From Singapore to South Korea, airport ambitions face headwinds

Asia is home to the largest concentration of airport development projects by number and value, yet lags behind the rest of the world in reviving travel in the wake of COVID-19, recent reports highlight. These conflicting crosswinds could mean a bumpy ride for the Asian sector in the coming years, with inflation, supply disruptions and skilled labor lost to the pandemic adding further complications. A look around the region reveals a flurry of airport construction plans. Singapore is moving ahead with a fifth passenger terminal at its main Changi Airport to the tune of $10b, after the pandemic delayed plans for expanding capacity. In terms of value, South Korea has the biggest airport infrastructure push lined up, worth as much as $46b, according to estimates compiled by Fitch Solutions Country Risk and Industry Research earlier this year. One major project on the horizon is the Gadeok Island Airport in Busan, expected to be built offshore on a floating structure in about a decade. In Vietnam, the state Airports Corporation of Vietnam, which manages civilian terminals, has plans through 2025 to upgrade and expand 23 facilities, designed to accommodate a total of 173m passengers per year. In the same time frame, India plans to increase its airports from more than 130 at present to around 220, while the Philippines is counting on its upcoming Sangley Point International Airport project, located south of Manila, to handle over 100 million passengers annually once completed. Fitch said in May that Asia has over 200 airport projects overall, involving a combined $231b in investment -- both the most of any region. At the same time, however, Fitch noted that the future is foggy due to the "residual impacts" of COVID-19, including reduced revenues in previous years as well as uncertain future airport demand. It said this is likely to weigh "on project activity in the airport segment particularly over the short term."<br/>