AAJ Wants Risk And Growth Study On Kingston Airport

Restarting the Norman Manley International Airport, NMIA, after a major accident, or the threat of rival airports pinching away passengers are concerns that the Airports Authority of Jamaica, AAJ, wants quantified and studied prior to divestment.

The authority is looking for a consultant to outline the growth prospects and the risk associated with the airport, and from there, devising plans of action for NMIA’s recovery from a variety of risk scenarios.

The Business Continuity Management Study, expected to be conducted between January and July 2019, forms part of the privatisation plan for the airport. Until then, the AAJ remains its operator through NMIA Airports Limited.

“The continuity report has a number of uses for us,” Alfred McDonald, AAJ director of commercial planning and development, told the Financial Gleaner in an interview on Monday.

“It will assess the risk of the airport and also access its growth prospects. At the AAJ/NMIA, we want to ensure that risk is mitigated, whether the airport is divested or not,” he said.

The report will also serve as a guide to the private operator that wins the concession to operate the airport, and it will become a tool for the AAJ as well in monitoring the performance of the concessionaire, McDonald noted. The concessionaire is expected to own and operate NMIA for about 30 years.

Eight groups are vying for the airport on which bids are due at the end of June.

On Monday, McDonald indicated that current data on revenues and other particulars on NMIA would remain undisclosed until presented to Parliament.

Data promised on passenger arrivals and departures for 2017 was not forthcoming, but passenger movements in 2016 totalled 1.59 million, according to information on NMIA’s website.

The current arrangement with NMIA Airports Limited is also structured as a 30-year concession agreement signed in 2003. The AAJ has invested some US$136 million in its 20-year Master Plan, to upgrade the existing infrastructure, according to the expression of interest on the study.

The deliverables of the continuity study include a comprehensive review of air services and to provide recommendations that will support the development of the NMIA in passenger and cargo services.

In relation to the continuity study, the authority wants the report to determine NMIA’s competitiveness and potential to grow air services; recommend new routes, including target markets and air carriers; determine air cargo potential and possibilities for NMIA, including target markets, products and air carriers; determine the market potential for NMIA as a hub for passenger and cargo traffic; and recommend market and air carriers and provide preliminary recommendation on how NMIA can attract transit flights for technical stops.

The consultant must also identify ways to create a risk register ranking in order of most severe to least severe, methods for NMIA to create partnerships to protect its interest, and devise procedures aimed at managing “all critical services” in emergency events.

Costs associated with the divestment of NMIA are backed by a loan to the AAJ from the European Investment Bank, and a “subsidy” for technical assistance and studies related to the planned privatisation of the airport, according to the invitation for bids.