Research On Financing Options For Macau International Airport

Civil airport being the important fundamental infrastructure of the national economy, its characteristic of public product and externality constitutes the civil public interest characteristic; on the other hand, its characteristic of price exclusiveness and natural monopoly may realize its profitability, thus it can be managed in the same way as the enterprise. Because of this twofold characteristic of the civil airport, it makes its financing options quite unique.Since Macau International Airport was put into operation in 1995, it's been managed in a corporatized way under the shareholding system and special concessionary arrangement, while Macao government is the major shareholder. Although its operational profit has been increased steadily, it still resulted in a net loss owing to the cost of the interest for the debt and the depreciation. Nevertheless, the fundamental infrastructure urgently needs further improved or expanded, in order to meet the operations needs in line with the growth of the amount of the annual passengers and cargo, and also with the rapid boom of gaming industry in the territory. In year 2006, CAM - Macau International Airport Ltd. announced a 4 billion Macao pataca infrastructure expansion plan and it will be gradually implemented in the following five years. Thus, the choice of financing options and its execution is imminent.Based on the study of the financing theory and airport financing applications by different scholars, and the theory of corporate financing together with that of public financing, as well as the review of the practices of the airport financing by different airports both domestically and abroad, the thesis intends to reveal the external environment, internal capital structure and financial status, and study the different possibility and feasibility of the financing options for Macau International Airport. Then by the method of comparison, it gets the conclusion that Macau International Airport should adopt the combined solution of strategic partnership financing and the governmental financing. It aims to provide a useful reference for CAM on this subject.