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MBJ plans US$20m upgrade of Sangster runway

Published:Friday | November 11, 2011 | 12:00 AM
A British Airways aircraft land at the Sangster International Airport in October 2009. - File

Steven Jackson, Business Reporter

MBJ Airports Limited, operators of the busy Sangster International Airport, will seek US$20 million (J$1.7 billion) in financing to upgrade and repave the runway by 2012, its managers said.

The 2.6-kilometre runway will allow for smoother and safer landings in Montego Bay where the bulk of air traffic to Jamaica deplanes.

The upgrade is part of MBJ's concession obligation to maintain high operational standards.

Work on the runway will begin in May 2012, Elizabeth Brown-Scotton, chief commercial officer at MBJ Airports, told the Financial Gleaner this week.

A financier is yet to be identified, but shareholders won't likely use their own cash in the deal. The airport investors have already spent US$180 million since 2003 on upgrading the airport and have yet to receive a dividend, said Brown-Scotton.

In need of repairs

A pilot, who is also an air traffic controller, told the Financial Gleaner that the runway really needed the repairs.

"It's the only airport where you try to avoid the centre when landing because of the cracks," said the pilot, who spoke on condition of anonymity. "The runway closes sometimes daily to allow for patching repairs. But they are never enough."

Jamaica Airline Pilots Asso-ciation executives were not available for comment up to press time.

MBJ Airports received a 30-year concession to operate and manage Sangster International Airport in April 2003. The companies with stakes in MBJ Airports Limited are Spain's Abertis Airports at 74 per cent, and Canada's Vancouver Airport Services at 25.5 per cent.

"We are going to overlay the runway for US$20 million," said Brown-Scotton. "Financing will likely come from debt ... the Government of Jamaica will not finance it," she said.

The airport is also considering extending the runway but such negotiations are ongoing, the spokeswoman said.

Kingston-based Norman Manley International Airport, which is up for divestment, is also planning to extend its runway by up to 25 per cent. It awaits environmental approval.

Performing as expected

Brown-Scotton said that Sangster was performing as budgeted even though passenger activity was flat due to the economic uncertainty in the United States and Europe.

Specifically, total passengers at Sangster over nine months ending September 2011 hit 2.6 million, reflecting anaemic growth of 1.3 per cent over last year. Contextually, total passenger levels are now just returning to pre-crisis levels in 2007-08, Brown-Scotton said.

"We are performing as expected, based on the economic realities in the world," she said.

Abertis' airports division has stake in 30 airports in nine countries, with a worldwide traffic level exceeding 80 million passengers annually. The division contributed to about 3.5 per cent of the conglomerate's total operating profit. The conglomerate includes airports, toll roads, car parks, logistics and telecoms operations.

Total passenger movement at MBJ Airport provisionally totalled 3.28 million in the 2010 calendar year, versus 3.24 million in 2009, according to the Economic and Social Survey Jamaica report.

Jamaica now has three international airports, Sangster, Norman Manley and the newly upgraded Ian Fleming Airport in Boscobel handles single-engine and business jet traffic.