Germany-based AviAlliance has announced plans to invest £350 million “in the future growth and decarbonisation” of AGS Airports over the course of the next five years following its recent acquisition of the group which comprises Aberdeen, Glasgow and Southampton airports.
Included in the investment will be a “comprehensive transformation” of Glasgow Airport’s main terminal.
AviAlliance completed the acquisition of AGS Airports from Ferrovial and Macquarie in January for an enterprise value of £1.53 billion and it has now outlined details of what it said “will be the single largest capital investment programme in AGS since it was formed in 2014.”
AviAlliance is a wholly owned subsidiary of Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension investors with $264.9 billion of net assets under management.
PSP Investments is a long-standing investor in UK infrastructure, holding majority stakes in Forth Ports, one of the UK’s largest port groups, and Angel Trains, the largest rolling stock company in the UK.
Last month, New York-based Blackstone announced that its infrastructure strategy for individual investors agreed to acquire a minority stake of 22% in AGS Airports from AviAlliance for £235 million.
Alongside its investment plans, AviAlliance confirmed the appointment of Charles Hammond as the new chair of AGS. Hammond stepped down as CEO of Forth Ports in 2024 after holding the position for 23 years.
“Aligned to the anticipated passenger growth expectations, the £350 million investment will help facilitate the accelerated growth of AGS which supports more than 30,000 jobs and generates in excess of £2 billion in Gross Value Added (GVA) for the UK economy every year,” said AviAlliance.
“Included within the investment will be a comprehensive transformation of Glasgow Airport’s main terminal building delivering best in class operational and retail facilities for passengers.
“The programme will also direct investment into airfield infrastructure and energy efficiency initiatives. Not only will this significantly enhance the passenger experience, it will also ensure the airport is equipped to meet the growing and future demand from both customers and airline partners.
“Southampton Airport, which completed its 164-metre runway extension in 2023, will undergo redevelopment works within its terminal while Aberdeen Airport, which is Europe’s largest heliport, will see similar investment in its airfield infrastructure.
“Importantly, the £350 million will accelerate AGS’ sustainability agenda including its commitment to achieving net zero for its direct emissions by the mid-2030s.
“Importantly, the programme aligns with the core objective of the UK Government’s industrial strategy which aims to realise the full potential of the UK’s cities and regions by attracting investment. It also supports the Scottish Government’s ambition set out within its international strategy, of developing the connectivity and the quality of offering to ensure Scotland’s global competitiveness.”
AGS Airports CEO Kam Jandu said: “AGS plays a critical role in driving economic and social prosperity across Scotland and the UK. We have ambitious plans for the long-term, sustainable growth of our airports including the strengthening of our connectivity which underpins the success of the regions we serve.
“This significant investment will not only enhance the fabric of our airports, it will enhance the role they currently play in facilitating trade and tourism, and, importantly in generating meaningful employment across the country.
“We are also delighted to welcome Charles on board as our new chair. He is joining at what is a very exciting time for AGS and his unrivalled experience will prove invaluable as we work to unlock the next chapter in the group’s growth.”
AviAlliance MD Gerhard Schroeder said: “AviAlliance takes a long-term view across all the airports within our portfolio and this investment will assist AGS in accelerating its plans for delivering a superior passenger experience and growing connectivity. We are looking forward to working with AGS’ regional and national partners over the coming years to realise the full and undoubted potential of Aberdeen, Glasgow and Southampton airports.”
Hammond said: “It is an absolute privilege to have been appointed chair of AGS. I know Aberdeen, Glasgow and Southampton airports very well and I am also well aware of the critical role they play as drivers of regional economic growth across the UK.
“With the £350 million investment from our new shareholders now confirmed, I am relishing the opportunity of working with the AGS board, Kam and his executive team, to ensure AGS can play an even greater role in supporting our regions to boost trade and tourism.”
Deputy First Minister of Scotland Kate Forbes said: “This significant investment in Scotland by AGS will bring incredible benefits through improved infrastructure at both Glasgow and Aberdeen airports, and to our wider economy.
“Good international connectivity is key to economic growth in Scotland. It enables flow of trade, investment, labour and tourism, which will contribute to our prosperity. Additionally, the commitment to sustainability is welcome as we progress towards a net zero future.”