Airport Valuation Mandate for Infrastructure Investment

Mandate Description

The mandate consisted of a business valuation assignment carried out on behalf of an investment fund as part of its entry into the share capital of an international airport.

The objective of the mission was to determine the fair economic value of the airport asset, analyse long-term performance prospects and assess the robustness of the financial model within a complex regulatory environment.

The airport concerned had the capacity to accommodate several million passengers per year, significant logistical infrastructure and a diversified portfolio of integrated commercial and real estate concessions.

The valuation was conducted in the context of a strategic co-investment transaction aimed at supporting the development and modernisation of airport facilities.

Key Issues

The main challenges of the mandate were to determine the economic value of a regulated infrastructure asset.

A key objective was to model long-term cash flows by integrating aeronautical revenues, commercial fees and non-aeronautical income streams.

The valuation also needed to take into account traffic rights and authorised air routes, which directly influence capacity, airline presence and the overall profitability of the airport platform.

Another critical aspect was assessing the impact of airline concessions and slot allocation on the future value of the asset and on the airport’s competitiveness relative to other regional hubs.

Finally, the assignment aimed to ensure methodological consistency between financial valuation and infrastructure asset management approaches, in line with international valuation standards including IVS and RICS.

Approach and Results

The valuation relied on several complementary approaches.

• A discounted cash flow approach was applied, incorporating detailed assumptions on traffic evolution, revenue streams and capital expenditure requirements.
• A yield-based approach was also used, based on expected profitability ratios observed for comparable airport infrastructure assets.
• In addition, a sector-specific multiple approach was implemented using a panel of international peer airports.
• The analysis resulted in a coherent and defensible valuation range, reflecting regulatory constraints, traffic dynamics and the expansion potential of the airport platform.

The work also quantified the sensitivity of the valuation to traffic volumes, flight rights, airport pricing assumptions and the financing structure of the investment.

The results highlighted a strong correlation between passenger traffic and the performance of commercial concessions, including retail, car parks and duty-free activities, underlining the complementarity between the operational and real estate dimensions of the asset.

The valuation served as a technical basis for negotiations between investors.