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A new model for Airport development
17th November, 2016
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Introduction
Presentation outline:
• Introduction to the Shannon Group • Airport development models • A new structure… • Focus areas
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A history of disruption…
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Airport Projects
Key Strategic Risk - new runway in Dublin
Keflavik,Iceland
Hainan,China
Vancouver,Kamloops,Canada
Denver,ColoradoKansasCity
Nassau,Bahamas,MontegoBay,
Jamaica
BostonLogan,LaGuardia,JFK,
NewYork
Copenhagen,Denmark
Cancun,Mexico
Larnaca&Paphos,Cyprus
Sydney,Australia
San ago,Chile
Chicago,Illinois
Edinburgh,Glasgow,Aberdeen,Scotland
Bristol,Newcastle,Gatwick,England
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Airport Models
DegreeofPrivateSectorInvolvement
Design-Build
DegreeofPrivateSectorRisk
PPPModels
MontegoBay,San ago,Hamilton,Chicago(Midway)
LaGuardia,Nassau*,Cyprus,DominicanRepublic
JFKT5&T7,Denver,Boston
Newcastle,Bristol
Priva za on
Concession
Design-Build-Finance-Operate-Maintain
Build-Finance
Operate&Maintain(ManagementContract)
Publicownership
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Investor Observations
Hub airport investment characteristics:
• Capital shoot-out, low IRR, low risk, regulated
• Low innovation, tendency to complacency
Regional airports under public ownership:
• Secure, inefficient, slow to respond
Regional Airport under private ownership:
• Efficient, lucrative, capped growth potential
Regional airport model ripe for overhaul
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Shannon Group
Challenge is to combine:
• Private sector: Efficiency, creativity & agility
• Public sector: Long-term vision, risk profile, hurdle rates
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Shannon Group
Long-term growth:
• Number of people living and working (catchment area)
• Number of tourists coming to region
Key ingredients of successful infrastructure deals:
• Stakeholder alignment
• Shared “skin-in-the game”
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Policy Matters
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1. Property Development
Investing to increase catchment size
• Limerick 2030
• Galway City of Culture
• Shannon Free Zone ATMU
New
office
Block
Coffee Amenity
Office Upgrade
Office Upgrade
New Office Block
New ATMU
Industrial Unit Upgrade
New Hangar
Warehouse Upgrade
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2. Technology
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3. Digital Communication
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4. Experiential Tourism
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5. Tourism Development & PPP’s
Investment in tourism infrastructure:
• Need for iconic tourist attractions with scale
• Availability of public finances
• PPP structure bypasses (“Juncker Plan”) spending restrictions
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6. National Aviation Policy
Balanced regional development:
• Direct correlation between air traffic and economic activity
• Embryonic NAP
• Dublin Airport 85% market share
• Significant 10-year traffic growth projected
• Disproportionate economic impact
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Thank-you