Airport operator Grupo Aeroportuario del Pacifico, GAP, announced plans to invest US$60 million in the first three years of operating the Norman Manley International Airport, NMIA, according to stock market filings.
Additionally, the Mexican company will pay the Jamaican Government US$7.1 million – J$950 million at current exchange rates – over a period of one year before officially taking control of the airport based in Kingston.
The details go beyond what was outlined at the local signing ceremony last week for the Government’s award of the 30-year concession to GAP, which spoke to a commitment to upgrade the airport under a modernisation plan for more than US$100 million.
“In accordance with the concession agreement, certain works must be completed during the first 36 months from the date of taking over operations; these projects are valued at approximately US$60 million,” GAP stated in the market filing. It plans to raise the funds via bank loans and recover the investment through tariffs charged at NMIA.
GAP formally takes control of the operations and management of NMIA in October 2019 from the Airport Authority of Jamaica.
NMIA is mostly served by carriers JetBlue, Caribbean Airlines and American Airlines, respectively.
During 2017, a total of 1.6 million passengers traversed through the NMIA, which represented 27 per cent of the country’s total passenger traffic, said GAP. Sangster International Airport, the island busiest airport, which handles 73 per cent of Jamaica’s air traffic, is also controlled by GAP through MBJ Airports Limited in which it holds 74.5 per cent interest.
Once GAP takes control of NMIA, the Mexican company says it will pay a concession fee of 62 per cent “over the total amount” of aeronautical and commercial revenues, to the Jamaican authorities.
The airport has a passenger terminal of roughly 10,000 square metres and a runway that is 2.7 kilometres long, with capacity for long-range aircraft. GAP did not outline the specific expansion plans for the airport.
GAP operates 13 airports most, of which are in Mexico. Its terminals handled a total passenger throughput of 33.5 million between January to September 2018, or up 10.9 per cent year-on-year.
Currently, 70 per cent of its passenger traffic comes from the United States and Canada, 16 per cent from the Caribbean, and 14 per cent from Europe.
GAP expects NMIA to contribute approximately 3.5 per cent growth in passenger traffic for the group, increase revenue by six per cent, and grow earnings or EBITDA, by close to 1.5 per cent.
For its second quarter ending July, GAP reported EBITDA of 2.14 billion pesos (US$114 million) on total revenues of 3.4 billon pesos (US$183 million). Earnings rose 9.5 per cent year-on-year.
GAP indicated in its filings that for NMIA, Jetblue Airways is the main operator with 24 per cent of total passengers, followed by Caribbean Airlines with 23 per cent, American Airlines with 19 per cent, and Cayman Airways with six per cent. The main routes are New York, Fort Lauderdale, Miami, Toronto, Atlanta and London.