Yangyang, Muan Int’l Airports Likely to Go Private

International airports in Yangyang County, Gangwon Province and Muan County, South Jeolla Province, are leading candidates for privatization for being the least profitable among 14 airports nationwide.

The government last year announced a plan to sell the right to run one or two provincial airports to upgrade state-run enterprises.

The Land, Transport and Maritime Affairs Ministry decided to make its final pick next week after holding a public hearing yesterday on the selection criteria to upgrade Korea’s airports.

Points for management efficiency including cost reduction and potential for profit growth take up half of the score sheet on a scale of 100, thus Yangyang and Muan airports are considered the least profitable.

Nonetheless, they could be crossed off the privatization list for political concerns since candidates can receive as much as 20 points for their contribution to national policies.

According to the public hearing materials, Yangyang airport scored the lowest airside profitability of one percent among the 14 airports in 2007. Airside refers to the moving area of aircraft including runway, taxiway and apron, and landing fees commonly account for more than half of an airport’s profits.

Yangyang airport earned 40 million won (28,000 dollars) from an investment of 2.7 billion won (1.9 million dollars) in 2007. Muan airport had an airside profitability of a mere two percent, making a profit of 30 million won (21,000 dollars) out of an investment of 1.6 billion won (1.1 million dollars).

International airports in Gimhae (84 percent), Jeju Island (67 percent) and Gimpo (64 percent) ranked in the top three for airside profitability. They also showed the highest landside profitability, with Gimhae leading with 226 percent followed by Jeju (185 percent) and Gimpo (168 percent).

sys1201@donga.com