Airport International Group: Managing Jordan’s Aviation Ambition

August 20, 2013 in Transport

Running a modern airport can be challenging enough, but when a country’s economy is so reliant on aviation, the pressure intensifies. In March, His Majesty King Abdulla II inaugurated in the presence of Her Majesty Queen Rania Al Abdullah, the new Queen Alia International Airport (QAIA) terminal, which is considered one of the most important air transport gateways in the region, supporting the Kingdom’s economic, tourism and trade growth. For Airport International Group (AIG), the opening was the culmination of months of careful planning and hard work.

AIG is a Jordanian company comprising a consortium of local, regional and international partners brought together for their experience in finance, airport operations and construction. The consortium is made up of the following organisations: Invest AD (UAE); Noor Financial Investment Company (Kuwait); EDGO Group (Jordan); J&P (Overseas) limited (Cyprus); J&P Avax (Greece) and Aeroports de Paris Management (France).

In May 2007, the Government of Jordan signed a 25 year agreement with AIG, by which the latter was entrusted to operate, maintain and rehabilitate the existing QAIA landside and airside facilities.

The project to rehabilitate QAIA was bankrolled with a US$700 million investment, which later increased to US$800 million. The agreement saw AIG take responsibility for the completion of the design, engineering, procurement and construction of a new passenger terminal, with the remit extending to the demolition of the existing terminal at QAIA, once the new project was completed.

Airport-International-GroupThe airport was named after the late Queen Alia, and was built in 1983 in response to the growing airport traffic needs that Amman International Airport could not accommodate. At the time, passenger traffic was increasing at rates well above the international average, reaching a 25-30 per cent growth rate per annum and placing considerable pressure on the existing airport facilities and equipment despite continuous expansion and development.

By 1981, the number of arriving, departing and transit passengers had reached more than 2.3 million, while cargo traffic amounted to 62,000 tons and aircraft traffic topped 27,000 movements.

At that point the Ministry of Transport made the decision to build a new international airport in Jiza, 35 kilometres south of Amman, with sufficient capacity to cope with demand in the foreseeable future.

QAIA was built at an estimated total cost of JD 84 million. Passenger facilities were designed for 3 million passengers per annum, with the possibility for expansion to cater to 6-8 million passengers annually by the year 2000. However, in 2005 the government together with the International Finance Corporation (IFC) decided to develop a new airport, which eventually would be financed and operated through a Public Private Partnership (PPP).

“In 2007, the Government of Jordan selected Airport International Group (AIG) through an open tender to operate, rehabilitate and manage QAIA under a 25-year concession agreement. We at AIG were also placed in charge of constructing the new QAIA terminal, which would not only catapult the airport’s annual capacity from 3.5 million passengers to 9 million passengers (and later on to 12 million passengers), but would also introduce a unique travel experience.

“Inaugurated under the patronage of His Majesty King Abdullah II on 14th March, 2013, we are proud to say that the 100,000-square-metre new terminal boasts vastly improved infrastructure and cutting-edge facilities,” the organisation states.

Whilst the Government of Jordan retains ownership of the airport, the project is a prime example of successful public and private sector collaboration, with the Government reportedly receiving around 54.47 per cent of gross revenues for the term of the agreement.

The new terminal, reputed to have created around 20,000 direct and indirect job opportunities, forms a part of the Jordanian Government’s big ambitions to develop its infrastructure – a point underlined by the Minister of Transport and Energy and Mineral Reproducers Eng. Alaa Batayneh, who stated that the new terminal is one of the many accomplishments that are being implemented under Jordan’s ambitious development plans.

In his speech at the official opening, attended by Prime Minister Abdullah Nsoor and a number of high level officials, he confirmed that the new terminal is part of Jordan’s plans to develop the aviation sector and place foundations for civil aviation as a necessary means for growth:

“Your Majesty’s presence here today to open the new terminal at Queen Alia International Airport stands as a testament to the progress this country had made with regards to its development plans in a manner that directly benefits Jordanian citizens,” he stated.

“The 3.5 million passengers per year capacity of the old terminal has already been exceeded. The old terminal can no longer meet increasing worldwide demands for air passenger traffic,” he added.

He also confirmed that over the past 5 years, traffic at QAIA had significantly increased, with Jordan now directly connected to 61 stations across the world, compared to a previous 40 stations in 2006. The number of daily flights has grown from 110 to 180 flights while total passenger figures increased to over 6 million.

The new terminal has an Islamic architectural feel, while operationally, there is now a complete separation between arrivals and departures, with eight additional gates created and one remote boarding lounge serving different flights simultaneously, with phase two to follow with four new gates, resulting in a total of twenty five gates.

To underline the importance of the project for Jordan, Batayneh confirmed that the new terminal will provide the state’s treasury with revenues that far exceed previous revenues. The government’s share of revenues is at a percentage that is amongst the highest in the world for such projects. Furthermore, over 93 per cent of the sub-investments that have been made at the airport belonged to Jordanian investors.

Nazem Al Kudsi, Chairman of AIG confirmed that the organisation had been careful to ensure that the airport reflected values that stem from the Jordanian people themselves. “The renowned hospitality of Jordanians is reflected in our passion and commitment to give travelers a unique and unmatched experience.” He also highlighted that the values of integrity and transparency mirror Jordanian traditions and customs that are recognized across the world.

He said that the result of the work translated into a modern building increasing Queen Alia International Airport’s capacity from three-and-a-half million to nine million passengers per year, with future plans to increase the capacity even further to twelve million passengers per year, when needed.

In April the collaboration was acknowledged as one of the world’s top 40 public-private partnership (PPP) projects, with the airport receiving ‘Gold’ recognition as Best Emerging Market Infrastructure Project for Europe, Central Asia, the Middle East and North Africa in Emerging Partnerships.

Co-released by the IFC and Infrastructure Journal (IJ), and funded by the Public-Private Infrastructure Advisory Facility (PPIAF), the Emerging Partnerships publication recognizes the 40 best PPPs in emerging markets around the world today.

The accolade was further recognition for the impact of the airport – and AIG, the organisation behind the success, with Kjeld Binger, CEO at AIG stating: “We are very proud of, and deeply value, our close partnership with the Government of Jordan as we work together to position Queen Alia International Airport as a powerful economic asset for all Jordanians. Together, and by raising the Kingdom’s prime airport’s capacity, we aim to bolster Jordan’s tourism industry and open the door for greater economic opportunities.”