Incheon airport to swap 10% stake with foreign airport

Incheon International Airport Corp. plans to sign a deal to swap 10 percent of its own shares with a foreign airport.

In an interview with a local daily, CEO Lee Chae-wook said the company will sell a 10-percent stake in Incheon airport to an unidentified foreign airport in return for the same amount of shares in the latter.

Lee said the company will also dispose of up to a 20 percent stake at discounted prices to the public.

“In order to move Incheon airport to the next level, we need to introduce a more advanced management technique from the private sector through its privatization,” the CEO said.

In early August, the ruling Grand National Party (GNP) Chairman Hong Joon-pyo brought up the idea of selling a 49 percent stake to the public, particularly low-income earners, about 30 percent lower than the market price. The government later said it will consider selling a 15 percent stake as the so-called “citizen shares,” not 49 percent.

In March 2010, the GNP initiated a revised bill governing the operation and management of the airport. It called for the sale of up to 49 percent of the government’s holdings to private investors, with foreign investors barred from securing more than a combined 30 percent.

Lee said even though Incheon airport has ranked top in service quality for the past six years, it has not yet reached the world’s top class in other areas.

“We need to raise money to expand our infrastructures and bring in a more advanced operational system. We should also make our management more transparent. To do all these, we have no other choice but to sell stakes in the airport,” he said.

But opposition parties and civic groups stand steadfast against the privatization of Incheon airport, stressing that the airport should remain 100-percent state-owned. They argued that if the airport is privatized, it will become more expensive for the public to use as its monopolistic position will result in higher fees and other costs.