Airport Privatizations

Abstract

As a result of many recently announced privatization, increased activity is expected to finance airport expansions through to the world. The U.S. capital markets will be a natural source for this financing because of increasing fiscal constraints faced by local governments combined with long-termed nature of required debt for these capital-intensive assets. In the view of Duff & Phelps Credit Rating Company, key factors that can determine access to private sector funding for any airport privatization may include concession terms, the quality of the airport operator, the economic, legal and regulatory environment, equitable distribution of all risks. Those risks include offtake, or commercial risk; construction risk; operator risk; and currency risk.