A new model for Airport development

17th November, 2016

Introduction

Presentation outline:

• Introduction to the Shannon Group • Airport development models • A new structure… • Focus areas

A history of disruption…

Airport Projects

Key Strategic Risk - new runway in Dublin

Keflavik,Iceland

Hainan,China

Vancouver,Kamloops,Canada

Denver,ColoradoKansasCity

Nassau,Bahamas,MontegoBay,

Jamaica

BostonLogan,LaGuardia,JFK,

NewYork

Copenhagen,Denmark

Cancun,Mexico

Larnaca&Paphos,Cyprus

Sydney,Australia

San ago,Chile

Chicago,Illinois

Edinburgh,Glasgow,Aberdeen,Scotland

Bristol,Newcastle,Gatwick,England

Airport Models

DegreeofPrivateSectorInvolvement

Design-Build

DegreeofPrivateSectorRisk

PPPModels

MontegoBay,San ago,Hamilton,Chicago(Midway)

LaGuardia,Nassau*,Cyprus,DominicanRepublic

JFKT5&T7,Denver,Boston

Newcastle,Bristol

Priva za on

Concession

Design-Build-Finance-Operate-Maintain

Build-Finance

Operate&Maintain(ManagementContract)

Publicownership

Investor Observations

Hub airport investment characteristics:

• Capital shoot-out, low IRR, low risk, regulated

• Low innovation, tendency to complacency

Regional airports under public ownership:

• Secure, inefficient, slow to respond

Regional Airport under private ownership:

• Efficient, lucrative, capped growth potential

Regional airport model ripe for overhaul

Shannon Group

Challenge is to combine:

• Private sector: Efficiency, creativity & agility

• Public sector: Long-term vision, risk profile, hurdle rates

Shannon Group

Long-term growth:

• Number of people living and working (catchment area)

• Number of tourists coming to region

Key ingredients of successful infrastructure deals:

• Stakeholder alignment

• Shared “skin-in-the game”

Policy Matters

1. Property Development

Investing to increase catchment size

• Limerick 2030

• Galway City of Culture

• Shannon Free Zone ATMU

New

office

Block

Coffee Amenity

Office Upgrade

Office Upgrade

New Office Block

New ATMU

Industrial Unit Upgrade

New Hangar

Warehouse Upgrade

2. Technology

3. Digital Communication

4. Experiential Tourism

5. Tourism Development & PPP’s

Investment in tourism infrastructure:

• Need for iconic tourist attractions with scale

• Availability of public finances

• PPP structure bypasses (“Juncker Plan”) spending restrictions

6. National Aviation Policy

Balanced regional development:

• Direct correlation between air traffic and economic activity

• Embryonic NAP

• Dublin Airport 85% market share

• Significant 10-year traffic growth projected

• Disproportionate economic impact

Thank-you