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Profit from airports' monopoly through these two strategies:

Acquiring airports is typically out of reach for the majority of investors. These are two methods you might employ.

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Investors typically lack ownership of airports. This article explores two approaches to acquire...
Investors typically lack ownership of airports. This article explores two approaches to acquire airport assets.

Profit from airports' monopoly through these two strategies:

Airports can represent lucrative investments, particularly when situated in strategic locations. Even in less-ideal locations, airports' monopolistic nature often provides a competitive edge over other infrastructure assets. Regrettably, many airports are owned by substantial private-equity firms, rendering them inaccessible to average investors. However, select opportunities exist.

One such opportunity is Athens International Airport, initially established in 1996 under a build-own-operate-transfer (BOOT) model, whereby the Greek government held a 55% stake, and investment firm Hochtief (later renamed AviAlliance) owned the remaining 45%. The airport witnessed consistent traffic growth in the early 2000s until the global financial crisis halted progress. In ensuing years, traffic dwindled for six consecutive years until the airport became a target for Greece's creditors due to the debt crisis.

Athens Airport's Notable Turnaround

The Greek government commenced its privatization efforts in 2019 by extending the concession agreement between the company and the government for an additional 20 years, extending its operation tenure to 2046. This deal netted €1.14 billion for the Greek state. By this time, the Greek state-owned asset management company, Hellenic Republic Asset Development Fund (HRADF), which was created in July 2011 to manage and leverage private property owned by the Greek state, controlled the government's 30% stake in the airport.

In 2024, HRADF sold its stake in Athens International Airport on the Athens Stock Exchange following the airport's recovery from the pandemic. The initial public offering (IPO) attracted significant interest and raised €784.7 million. AviAlliance continues to be a significant investor, retaining about half the business, while the Greek state, through HRADF, maintains a 25.5% stake.

Greece's economy has experienced a remarkable recovery since the debt crisis and the pandemic, with improvements in public debt-to-GDP ratios, lowered unemployment levels, and GDP growth forecasts. Athens International Airport mirrors these advancements, serving as a microcosm of Greece's recovery.

The airport primarily caters to leisure travelers, with 85% of traffic related to holiday seekers. As leisure travel has rebounded faster than other aviation segments, leisure-focused airports like Athens International have outperformed in the recovery. Indeed, traffic to the airport is currently around 30% higher than pre-pandemic levels.

Plans for Growth

Over the coming years, the company plans to expand its capacity, aiming to accommodate up to 50 million passengers annually. Initially, the airport group anticipated expanding in two stages, with both stages slated for completion by 2032. However, recent decisions have accelerated the spending plan, aiming to deliver cost savings of around €100 million and an outlay of €1.28 billion in 2024 prices, compared to the previously projected €1.35 billion.

Analysts at Deutsche Bank cite the airport's steady growth projections, unique monopolistic structure, long-term operating agreement, and reasonable valuation as reasons to highlight the company's stock as one of their top European small- and mid-cap picks. Based on 2025 earnings estimates, the shares in Athens International Airport are trading at a forward price-to-earnings (P/E) multiple of 15, with a dividend per share of 0.67 euro cents expected for 2025, translating to a yield of roughly 7.5% and accounting for around half of annual cash flow.

Another listed airport firm, TAV Airports, operates 15 airports in eight countries, regularly serving 110 to 120 million passengers a year. The firm recently purchased Kazakhstan's primary airport, committing a total investment of $120 million, and is projected to generate €129 million in EBITDA in 2025. The shares have surged 1,200% over the past five years, demonstrating these unique assets' potential for investors.

  1. Investors considering opportunities in property and finance might find the education-and-self-development segment beneficial, as the turnaround of Athens International Airport showcases the potential returns from long-term investments.
  2. The technological advancements in the aviation sector, such as optimizing airport traffic and improving passenger experience, have benefited Athens International Airport, contributing to its increased traffic, despite the setbacks caused by the pandemic.
  3. With growing interest in the sports industry, particularly in sponsorship and advertising, Athens International Airport, being a hub for leisure travelers, provides an attractive avenue for companies to invest in education-and-self-development opportunities, boosting both their brand awareness and financial savings.

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