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Vernamfield development not likely until next three years, says MoBay airport operator

Published:Monday | April 17, 2017 | 6:14 PMSteven Jackson

The Mexican operator of the Sangster International Airport in Montego Bay, St James, the island's busiest, expects three years to elapse before the government starts executing its Vernamfield airport project in Clarendon.

Grupo Aeroportuario del Pacifico (GAP) - translated as Pacific Airport Group - made the statement in the context of outlining its local competition, rather than critiquing the government. In addition, it said it remained largely unperturbed by plans to grow traffic at the Norman Manley International Airport in Kingston, which is set to be divested, as both airports largely serve separate tourist and business markets.

"In recent years, the Jamaican government has discussed plans to build a third international commercial airport, most likely on the southern coast at Vernamfield, to meet the long-term requirements for the growth of air transport. We do not expect the Kingston airport's traffic growth to be a major factor in the Montego Bay airport concession's growth, as the airports serve different demands; nor do we expect the Jamaican government's Vernamfield airport plan to be executed within the next three years," stated GAP in its annual report released last Wednesday.

Last week, Transport Minister Mike Henry announced that the Tinson Pen aerodrome and Jamaica Defence Force Air Wing, both currently situated in Kingston, would be relocated to the proposed Vernamfield Aerotropolis in Clarendon. The long-discussed Vernamfield project forms part of the multibillion-dollar logistics port development set for southwest Clarendon. There was no explicit timeline for the development.

The Sangster Airport grossed 1.6 billion Mexican pesos (US$77.7 million or roughly J$9.9 billion) in the 2016 calendar year under the GAP management. It compares with 995.7 million pesos or roughly US$48.1 million in revenues over the nine months in 2015, GAP having acquired the airport in April of that year.

The Sangster International Airport is Jamaica's main tourism port. In 2016, it served 3.95 million terminal passengers, said GAP. Of the total passengers in that year, some 68.6 per cent came from the United States, 17.1 per cent from Canada and 12.5 per cent from Europe. A total of 27 international airlines operate at the airport, providing year-round and seasonal services. The principal airlines are American, Delta, Southwest, and JetBlue. Airlines serving MBJ provide service from over 61 airport destinations. Of these, Toronto, New York, Atlanta and Fort Lauderdale are the most popular.

"In Jamaica, American Airlines transported a significant percentage of the Montego Bay airport's passenger traffic," said GAP. "In 2016, revenues from American Airlines and the passengers it moved through the Montego Bay airport totalled 236.8 million pesos (US$11.5 million), of which 156.9 million pesos (US$7.6 million) was paid to Montego Bay Jamaica Airports in the form of passenger charges, representing 14.7 per cent of the sum of aeronautical and non-aeronautical revenues for the Montego Bay airport," it added.

capital upgrades

GAP plans to spend US$37.9 million on capital upgrades between 2015 to 2019. In 2016, MBJ Airports Limited (MBJA), operators of the facility, made investments of approximately US$2.4 million in capital expenditure, primarily for expansion and remodelling of the terminal and improvements to the runway and apron. In 2015, MBJA made investments of approximately US$700,000 in capital expenditure, which was fully dedicated to the replacement of equipment, the company said.

"These capital investments have been earmarked for the expansion of terminals, aprons and equipment at the Montego Bay airport. Estimated committed investments in the current capital development programme from April 2015 through December 2019 are US$37.9 million. These investment commitments are expected to be funded by cash flows from operations. However, MBJA may seek financing, subject to Airports Authority of Jamaica approval, if favourable terms are available," stated the financials.

GAP is majority owned by the Mexican government with its shares listed on United States exchanges. It holds a concession agreement with the Jamaican government which lasts until April 2033.

On April 20, 2015, GAP acquired 100 per cent of the shares of Desarrollo de Concesiones Aeroportuarias, which owned 74.5 per cent of the shares of MBJA. The remaining 25.5 per cent is Canadian-owed Vantage, a non-controlling shareholder.