Ang sees profit potential in dual airport gambling

San Miguel Corp. Chairman and CEO Ramon Ang is confident that the conglomerate’s ambitious plan to operate two adjacent international airports in Manila will be both feasible and profitable, countering concerns about potential overlap and impact on the company’s finances.

The SMC-led consortium is to rehabilitate the aging Ninoy Aquino International Airport (NAIA) and build the Bulakan International Airport.

Ang said in an interview with Forbes Asia that despite their proximity, the two airports complement each other and will cater to the growing demand for air travel in the country. The NAIA modernization is estimated to cost P170.6 billion and is expected to be completed in 2028, coinciding with the opening of the P735 billion Bulakan airport.

SMC has secured a 50-year operating contract for Bulakan Airport, a massive infrastructure project that is considered a game-changer for the Philippine aviation industry.

The double airport project is causing a stir due to the proximity of the two facilities, which are only 35 kilometers apart.

Ang is confident that the Philippines’ expanding aviation industry can support both airports and dismisses concerns about market saturation.

“We select projects that fit well with our current portfolio and create synergies with our other business areas,” Ang was quoted as saying in the Forbes report.

The San Miguel-led consortium, which will operate NAIA for 25 years, has offered to give 82.16 percent of NAIA revenues to the government – ​​twice the second-highest offer and nearly four times the lowest.

Without giving too many details, Ang outlined the business areas around the airport premises and the operations of the two airports through which San Miguel could generate revenue from its P906 billion twin airport project.

Aside from revenue from airport management, San Miguel will generate revenue streams from retail, logistics, fuel supply and real estate development, Ang said, according to Forbes.

Around Bulakan Airport, San Miguel is developing an industrial park, a residential area, a golf course, a race track, toll roads and public rail transport, which will generate additional revenue for the company.

According to the report, Ang also expects the industrial park surrounding Bulakan Airport to attract exporters and generate a steady flow of air cargo, possibly leading airlines to move away from the old airport.

Ang said airports are essential for the country to catch up with its neighbors in attracting tourists. He said the Philippines is lagging behind due to a lack of investment in infrastructure – such as airports, roads and power plants – that can attract tourists and investors.

“If you look at the last 30 to 40 years, investment in these key industries has been sluggish,” Ang said. “That’s why we’re lagging behind many of our peers in Southeast Asia.”

“In order for us to grow to 30 million tourists a year,” says Ang, “we need a new airport and we need to solve the traffic problem.”