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Zurich Airport looks to Asia to expand its airports business

(© Keystone / Christian Beutler)

The company recently won a bid to build and run an airport near India’s capital and has its sights set on other emerging markets in Asia.

In November 2019, Zürich Flughafen AG (Zurich Airport) won a 40-year contract to build and operate the planned Noida International Airport in Jewar, located around 80km from the country’s capital, New Delhi. With an investment of CHF650 million ($670 million) expected for the first phase of construction, passenger traffic is forecast at 12 million per year when it becomes operational in four years’ time.

The investment marks a return of the Swiss company to the subcontinent and the whole of Asia. In 2001 it became part of the new era of privatisation in India with a winning bid for the Kempegowda International Airport. This month Zurich Airport was the only shortlisted bidder that met the official requirements for the construction and operation of the Nijgadh International Airport in Nepal. asked CFO Lukas Brosi to shed light on the company’s plans on the continent.

To what does the company attribute its recent success in the bids for Jewar and Nijgadh airports? 

First of all, while we received the concession to build and operate the airport in Jewar for 40 years, we only expressed our interest in the project in Nijgadh without obligations on our part, and a later commitment for the project has not yet been assessed. Overall, Zurich Airport’s business approach seems to be competitive and well received in the market.

What improvements can passengers in India and Nepal expect from the company in terms of infrastructure and services? 

Airport users in Noida, Delhi can expect a very functional and modern airport, focusing on state-of-the-art technology with a seamless travel experience.

Due to the early stage of the project we cannot yet answer this question for Nepal.

Is there a strategy to expand into South Asia and/or Asia? What are the other bids the company is participating in in Asia? 

Beside Latin America, Asia is a focus area for the international business development of Zurich Airport AG. Therefore, we are following other bids.

The company offered the highest revenue share per passenger to the government for the Jewar airport. How do you plan on making the project profitable? 

Our main focus will be on functionality and sustainability. We will provide a very attractive operations environment for airlines and service providers and efficient processes and a high dwell time [time spent shopping and dining] quality  for passengers and visitors.

The company gradually sold off all its stake in the Bengaluru international airport. In retrospect, was this a wise decision? 

Zurich Airport contributed significantly in the initial phases of the airport concession. Given the completion of the first expansion phase of the airport, we decided to sell our shares in the Bengaluru airport for attractive conditions.

What has the company learned from its experience with the Bengaluru airport project? 

Zurich Airport received a very good sense of doing business in India as well as on the regulatory environment in India. Our experience in Bengaluru supported our decision to bid for Jewar airport.

Is the company satisfied with the trend of airport privatisation in Asia or is there potential for certain countries or regions to open up the market? 

In countries where PPP’s [public-private partnerships] have already been implemented in various sectors, the privatisation processes, also for airports, have continuously evolved over the course of time. We would still see significant potential for airport privatisations in a number of countries, but we understand that the willingness for privatisation and the necessary legal framework is not yet a given.

Overseas footprint

Flughafen Zürich AG is currently involved in managing eight airports in Latin America. In addition to four airports in Brazil and two in Chile, the Zurich airport operator is engaged in the management and operations of the airports in Bogotá and Curaçao. Besides India, countries such as Indonesia and the Philippines are among the future focus markets.

Full story here
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