Footprint Opportunities For Ferrovial

Markets, which presents opportunities for the Ferrovial Airports Division

Ferrovial Airports is a global international company that deals in major activities such as construction and services. It is well-established company and as such, can expand its business operations in international markets that provide significant opportunities for expansion. Ferrovial S.A is known for its successes in acquisitions, and these have led to it having a huge growth potential. In addition, owing to the fact that it moved its corporate headquarters of its international business from Oxford and located it in Amsterdam to avoid the complexities associated with Brexit, has enabled Ferrovial S.A to access various international markets.

Some of the international markets that present opportunities for the growth and expansion of Ferrovial S.A are the South American market, and the Asian markets such as India and Vietnam. Firstly, the Ferrovial S.A had offered $1.5 billion; in order to expand the Denver airport, which then would create 39 new gates come 2021, thus increasing the capacity of the airport by approximately 30%. This would enable Ferrovial Airport to enter the South American market easily. It is evident that in South America, Ferrovial S.A will benefit from massive increase in profitability through business expansion, as it will take advantage of its extensive experience with various infrastructure clients, whilst also benefit from exporting various know-how value-added services in the oil and gas industry. An opportunity is also noted in President Trump’s intention of increasing various private sector infrastructure projects, especially in the transport sector, and most specifically in airports, where he desires that both private and private transport sectors should combine in delivering new airport terminals. Privatization of various airport assets has been noted as a working progress in America since 1996 when there was an initiation of the Airport Privatization Programme. Up to date, it is still considered one of the most successful deals. In America, privatization means “leasing,” where there is no permission of private sector ownership, except under specific circumstances. One of the benefits that America stands to gain from privatization is that either to a lesser or even greater degree, public authorities do not lose control when they acquire external finances when faced with shrinking budgets. Privatization had no use in America, until recently, when it was noted that various public-private projects have expanded rapidly in America, and expectedly, the trend will continue. This then poses another good opportunity for Ferrovial S.A to expand into South America via the expansion of the Denver International Airport.

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Another potential market for the expansion of Ferrovial S.A is the Asian market. For instance, India has one of the world’s highest forecasts, in terms of airport infrastructure investment. Notably, the country expects to have an average yearly increase of 15.4% of airport infrastructure expenditure, and this amounts to approximately US$14 billion to be realized in the course of the next decade. Moreover, Asia has a generally high economic growth (estimated at 7.4% in 2014), as well as a rapidly expanding population. It is also significant to note that India has an outdated airport infrastructure, which is presently undergoing serious re-development, in order to anticipate significant traffic growth that is reflected in the country’s high investment forecasts. This creates a good opportunity for Forrevial S.A to expand into its market, in order to benefit from increased profits. In addition, constant loosening of controls, based on various foreign investment, as well as privatization of airports, would as well aid the country in meeting certain crucial targets. Moreover, Vietnam is also a potential market for Forrevial S.A expansion, as it has a high economic growth, in terms of air traffic. Its forecast estimates a CAGR of approximately 10.1% to be noticed in the period between 2014-2024. Vietnam expects to realize a cumulative expenditure on significant airport infrastructure of approximately US$16 billion, from 2015, and projected to the year 2025. Notably, these projections come alongside privatization of various state-owned airport corporations, ease in acquiring a visa for entering the country, as well as high GDP, which was estimated to be 6% in the year 2014. As such, a good opportunity is presented for Forrevial S.A to expand into these two Asian markets.