GMCAC cautious on MCIA investment

MANILA, Philippines — GMR Megawide Cebu Airport Corp. (GMCAC), a joint venture company of Filipino engineering and infrastructure company Megawide and Indian infrastructure developer GMR, remains cautious on pursuing new investments for the Mactan-Cebu International Airport (MCIA) due to prevailing uncertainties.

GMCAC president Louie Ferrer said the company has put on hold earlier planned developments at the MCIA, citing prevailing uncertainties such as soaring fuel costs and the Ukraine-Russia conflict, among others.

“We had a lot of plans for Cebu Airport. We had a plan for a hotel before, but we’ll put that on hold for now, depending on the traffic,” Ferrer said, adding that “we’re just less aggressive than before.”

Together with other airports in the country, passenger traffic at the MCIA has significantly dropped in the past two years due to travel restrictions brought about by the COVID outbreak.

Ferrer said the MCIA is still far from reaching its pre-COVID passenger traffic of about 35,000 a day.

Due to the pandemic, aviation think tank CAPA-Center for Aviation earlier projected that while some airport development projects would continue, others would inevitably be delayed possibly for years.

CAPA had also said that few investors want to commit to airports and they cannot be blamed for doing so given the current situation in the aviation sector brought about by the pandemic.

Fitch Solutions, for its part, has cautioned downside risks toward the potential for delays in project time frames or even suspensions and cancellations over the near-term due to the uncertainty amid the pandemic and the possibility of reassessing business cases for some airport infrastructure developments in Asia.

“Investment into airports may be shifted back or postponed as operators look to align investments with recovering passenger demand, which is likely only going to return to pre-pandemic levels post-2025,” it said in a report.

GMCAC took over development of all landside facilities of the MCIA in November 2014 under a 25-year public-private partnership concession agreement with the government.