In the absence of a written business plan or investment model presented verbally by Minister Ali Hamieh, we will discuss the investment model using clear language and data points.
The investment model predicts linear growth in passenger numbers for the new terminal, reaching a total capacity of 20 million passengers annually by 2030. Let’s examine the assumptions:
- Current passengers per year (existing terminal): 8 million (2023)
- New terminal operational year: 2027
- Initial capacity of the new terminal: 3.5 million passengers (2027)
- Total capacity (existing terminal + new terminal): 20 million by 2030
- Budget available for terminal expansion: $122 million
The assumptions also include a range of average revenue per passenger (ARPP) between $33 and $63, and a profit margin between 30% and 80%, both following a bell curve distribution.
With this information, questions arise about the lack of transparency surrounding the investment model. Why is there no written business plan available for public scrutiny? Furthermore, why is the contract set for 25 years instead of a shorter term, such as 10 years?
Now, let’s examine the potential returns. The model projects operator profits for the next 25 years, assuming government revenue of $33 per passenger from 2023 and linear growth in passenger numbers until 2030. Investor revenue begins in 2026, when the new terminal opens, and is calculated based on the ARPP and profit margin assumptions.
The table below displays the year, yearly passengers, and cumulative revenue for the investor, using a semicolon as the delimiter:
| Year | Passengers (in M) | Investor Revenue (cumulative) in Billions |
| 2023 | 8 | $0.00 |
| 2024 | 8 | $0.00 |
| 2025 | 8 | $0.00 |
| 2026 | 3.5 | $0.00 |
| 2027 | 13.3 | $0.26 |
| 2028 | 15 | $0.44 |
| 2029 | 18.3 | $0.90 |
| 2030 | 22 | $1.80 |
| 2031 | 22 | $2.70 |
| 2032 | 22 | $3.60 |
| 2033 | 22 | $4.50 |
| 2034 | 22 | $5.40 |
| 2035 | 22 | $6.30 |
| 2036 | 22 | $7.20 |
| 2037 | 22 | $8.10 |
| 2038 | 22 | $9.00 |
| 2039 | 22 | $9.90 |
| 2040 | 22 | $10.80 |
| 2041 | 22 | $11.70 |
| 2042 | 22 | $12.60 |
| 2043 | 22 | $13.50 |
| 2044 | 22 | $14.40 |
| 2045 | 22 | $15.30 |
| 2046 | 22 | $16.20 |
| 2047 | 22 | $17.10 |
| 2048 | 22 | $18.00 |
| 2049 | 22 | $18.90 |
| 2050 | 22 | $19.80 |
As shown in the table, investor revenue increases annually with the growth in passenger numbers, and cumulative revenue reaches $19.8 billion by 2050.
It’s crucial to note that the model is based on assumptions and does not account for various factors that could impact airport revenues and operating profits, such as inflation, fluctuations in passenger growth, and changes in the competitive landscape. Additionally, the model assumes linear growth in passenger numbers, which might not be accurate in real-world scenarios. Therefore, consulting with a financial professional before making any investment decisions is essential.
In conclusion, investing in airport terminal expansion can provide attractive returns over the long term, as evidenced by the investment model projections. However, it’s important to thoroughly research the investment and understand the risks involved. Working with a financial professional can help you make an informed decision based on your individual circumstances and goals.
We hope this guide has provided a helpful overview of the investment model for airport terminal expansion. If you have any questions or would like to learn more, please don’t hesitate to reach out to a financial professional. Additionally, it’s crucial to consider the potential impact of external factors on airport operations and revenue, such as changes in government regulations, shifts in the global economy, and unforeseen events like natural disasters or pandemics.
Furthermore, the projections provided in the investment model are based on a range of assumptions, and actual results may vary significantly from these projections. Therefore, it’s essential to conduct thorough due diligence before investing and to consider diversifying your portfolio to mitigate risk.
