.
Market share of the participants in the Asia Pacific Airport Financing Market for the year 2005.
Frost & Sullivan investment theme framework for the Asia Pacific airport financing market in 2007.
Annual passenger, airfreight and air traffic in Indonesia for the period 2001 to 2005.
Annual passenger, airfreight and air traffic in Singapore for the period 2001 to 2005.
Domestic and international passenger traffic for South Korea in the Asia Pacific airport financing market for the period 1997-2004.
Industry economics of the Asia Pacific airport financing market in 2006.
Value chain analysis of the Asia Pacific airport financing market in 2006.
Year-over-year revenue growth of airports in the Asia Pacific airport financing market for the period 2001-02 to 2005-06.
Operating profit margin of airports in the Asia Pacific airport financing market for the period 2001-02 to 2005-06.
Long-term debt to equity ratio of airports in the Asia Pacific airport financing market for the period 2001-02 to 2005-06.
Percent year-over-year growth in ASM of the Asia Pacific airlines for the period July 2004 to May 2006.
Percent year-over-year growth in the RPM of the Asia Pacific airlines for the period July 2004 to May 2006.
Percent year-over-year growth in the PLF of the Asia Pacific airlines for the period July 2004 to May 2006.
Aeronautical revenues versus the non-aeronautical revenues in the Asia Pacific airport financing market for the period 1994 to 2006.
Percent of assets by nature of investments in the Australian Infrastructure Fund, (Asia Pacific) 2005.
2006 twelve month stock performance of the companies in the Asia Pacific airport financing market from January 2006 to December 2006.
2006 twelve month stock performance of the airports in the Asia Pacific airport financing market from January 2006 to December 2006.