Incheon Airport secured $407M won abroad, but nearly two in three projects lost money

Incheon International Airport [INCHEON INTERNATIONAL AIRPORT CORPORATION]

Incheon International Airport Corporation (IIAC) has landed more than 550 billion won ($387 million) in overseas projects over the past 15 years, but nearly two out of three cases have recorded losses.
 
Out of 37 overseas projects undertaken since 2009, 23 projects — or 61 percent — ended in deficit, according to data submitted to the National Assembly, leaving the state-run operator with only 10.2 billion in cumulative profit. The overall profit rate stood at around 3 percent.

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The data obtained by Rep. Yeom Tae-young of the Democratic Party shows that the operator carried out 37 projects in 17 countries between 2009 and 2024.
 
The company initially focused on consulting contracts related to airport construction in the Middle East, Russia, Indonesia and the Philippines, but has expanded into entrusted operations and investment development since the 2020s. The overseas contracts in total amount to $406.9 million.
 
IIAC's first overseas contract was a 2009 operational support project at Erbil International Airport in Iraq, and major contracts include operation of Terminal 4 at Kuwait International Airport and the investment and development of Hang Nadim International Airport in Batam, Indonesia.
 
Major consulting and investment development projects, however, have seen significant losses. The consulting project at Jakarta Soekarno-Hatta International Airport in Indonesia, carried out from 2013 to 2015, recorded the worst performance, incurring a 76 percent loss, effectively wiping out more than three-quarters of the capital invested.
 
Although the project generated approximately 870 million won in revenue from construction management consulting for airport expansion, local and headquarters personnel costs and related expenses are believed to have pushed the actual return into the red.
 
Other major deficits include ICT consulting for the new Siem Reap Airport in Cambodia, which saw a 56 percent deficit, and technical support for Imam Khomeini International Airport in Iran, which suffered a 47 percent loss.
 
Current investment and development projects are not faring better. The development and operation project at Ninoy Aquino International Airport in Manila, Philippines, which IIAC touted as a major win early last year, is operating at a 164 percent loss. The Hang Nadim Airport investment project is also reporting a 46 percent deficit.
 
Over the past 15 years, IIAC earned 302.5 billion won in overseas revenue, but after accounting for 290.3 billion won in investment costs and 1.9 billion won in equity method losses, only 10.2 billion won in operating profit remained. The cumulative profit margin stands at 3.4 percent.
 
Concerns are mounting that losses may deepen once the contract to operate Terminal 4 at Kuwait International Airport — which currently accounts for 90 percent of IIAC's overseas revenue — expires next year.
 
Despite weak overseas project returns, IIAC expanded its overseas business-related departments in February, increasing from one to two and nearly doubling staff.
 
"IIAC heavily promotes its overseas project wins, but a significant number are running deficits, with total returns capped at 3 percent over 15 years," Rep. Yeom said. "Rather than adding personnel to loss-making overseas projects, the company should come up with a measure to improve profitability."
 
IIAC in response noted in its data submission that "overseas operating margins averaged a 0.6 percent annual loss during the early years (2009–2017) but improved to an annual average of 4.1 percent from 2018 onward through large-scale long-term contracts," adding that "current investment development projects are set to run until the 2040s, suggesting profitability may strengthen over time."


This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY BAEK MIN-JEONG [woo.jiwon@joongang.co.kr]