Changi eyes Abu Dhabi airport stake

Singapore: Singapore's Changi Airports International is keen on a stake in Abu Dhabi's international airport and is also eyeing two smaller terminals in China for takeover, its chief said yesterday.

Changi Airports clinched an 18-month contract to operate the Abu Dhabi government-owned airport in December, and is angling to turn this into equity as authorities have said the airport was likely to be privatised by next year.

"We've made it known to the Abu Dhabi authorities that we would like to be considered. They will hopefully take into account our relationship for the past year," chief executive Chow Kok Fong said.

Chow said financial terms of such a stake are not yet available, but added: "There's no reason why we won't want to take up as much as possible."

Globally, airports such as Germany's Fraport, Amsterdam's Schiphol Group and South Korea's Incheon International are also seeking stakes in airports in emerging markets like India, the Middle East and China to capture their rapid growth.

Changi Airports, the overseas investment arm of the Civil Aviation Authority of Singapore, which owns and operates the city-state's Changi Airport, paid $138 million in January for 29 per cent of China's Nanjing Lukou International Airport, and has management contracts with airports in Russia and India.

In July, it entered a joint venture with China's Shenzhen Airport Group to invest in and manage up to 50 airports in China.

Two deals

Chow said the China JV currently has two likely deals on the table, but declined to give a timeline as to when these will be concluded.

He said the company does not have funding constraints, adding: "Changi Airport typically makes about $400 million every year, so we have a very strong cashflow."

And while Singapore state investment firm Temasek Holdings has run increasingly into road blocks overseas, amidst rising wariness of sovereign wealth funds and their motives, Chow said this was "not an issue" for Changi Airports.

"We've not encountered any difficulties along those lines yet. We are perceived as an operator-centric kind of player, and the industry knows we do not get into a position just for a financial stake," Chow said.

In August, the Singapore government announced plans to "corporatise" CAAS, currently a state agency, meaning it will operate like a business, but will stop short of being privatised as the government wants to retain full control for strategic reasons.