Adac plans foreign buyouts

Adac plans to acquire and manage foreign airports, as well as develop new ones to spur tourism and development.

A plane taking off from Abu Dhabi International Airport.
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ABU DHABI // Abu Dhabi Airports Company (Adac) plans to acquire and manage foreign airports, as well as develop new ones in Al Gharbia to spur tourism and development, its chief executive said yesterday. The two-year old company is looking to diversify its holdings even as it oversees the development of a new US$6.8 billion (Dh24.96bn) terminal at Abu Dhabi International Airport, due for completion in the beginning of next decade.

The airports operator is working closely with the Tourism Development and Investment Company (TDIC) of Abu Dhabi to create a new air shuttle service to Sir Bani Yas Island in Al Gharbia - formerly known as the Western Region - in October, when a new hotel opens on the island. Prestige Jet, an Abu Dhabi-based charter jet operator, is expected to launch the first flights and is in negotiations with manufacturers to purchase aeroplanes for the service.

With an eye to international expansion, Adac now joins the ranks of DP World and Dubai Aerospace Enterprise (DAE), two UAE companies that have sought to leverage the emirate's oil boom to purchase transport hubs abroad. DP World is now the world's fourth-largest ports operator, while DAE issued an unsuccessful bid on Auckland International Airport last year. In March, Adac hired Rudy Vercelli - an industry veteran who was most recently the chief operating officer at Mumbai International Airport - to head up the company, which was formed by Government decree in March 2006.

Mr Vercelli said Adac was interested in managing airports in emerging markets, and was actively looking at opportunities in place such as North Africa, India, Central Asia, Eastern Europe and South East Asia. "We're going to be taking Adac international and are currently looking at assets to bring into our portfolio," Mr Vercelli said. The airports company was looking for an airport with the "right fit and of a manageable size", including "greenfield" airports that were still under development, he said.

A wave of privatisation is spreading over the industry as governments welcome in foreign firms to take over the responsibilities and rewards of airport management. A notable example is the UK, where London Heathrow and other airports are managed by Spain's Ferrovial, after it acquired British Airport Authority (BAA) for $19bn in 2006. As it looks abroad, however, Adac is also paying attention to opportunities closer to home. The airport operator has been brought in to develop the air transport links necessary to stimulate tourism on the Desert Islands destination in the Western Region, which hopes to draw in 250,000 tourists per year.

The islands consist of Sir Bani Yas Island, Dalma Island and a cluster of six outcroppings called the Discovery Islands. Sir Bani Yas island is the site of a small runway that Adac has taken over. Adac is now in the process of upgrading the infrastructure in time for the opening of the 64-room Desert Island Resort and Spa in October. In addition, Adac had not ruled out developing other new airports in the Western Region, and was evaluating the prospects for an airport in the area's isolated hinterland, as well as on other islands, Mr Vercelli said.

The plans are already stirring interest among Abu Dhabi's private aviation firms, including Prestige Jet and Falcon Aviation Services, which are based at Al Bateen Airport on Abu Dhabi Island.