Gokongwei’s bet big on airport expansion

The Gokongwei Group has decided to participate in more public-private partnerships (PPP) airport projects, hoping to tap on its expertise in managing malls and the country’s largest airline.

JG Summit Holdings Inc. president and CEO Lance Gokongwei said his group is eyeing to add more airports to its aviation project development portfolio.

At present, JG Summit is engaged in the operations of Clark International Airport through the Luzon International Premiere Airport Development (LIPAD) Corporation.

JG Summit is waiting for government to approve its P856-million bid to take over the Sayak Siargao Airport, in partnership with the Philippine Airport Ground Support Solutions Inc. and the Asian Infrastructure and Management Corp.

Gokongwei said the JG Summit team in LIPAD is scanning the terrain for more airports that can be turned over to the private sector. He believes JG Summit has what it takes to go big in the airport business, boasting competence in both aviation and property management.

“Definitely, the team in LIPAD is looking at more airports,” Gokongwei said.

For JG Summit, betting on airport PPPs is an ecosystem play that comes with running an airline in Cebu Pacific and building properties via Robinsons Land Corp.

“We think there are opportunities in other airports, so we continue to explore other (projects). It is part of the ecosystem strategy. We are already in aviation, we know how to operate malls, and an airport is a very large mall,” Gokongwei said.

For the Sayak Siargao Airport, the proponent plans to rehabilitate the existing passenger terminal building of the gateway. Similar to malls that require expansion when foot traffic is going up, the airport will be expanded, too, to accommodate more tourists in Siargao.

Cebu Pacific flies to Siargao daily from Cebu and Clark. As of May, the airline reaches Siargao from Cebu five times a day and from Clark twice daily using ATR turboprops.

Gokongwei said JG Summit is competent in managing an airline and malls, and this expertise is what gives him confidence that the group can become a bigger player in airport operations.

“We want to insert the knowledge that we have—in both businesses of aviation and property—in pursuing more opportunities in the aviation space,” Gokongwei said.

The head of the Gokongwei empire said JG Summit would tie up with other companies in vying for the concession of airport PPPs.

Gokongwei said JG Summit works well in partnerships, as seen in its projects with the MVP Group in Manila Electric Co. and with the Zobels in the Bank of the Philippine Islands. It is also limited to a 33% share in any aviation project due to its ownership of Cebu Pacific.

JG Summit expects to benefit from the policy of the Department of Transportation to privatize airport operations. Transportation Secretary Vince Dizon wants 20 airports under private control by the end of the Marcos administration in 2028.

There are seven airports operated by the private sector: Caticlan, Mactan-Cebu, Clark, Bulacan, Ninoy Aquino International Airport, Laguindingan and Bohol-Panglao.

“List will increase to around 15 next year, with the addition of the regional airports bundle, [and] by 2028 we target a total of 20 airports under PPP,” said Dizon.

Gokongwei backs Dizon’s PPP policy for airports, saying that the government should reduce its role to the regulation of essential assets, such as airspace and runways.