In summary, investing in airport terminal expansion is showing considerable returns over the long term, but it’s crucial to carefully consider the risks and seek professional advice before making any investment decisions. With the right research, planning, and guidance, investing in airport terminal expansion can be a rewarding addition to a diversified portfolio.
Lastly, it’s worth noting that investing in airport terminal expansion is just one of many investment opportunities available to investors. It’s important to consider your individual investment goals, risk tolerance, and overall financial situation before making any investment decisions.
Now, let’s address the questions regarding the lack of transparency and the contract duration. The absence of a written business plan or investment model raises questions about the transparency of the Beirut airport expansion project. Why haven’t the stakeholders shared a detailed plan with the public? What are the specific reasons behind this lack of transparency?
Moreover, another critical question arises: why was the contract set for 25 years rather than a shorter period, such as 10 years? A longer contract duration might lead to more significant long-term profits for investors, but it could also pose potential risks to the Lebanese people if the project faces unforeseen challenges or negative impacts on the country’s economy. It’s essential to thoroughly examine the reasoning behind this decision and explore the potential benefits and drawbacks of a 25-year contract versus a shorter one.
In conclusion, the Beirut airport expansion appears to be a profitable endeavor for the business, but there are important questions surrounding transparency and contract duration that need to be addressed. Greater transparency is necessary to ensure that the interests of the Lebanese people are considered alongside those of the investors. A thorough investigation and audit of the terminal operations should be conducted to ensure that all parties involved are held accountable for their actions.
It’s crucial to engage in open and honest dialogue about the project, addressing concerns and providing clear information about the decision-making process. This includes justifying the choice of a 25-year contract and discussing any potential advantages or disadvantages compared to a shorter contract duration.
By addressing these questions and fostering a culture of transparency, stakeholders can better understand the project’s implications and make informed decisions regarding the Beirut airport expansion. This approach will ultimately lead to a more sustainable and beneficial outcome for all parties involved, including the Lebanese people and the investors.
As the discussion surrounding the Beirut airport expansion continues, it’s essential for stakeholders to maintain an ongoing dialogue that addresses the concerns of all parties involved. This includes keeping the public informed about project developments, sharing updates on progress, and responding to any new concerns or challenges that may arise during the implementation of the expansion.
By maintaining open lines of communication and fostering a culture of transparency, the airport expansion project can ensure that the Lebanese people remain informed and engaged in the process. This will not only help to build trust between the public and the project stakeholders, but also create an environment where potential issues can be addressed in a timely and collaborative manner.
Moreover, it’s essential for those involved in the project to be held accountable for their actions, with regular audits and assessments of the terminal operations conducted by independent bodies. This will help to ensure that the expansion proceeds according to the agreed-upon plans and that any potential irregularities or inefficiencies are identified and addressed promptly.
In conclusion, the Beirut airport expansion has the potential to be a profitable endeavor for both investors and the Lebanese people. However, achieving this potential depends on addressing the questions surrounding transparency and contract duration, as well as fostering a culture of openness, dialogue, and accountability. By taking these steps, the expansion project can proceed in a manner that benefits all parties involved and contributes to the long-term growth and development of Lebanon’s aviation industry.
Furthermore, the project stakeholders should consider engaging with the local community and incorporating their input into the decision-making process. By doing so, they can ensure that the expansion takes into account the needs and concerns of those who will be directly affected by it. This approach not only helps build trust and goodwill, but also creates a more sustainable and successful project overall.
Additionally, while the investment model and projections indicate potential profitability, it’s crucial to remain vigilant about potential risks and challenges that may emerge throughout the project’s lifecycle. Regular assessments of the market conditions, changing global economic landscape, and other external factors should be conducted to ensure that the expansion remains on track and adjusts to any unforeseen circumstances.
Ultimately, investing in airport terminal expansion is a complex and long-term endeavor, requiring careful consideration of various factors and risks. By maintaining transparency, engaging in open dialogue, and ensuring accountability, stakeholders can make more informed decisions and work together to create a successful and sustainable airport expansion that benefits both investors and the Lebanese people.
