Global airport groups is a topic of growing importance and increasing interest for the wider aviation community and as such a dedicated pre-conference workshop will take place at the upcoming ACI LAC/World Annual General Assembly, Conference and Exhibition in Cancún, Mexico, on 22 November 2021. The workshop will present the preliminary findings of the first systematic and structured attempt to investigate the topic of airport groups from a value creation perspective, set for release as a Study in early 2022.
Beginnings, objective, and framework
The project began at the 7th Beijing Global Friend Airports CEO Forum in November 2019, hosted by Beijing Capital International Airport, when multi-airport operators and airport groups widely supported a new study that would provide a comprehensive look into the value creation of airport groups. The objective agreed was to research, document, and analyze the possible benefits and value that airport groups can generate, and the study was made possible with the financial contribution from Capital Airport Holding and support of multiple airport groups.
ICF and Oxford Economics were selected to assist ACI World in pursuing the research. The study aimed at investigating benefits of the airport group model, establishing an evidence-based position on the value creation of airport groups in seven subject areas that are central to the aviation industry as whole, as well in achieving the United Nation’s Sustainable Development Goals (UN SDGs). The study also aimed to establish both the behaviours and attributes of airport groups that generate value (e.g., scale, promulgation of best practices, knowledge sharing, ambitious target setting, etc.) and the evidence basis that demonstrates this in real world outcomes (e.g., strong performance in the identified key performance indicators across subject areas).
The analytical framework was guided by a series of hypotheses which intended to test several presumptions with respect to environmental and social sustainability, economics and finance, operations and efficiency, passenger experience, safety, and innovation.
Methodological highlights
Definition
Two interrelated questions were of prime importance from the methodological perspective: the definition of an airport group and identification of airport groups based on a set of clear criteria. Even though there was a legacy definition of airport groups encapsulated in the ICAO’s Airport Economics Manual (Doc 9562)—”two or more airports operated at the international or multinational level under a single ownership and control structure”—it was not considered fully reflective of the actual airport industry landscape. Therefore, ACI chose a slightly broader definition of “airport groups” for the purpose of the study, that encompasses all airport operators that have consciously and intentionally expanded the number of airports within their sphere of influence, be it domestically or internationally. A further complexity lied in the fact that not all airports within an airport group are managed on the same basis nor the same control structure and shareholding interest.
To capture these aspects, the following definition of airport groups was retained:
Airport group: An airport group is an airport company that operates or has a controlling interest in at least two of the following:
- Airport network
- Airport system
- Individual airport (not in an airport network or system)
To have a controlling interest, the group must either be the largest shareholder and/or the shareholder responsible for the day-to-day operation of the airport or of a terminal.
Identifying airport groups
To identify existing airport groups aligning with the established definition, it was essential to understand the control structure and shareholding interest for every airport.
Starting with the list of 576 organizations identified by CAPA – Centre for Aviation that have an ownership stake or operate at least one airport, the following criteria were applied to identify airport groups that satisfy the definition in the foregoing section:
- Airport groups must operate or own more than one airport (e.g., Narita International Airport Corporation only operates one airport, and is therefore not an airport group)
- Airport groups must operate at least one airport (e.g., Utilico Emerging Markets Ltd does is not involved in the day-to-day management of an airport or terminal, and is therefore not an airport group)
- Airport groups must not operate a single airport network (e.g., Finavia operates an airport network, and is therefore not a group)
- Airport groups must not operate a single airport system (e.g., Port Authority of New York and New Jersey operates an airport system, and is therefore not a group)
Groups for whom the combined total passenger volume was below 10 million in 2019 were also excluded from the sample. Based on the definition of airport groups and the traffic volume criteria, 27 airport groups comprising 425 airports were identified globally, represented in Table 1:
Sources of data
Even though a substantial amount of information on airport groups was available in secondary data sources—annual reports, financial statements, ESG reports, existing ACI data holdings and various external off-the-shelf datasets—a tailor-made survey to airport groups was set up to thoroughly investigate the value creation mechanisms across various topical areas.
The questionnaire supported analyses into how airport groups generate benefits in the areas of sustainability, society, operations and efficiency, passenger experience, safety, and innovation, and also provided inputs for the economic impact assessment that quantified groups’ direct, indirect, induced, and catalytic economic impact.
Data-driven evidence and findings
By and large, preliminary results of the study supported the hypotheses suggesting measurable value creation propagated by airport groups. First, although many airport groups testified to the existence of the economies of scale and scope, there were many findings revealing value creation mechanisms beyond this, including:
- Shared resources and service centres at the group level
- Acting as a facilitator for exchanging knowledge
- Goals and targets
- Raise and enforce standards
- Benchmarking
Looking ahead: A much-anticipated comprehensive report
ACI’s upcoming workshop in Cancún will present the preliminary findings of the novel study and your participation will provide valuable feedback as ACI World works to refine and finalize its research and analysis and draw policy conclusions relevant to the needs of both airport groups, and of consumers and the travelling public. The aviation community is invited to read the full report once released by ACI World in early 2022.
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