Finally, a world-class airport?

The Philippines was one of the first countries in Asia to have a modern airport. Since the 1960s, however, the country has fallen in its standing in the region, from being the second most progressive economy after Japan to being a laggard. These days the country trails the founding members of the Association of Southeast Asian Nations in terms of many economic and human development indicators.

The deterioration is reflected in the principal gateway to the Philippines, the Ninoy Aquino International Airport. While the country’s neighbors competed to have the best airport in the world, travelers listed the NAIA among the worst. The reputation improved with the opening of the more spacious NAIA-3, but 2023 opened with a massive power outage that crippled the airport.

So people are keeping their fingers crossed that privatization will be the answer to airport woes. Yesterday, the Manila International Airport Authority or MIAA announced a winner in the bidding for the rehabilitation, operation and maintenance of the NAIA: San Miguel Corp. SAP & Co. Consortium, which includes South Korea’s Incheon International Airport Corp.

Korea’s Incheon airport has been consistently ranked among the world’s best international gateways by the global aviation industry. Skytrax ranked Incheon fourth in the 2024 list, after Singapore’s Changi, Hamad in Qatar and Japan’s Tokyo-Haneda.

SMC SAP & Co., which also includes RMM Asian Logistics

Inc. and RLW Aviation Development Inc., won the bid by offering the highest revenue share for the government, at 82.1 percent. This was more than double the 33.3 and 25.9 percent proposed by rival bidders GMR Airports Consortium and the Manila International Airport Consortium of companies owned by the country’s top tycoons, respectively.

Questions have been raised on the feasibility of the 82.1 percent revenue-sharing scheme offered by the winning bidder. Unless the award of the contract is challenged, however, the concession agreement is expected to be signed on March 15, with the winner taking over NAIA management by September this year. The SMC-led consortium must pay P30 billion upfront and P2 billion annually. The contract for the project runs for 15 years, which may be extended by 10 years.

There are also questions on the extent of the authority of the private consortium to reorganize personnel at the airport, which will remain under government ownership. In August last year, the Office of the Ombudsman fired Cesar Chiong as MIAA chief and assistant general manager Irene Montalbo on the strength of complaints filed by MIAA employees, hundreds of whom Chiong had reassigned.

For the public, the main concern is whether the private consortium can deliver on its promise of turning NAIA into a worldclass airport. Filipinos are sick of having the country’s main gateway classified as one of the world’s worst.