The Chinese consortium Tzaneen International recently announced that it was in the final stages of negotiating to buy Ciudad Real airport in Spain, 4km runway and all, for about US$10,000.
Some of the support buildings might cost a little more, but all-in the entire hardware of the airport and its support facilities would cost a few tens of millions of dollars.
What would I do if I were the buyer of this airport?
After all, there is a reason the airport is unused. It’s a long way from any major cities, ground infrastructure connections are poor, and no airlines seem interested. So purely as an observer, here are some of my thoughts for the leaders of Tzaneen:
Buy an option on as much land around the airport as possible. Don’t commit the capital just yet, but agree the price and an irrevocable right to buy. If you are successful, you will really really want to own the surrounding land, which may be where the profits are to be made.
Create a reason for lots of passengers to fly through the airports.
- There are few routes today that still require a stopover, but North Asia to Latin America is one of them. Create an agreement with Chinese airlines and even Korean and Japanese airlines that they stop over in Ciudad Real.
- This will need the terminal to have the retail and other services to make this appealing – airside hotel, showers, restaurants and a wide range of retail outlets.
- Approach Latin American governments to see if you can set up immigration and customs pre-clearance in Ciudad Real, giving a really meaningful benefit to travellers when they land in Latin America.
- Create a partnership with European low-cost airlines to connect Chinese tourists to an ever wider set of destinations as tourists become more adventurous. Also work with these carriers to hub in European passengers who want a low cost ticket to China.
- Take advantage of being one of the very few airports in Europe to offer 24-hour take-off and landing.
Create reasons for passengers to stop and stay around the airport for a few days (ideally using facilities on land you have purchased). Build the largest, most comprehensive outlet mall possible. From Bicester village in the UK to Serravalle in Italy, Chinese tourists swarm to outlet malls and are likely to continue to do so. Maybe even create competing or specialized malls targeting differing customer segments. Encourage Chinese and Western theme park operators to build by the airport. With the weather you can offer a year-round destination. And maybe later, attract other service industries – golf, medical services and the like.
Create reasons for freight to stop. Can you agree to create a free trade zone with the Spanish government to hold Chinese manufactured goods? Maybe also an assembly and manufacturing zone with preferential tax treatment? Work with the local Ciudad Real government to create a hub for premium organic agricultural products that can be shipped to meet the demand of the Chinese middle class.
Work with Chinese developers. There are many Chinese developers with significant experience outside China, especially in Europe. They continue to look for interesting new opportunities. For facilities ranging from office developments to logistics parks, from theme parks to hotels, leverage the best that China has to offer.
It’s likely many of these ideas won’t hold up to economic scrutiny. But it will require something as bold as this if not bolder to create a viable and profitable outcome that works for you, your investors, and the local government.
Image Credit: Flickr/Ming Xia