Aviation think tank CAPA Centre for Aviation said it would be best if the Philippines retains ownership of the Ninoy Aquino International Airport (NAIA) and invest in upgrading it while allowing the private sector to build a new one under the public-private partnership (PPP).
CAPA in a report said the government should look at the possibility of expanding the airport concession to 25 years “to provide the right mix of benefits for all stakeholders.”
“A longer concession at NAIA could impact investor appetites in the new airport project,” the think tank said.
CAPA proposes a single runway system should be adopted to yield better efficiency while the government prepares for the new airport. It also urges the expansion of all four terminals expanded.
While privatization can be considered, CAPA warned the Philippine government to be careful and “only proceed with the PPP scheme if it can be ensured that the new owners will make the appropriate investments without significantly raising the costs for airlines or passengers.”
CAPA said Manila will eventually require a new airport with the current four-terminal NAIA already space- constrained but that there are still “opportunities to increase capacity of the existing four terminals while significantly improving customer experience.”
“Runway capacity may increase through a transition to a single runway operation. Closing NAIA’s smaller intersecting runway would improve air traffic management, similarly to the change Mumbai Airport adopted in 2013,” it said.
CAPA noted that vis-a-vis the NAIA management’s decision to cut slots in 2012 to reduce congestion, the proposed changes “has the opportunity to increase slots as general aviation operations move out and air traffic management improves.”
CAPA noted that NAIA is the fifth largest airport in Southeast Asia, the largest in the Philippines, and accounts for 90 percent of all domestic passengers in the Philippines and more than 80 percent of all international passengers.
It handled 39.5 million passengers in 2016, 20.6 million domestic and 18.9 million international passengers, posting a growth of 8 percent from a year ago — domestic passenger growth was at 6 percent while international passenger growth was at 10 percent.
But it said passenger growth r has been limited in the past several years due to infrastructure constraint, with the national aviation market growth faster than NAIA’s and secondary airports taking the slack in an overcrowded Manila.
“Annual aircraft movements at NAIA were flat from 2012 through 2015 and increased slightly in 2016 as some off peak international flights were added. Over the past few years, airlines serving Manila have relied mainly on upgauging existing flights to increase capacity and traffic,” CAPA said.
“The inability to add flights has hampered growth. NAIA would have experienced much faster passenger growth over the past few years, given the rapid growth in the Philippine economy, if airlines had been able to add more flight. NAIA is also not capable of accommodating A3802, which some of the Gulf airlines would like to use in Manila given the current level of demand and the slot constraints,” it added.
CAPA noted that NAIA is still providing passengers with a service level far below that of its Asian peers.
“A new airport for Manila is required, but the reality is it could take a decade before the new airport is opened. In the meantime, the government has an opportunity to improve service levels further and increase capacity,” CAPA said.
06 February 2017