Dominican airport management company wants to sell
A key investor in an airport management company that operates five international airports in the Dominican Republic is in negotiations to sell its stake in the management contract for those facilities, according to news reports.
Dominican newspapers Diario Libre and Dominican Today said the Hazoury Group, a major Dominican company that owns the massive, $500 million Cap Cana tourist project under development in Punta Cana, wants to sell its share of the airport management operations to finance its real estate developments and its concession for an oil pipeline in Panama. Punta Cana has been widely publicized in the United States and is considered to be at the forefront of the emerging luxury tourism market in the Dominican Republic, which caters to golfers with high-end courses, including two designed by Jack Nicklaus.
The Hazoury Group is seeking to sell its share of the airport management company Aerodom, also known as Dominican Airports Century 21, according to the reports.
Aerodom landed a 20-year contract to manage the five airports in 1999, and in 2002 the contract was extended by another five years. The contract covers management for Las Americas and La Isabela airports serving Santo Domingo; Gregorio Luper'n, airport in Puerto Plata; Arroyo Barril airport in Saman'; and Maria Montez airport in Barahona.
The Diario Libre report noted the airport management contract appeared to be lucrative when it was awarded in 1999, but since that time the airports serving U.S., Caribbean, and European tourists have become extremely competitive. Cibao Aiport, which serves the Dominican Republic's second-largest city, Santiago, has taken market share away from the Puerto Plata airport.
La Romana International Airport, which is located on the southeastern coast in the city of the same name, was opened in 2000 to serve the resort of Casa de Campo. It has taken business that previously would have gone to Las Americas airport.
As the airport competition has heated up, profit margins have become thinner, making the investments in airport management companies less attractive. Meanwhile, the market for luxury resorts is strong. Some of the money from the sale of the airport management contract would be used to build villas at Cap Cana that have already been sold, both newspapers reported.
Diario Libre said prospective investors reportedly involved in negotiations for the airport management contract include the Airport Service of Canada, an unnamed U.S.-company, and Arab investors.