Plane in the sky

AviAlliance - Transaction Advisory

The challenge

In 2015, Nyras was asked to assess a European airport for a potential acquisition by a consortium that included AviAlliance. The airport would have required significant capital and infrastructure investment to achieve the growth figures promoted by the vendors. Nyras’ goal was to determine if the traffic expectations were achievable and whether they would return the investors’ targets.

AviAlliance (formerly HOCHTIEF Airport) is one of the world's leading private industrial airport investors and managers. The company has built up an attractive and balanced portfolio, with shareholdings in Athens, Budapest, Düsseldorf and Hamburg airports. In 2014, these airports handled a total of 62.8 million passengers.

The solution

We provided a highly experienced senior team of airline and airport executives to consider a range of issues. We began by looking at the big picture and considering the airports’ prospects for the future, regarding economic development for both business and leisure traffic and the growth plans of the key airline customers. We considered the likelihood of new entrants opening services to challenge the outbound carriers, the evolution of the aircraft fleets in the decades ahead and the impact these changes would have upon the airports’ capacity needs.

Our process involved creating a traffic forecast based on more than just standard economic, passenger and aircraft movement growth trajectories. Nyras considered all physical, operational, regulatory and commercial limitations on the facilities including noise and environmental concerns, ramp and terminal capacity and airline bilateral treaties that could hamper growth.

By using our strong industry relationships, Nyras were able to secure ‘off the record’ interviews before the formal process began with key commercial and operational executives from existing and targeted client airlines, providing AviAlliance and its shareholders with a unique understanding of how the airports’ prospects and strategies are perceived.

Nyras also applied its knowledge of the aircraft and engine manufacturer development plans, to help AviAlliance judge noise and environmental limitations, parking and taxing impacts – resulting from weight and wingspan size – and the likelihood of airlines increasing or reducing services as their fleets evolved.

These findings were compiled to assist AviAlliance in considering alternate development and investment scenarios that were likely to secure more achievable and affordable growth.

The results

In each case, Nyras uncovered significant issues that would not have emerged through a traditional due diligence and data room driven approach. In each case, the findings created a material impact on the business case devised and the subsequent bid price.

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