Update on the Privatization of the Manilla International Airport
In a significant development, the Philippine government has recently concluded a bid to upgrade and privatize the Manila International Airport, the country’s most prominent international gateway. Because of this privatization, airport fees and the CAAP’s air navigation fees are expected to rise.
For over thirty years, the Philippine government unsuccessfully attempted to privatize the Manilla Ninoy Aquino International Airport (NAIA). However, in February, the government successfully awarded the privatization to a consortium composed of one of the Philippines’ largest conglomerates and its partners, including Incheon International Airport Corporation of South Korea.
As part of the deal, the investors must invest at least 141 billion Philippine pesos to upgrade NAIA’s facilities. This long-awaited privatization will likely lead to increased airport and air navigation fees, further raising the cost of air travel for consumers and the airline industry.
Although the privatization has been decades in the making, it may have come at an inopportune time for consumers and the industry, as fees from the Civil Aviation Authority of the Philippines (CAAP) were recently increased (see the L2b livestream on L2b Aviation’s YouTube page for a discussion on the fee increases).
The investment for upgrades will cover all airport facilities, including the runway, terminal and associated facilities. While modernizing NAIA will enhance the overall passenger experience, the costs will ultimately be passed on to passengers.