FOR MALAYSIA AIRPORT OPERATOR
Client
An Airport Operator
Products & Services
- Revenue Optimization
- Financial Modelling
- Socio-Economic Assessment
- Negotiation Support on the Revision of the Concession Agreement
Description of Project
Client
The client is an airport operator who has entered into a concession agreement with MAHB to operate the commercial retail area of airport terminal, a car parking area, a business aviation centre and a hangarage complex.
Background
In 2019, the client has experienced cash flow deficit due to the high bank loan repayment as a result of CAPEX incurred and rental lease payable to MAHB to cover the previous shortfall during construction period. The cash flow deficit is expected to continue until both the bank loan and shortfall of rental lease to finish repay in the next 8 years.
Challenges & Expectations
The current concession sub-lease terms will end by the year 2037. However, the client has difficulties to recover the high CAPEX spent upfront and rental lease due to the short timeframe. Therefore, the client aspires to review the concession agreement to optimize returns to parties involved and explore potential revenue optimization plans on current concession assets.
Our Role on the Project
Scope of Services
The team was tasked to review concession agreement, explore various revenue optimization plans and evaluate and assess strategic approach in re-negotiating the existing concession agreement.
Solutions/Outcomes Delivered
With our comprehensive approach of revenue optimization and the substantial expertise in business aviation industry from our subject matter expert, 27Group has conducted high level review to ascertain as-is operational performance and framed the revenue optimization proposals on all the concession assets.
Apart from the financial feasibility of the revenue optimization plans, a high level socio-economic assessment is built to simulate the potential socio-economic benefits arise from the project. A preliminary strategic approach has outlined to facilitate the negotiation on concession agreement,
