Airports, as an investment theme, are unique, as they have structural economic competitive advantages. Generally, airports exist as a monopoly infrastructure within their geographical areas of operation. This usually entails a licence from the state or federal entity, with considerations such as scarcity of land, environmental issues and flight pathway constraints. As such, most airport operators operate solely within a geographical area, with their moats made stronger through state ownership and long-term concessions. Here, too, CAG is different as it competes with other airports in Asean and the broader Asia Pacific region, and has done so since it started commercial operations in 1981.
Changi Airport is one of the world’s best airports and one of the most efficient. This is borne out by Changi Airport Group’s (CAG) FY2024 results for the 12 months to end-March 31, where revenue was up 45% and expenses up 20%, giving rise to positive jaws, and operating profit was up many times to $493.5 million.
CAG is not listed and is owned by the Ministry of Finance. Although there are many listed airports, few can rival Changi Airport in service, comfort and experience.
