Established in 1974 under the “Airports Authority Act” as an independent statutory body, with initial responsibility (ownership and management) for the nation’s two international airports; namely Norman Manley International Airport and Sangster International Airport.
In 1990, Airports Authority of Jamaica (AAJ) took on the additional responsibility for the island’s four domestic aerodromes, namely; Tinson Pen in Kingston, Ken Jones in Portland, and Boscobel in St Mary and Negril in Westmoreland. Since its inception AAJ has worked diligently to fulfil its principal mandate of developing and operating a safe and secure airport system for Jamaica. For several years now AAJ has been adjusting structurally, in keeping with the Government’s airport privatization policy.
In April 2003, AAJ divested the operational responsibility for (but not the ownership of), the Sangster International Airport (SIA) to MBJ Airports Limited, a private sector operator, under a 30-year Concession Agreement with the AAJ. In October 2003, NMIA Airports Limited, having been incorporated as a wholly-owned subsidiary of AAJ, commenced operation of the Norman Manley International Airport (NMIA), also under a 30-year Concession Agreement with the AAJ. Plans are actively underway for this airport to be privatized.
In fiscal year 2010/2011 the Boscobel Aerodrome was upgraded to an international airport with border control services and renamed the Ian Fleming International Airport (IFIA), thereby positioning it as the country’s international general aviation airport.
Airports Authority of Jamaica provides oversight and contract administration for the concession agreement which is in place with each Airport Operator; MBJ Airports Limited and NMIA Airports Limited. As a part of its responsibility, AAJ continues with the operation and management of IFIA and the three remaining domestic aerodromes.
In addition, AAJ undertakes the long-term planning and development of Jamaica’s airport system and continues to be at the forefront of Jamaica’s air transportation policy development. The broad airport development policies pursued and the organizational changes implemented over the years are aimed at expediting the expansion and modernization of the nation’s principal international gateways. The two major international airports, NMIA and SIA, are highly capital intensive businesses and are organized and managed as self-financing commercial enterprises. Both airports are implementing large capital development programmes that are being financed by internally generated funds, shareholder’s loans and equity contributions, as well as commercial debt.
Government’s airport privatization policy
The Government of Jamaica has taken the policy decision to privatize the international airports, commencing with Sangster International Airport. This is in keeping with international trends and the need to attract private capital to finance the required levels of expansion and development at the international airports, to cope with the projected growth in aircraft and passenger traffic. The privatization of the Sangster International Airport was completed on April 12, 2003 when the private operator, MBJ Airports Limited, took over the day-to-day operation of the airport from AAJ. In addition, the AAJ has positioned NMIA to operate as an autonomous commercial entity and to prepare for its eventual privatization. Consequently, plans for the privatization of NMIA are far advanced and a preferred bidder, Grupo Aeroportuario del Pacifico S.A.B. de C.V. (“GAP”), has been chosen. A Commercial Contract has been signed between the AAJ and GAP for a 25 plus 5 year concession period, with Financial Closure and the handover of operations to GAP by Oct 2019.
Concession Agreement
Under the Agreement the approved Airport Operator is responsible for the management of the day-to-day operations of the respective Airport in keeping with specific performance criteria and prescribed international standards. Regular performance reviews and other contract administration oversight functions are conducted by AAJ, as specified under the concession agreement. In addition, an Airport Forum is held biannually to provide stakeholders with the opportunity to provide progress reports and to address pertinent issues.
Under the agreement with the international consortium, MBJ Airports Limited, AAJ retains ownership of the non-movable assets of the Airport, owned prior to privatization, and will manage the concession agreement to ensure that the private operator performs its contractual obligations. The private operator pays a concession fee to AAJ and at the end of the contract will transfer the Airport’s assets acquired during the period of the concession to AAJ. Similar performance reviews and concession fee payment provisions are to be in place for the new private operator of NMIA.
