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Volume 14,Issue 3 Autumn 2012

Changi, Shenzhen groups form joint venture


Singapore-based airport operator Changi Airports International and China’s Shenzhen Airport Group (SAC) have entered into a strategic partnership to develop a portfolio of regional airports across China. This is the first joint venture between SAC and a foreign company. The joint venture adds to the airport deals which CAI is currently undertaking on its own in the country. CAI will hold a 49-percent stake in the joint venture and Shenzhen the remaining 51 percent. Through the joint venture, both parties will jointly identify and invest in medium-size Chinese airports with strong growth potential and participate in the management of the airport operations in said airports with the view of improving service quality, efficiency and returns. The partnership will build on the existing strengths of both parties, in particular world class airport management and commercial skills from the operation of both Singapore Changi Airport and Shenzhen International Airport. Both parties have already established a credible track record of developing and managing airport investments in China. CAI has a 29-percent stake in Nanjing Lukou International Airport, the first private equity airport investment in China by a foreign investor. CAI’s strong portfolio of airport consultancy projects in China includes Chengdu and Qingdao airports. The Shenzhen Airport Group has an investment 21 percent in Chengdu Airport. With total passenger volume of 18 million, Shenzhen Airport is the fourth largest airport in China in terms of passenger volume. Latest year-on-year passenger volume growth was 13 percent and 20 percent in cargo. Speaking at the signing ceremony in Shenzhen, Chow Kok Fong, chief executive officer of Changi Airports International, says the joint venture is an important milestone for both companies. “It leverages on some quite incomparable characteristics of both partners – the depth of resources and breadth of expertise and know-how which both parties could jointly marshall – to participate in the development of Chinese airports. Total volume of passenger traffic for the country has already reached 320 million in 2006 and is expected to grow between 15–20 percent per annum over the next decade. I like to think the joint venture demonstrates yet again our commitment to the future of China, and, in particular, its aviation sector.”

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