ICBI is part of the Knowledge & Networking Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


Financing Airport Growth and Investment

Written on 11 November 2020 by Andrew Paulson, RBS


Figures published by the International Air Transport Association (IATA) in February 2016 confirmed what most of us in the aviation business had expected – that demand for air travel is not just growing, but expanding at its fastest rate since the financial crisis. Global air traffic rose 6.5% compared between 2014 and 2015. 


In Europe, the figure was an impressive 5% growth.


IATA also report that airport capacity increased in Europe by 3.8% over the same timeframe.


This pace of passenger growth is putting forever increasing pressure on existing airport infrastructure. In response, the airports sector is investing.


Beyond new runway construction operators are finding other ways of increasing supply to meet growing demand. Two key themes are apparent. First, existing terminal and related airfield infrastructure is being upgraded to improve the passenger experience and facilitate increased non-aeronautical revenue income. And second, investment in existing infrastructure enables more efficient use, to the benefit of passenger and airline customers.


Both trends need financing.



Predominantly, airports invest in making it easier for passengers to pass through terminals, creating an airport experience which is a destination in itself. New and improved terminal space, better car parking and surface access infrastructure, and transformed retail offerings are now the reality in hub and regional airports alike. Investing in modern and efficient security scanning equipment reduces the time passengers spend on getting through security and meets higher regulatory safety standards. Once travellers pass through security and reach the departure lounge with increased dwell time and improved terminal signage customers are able to enjoy a better travel experience, from high-end retail, to luxury spa facilities or eateries that cater for the casual and business diner alike.


Operational investment to help airlines achieve increased turnaround times requires smarter use of existing resources.  Investment in new technology and improved processes allow this to happen.


To support this growth, the debt and equity markets are essential. Happily given the strong underlying credit fundamentals, significant global liquidity is available to support investment ambitions.


In 2016 alone, USD16bn has been raised by the airport sector in the bond markets. At the time of writing (middle October) this already represents the highest level of airport DCM activity in any of the last five years, and a CAGR of 11% since 2010. APAC and the Americas are becoming increasingly relevant in the global context.


For all these reasons, it is key that global infrastructure investors continue to understand the underlying dynamics of the sector.


Here at RBS we continue to be extremely active sourcing debt investment support for the sector. We have led nine transactions in the airport sector across Europe, raising close to £3bn across the bank, bond and institutional markets.


RBS is delighted to support investment and growth across the airport sector to see airport operators thrive.




RBS is a UK-based banking and financial services company, headquartered in Edinburgh.

RBS provides a wide range of products and services to personal, commercial and large corporate and institutional customers through its two main subsidiaries, The Royal Bank of Scotland and NatWest, as well as through a number of other well-known brands including Ulster Bank and Coutts.