Aboitiz Equity Ventures wins concession for Laguindingan Airport

Aboitiz Equity Ventures [AEV 37.00, down 1.6%; 99% avgVol] [link] won its bid to operate the Laguindingan Airport in Misamis Oriental, securing a “Notice of Award” for a 30-year concession to upgrade, operate, and maintain the airport that could be signed by the end of this month and come into force by April of 2025. AEV’s proposed P12.75 billion project “involves extensive development” to the passenger terminal building and surrounding facilities that would increase the airport's annual capacity from 1.6 million passengers to 3.9 million in the first phase, and then to 6.1 million by the end of the second phase. AEV already manages the Mactan-Cebu International Airport after it bought Megawide [MWIDE 2.74, down 0.4%; 12% avgVol] out of that concession, and has submitted an unsolicited proposal for similar concessions for airports in Bohol, Bicol, and Iloilo.

MB bottom-line: AEV might have been a part of the self-named “Superconsortium” that failed to win its bid to redevelop and operate NAIA, but it seems to have simply pivoted its sights from dominating Metro Manila to dominating “everything else”. AEV’s strategy is to own the regional airport game, and it got off to a great start by acquiring the Mactan-Cebu airport (our second largest by passenger volume). Laguindingan Airport is the 6th largest by volume (for now), and the other targets that AEV has are Iloilo (5th largest), Bohol-Panglao (9th largest), and Bicol (17th largest). The passenger volume at the regional airports is growing faster than the volume at NAIA, and will only stand to benefit from the government’s long-term push to promote domestic and international tourism as a pillar of the country’s growth going forward. I’m a little underwhelmed by the Aboitiz Family’s mergers and acquisition activity considering how close it is to the current administration; I was primed by the purchase from MWIDE to think that they were going to be far more bold in their approach. That said, maybe they’ve taken a quick glance at the charred wreckage of Dennis Uy and have decided to play the long game and just consistently acquire these super long-term concession agreements at a reasonable pace.

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