The airport transaction market in 2015 saw a continuation of the strong activity seen in 2014, albeit at a lower overall level activity and with some deals taking longer to come to market than in the previous year. The attractiveness of airports to industry investors and infrastructure specialists remains strong, with traffic growing strongly worldwide. The outlook for more activity in the airport sector remains positive with the industry’s growing need for capital, pressures on government finances, and infrastructure investors seeking higher yield investments.
The Gulf carriers have connected 10 more US cities to the Middle East in the last decade, flying an additional 22 city-pairs and increasing US airport income by over $50m per annum, so why all the fuss? Did they spot a genuine opportunity that everyone else missed, one so large it justifies ordering over 600 new large jets – or is there something else behind the rise of the Middle East Big 3?
There is a lot of hot air being expanded about the big three Middle East carriers and their alleged access to subsidies. But these airlines enjoy another key advantage – their hubs are located at the geographical intersection of the major world economies of Europe, Asia and Africa. The US, despite having a strong local market, will find it difficult to access these economies to the same extent.
Airport route development in Europe has evolved alongside changes to the structure of the airline industry. Airlines are looking for good value access to sustainable and profitable markets.
Consultancy and Route Development Team, Aviation Economics