A Dedicated Operational Capability

Operational value creation is central to GIP’s approach to investing.

GIP has a dedicated team that seeks to apply a best-in-class industrial toolkit to improve the performance of our portfolio companies.  GIP’s Business Improvement Team consists of 38 professionals who have, on average, 30 years of industry experience. These individuals bring a wealth of knowledge, hands-on expertise and industrial best practices to GIP’s portfolio companies, helping to drive operational improvements.

GIP’s operational value creation is focused on several key areas in which GIP’s Business Improvement Team has been successful in driving substantial improvements that have significantly enhanced both the financial performance and overall value of the portfolio companies. One of our key objectives is to embed improvements in portfolio companies that will endure long after our ownership ends. This is accomplished through the training and development of people throughout the organization. By focusing on the application of best practice operations and processes, we seek to build sustainable management processes.

GIP’s Business Improvement Team focuses on value creation at multiple levels, including:

  • Customer Service
  • Growth
  • Efficiency
  • Cash Management

These operations specialists use tools and best practices, such as:

  • Cycle time reduction
  • Service span improvement
  • Capacity de-bottlenecking
  • Kaizen
  • Six Sigma

The application of these proven management techniques can improve efficiency, performance, customer satisfaction and revenues. Additionally, this focus on operational improvements offers better protection of the assets and cash generation in economic downturns.

Case Study: Edinburgh Airport

Edinburgh Airport Limited (“Edinburgh”) is Scotland’s business airport, serving 14.7 million passengers in 2019. 

In 2012, Global Infrastructure Partners II (“GIP II”) acquired Edinburgh at what we believe was a favorable valuation multiple. GIP leveraged its experience in transforming airports, execution and delivery of business plans and relationships with key stakeholders, to acquire Edinburgh and help to transform it into one of the leading airports in the United Kingdom.

Edinburgh is over 100 years old, having started as a military airbase and then transferred into private ownership.  GIP II was able to identify and execute on the latent opportunities to create value across multiple commercial and operational activities.

Through GIP II’s ownership, Edinburgh has been transformed with the help of GIP’s Business Improvement team who have worked alongside airport management to grow traffic, connectivity and consumer choice while enhancing the infrastructure and service offering at the airport. Examples of these improvements include:

  • Added 400,000 spaces while revitalizing the business model to increase sell-through channels and increase online bookings by almost 90% since acquisition through 2018
  • Created a new Digital team & utilize dynamic pricing algorithms and digitization tools
  • Car parking revenue growth of 9.8% CAGR (2014 – 2018)
Security and Check-in Transformation
  • Introduced new technology and processes to allow self-service check in and reduced the check-in time from 30 minutes to 3 minutes (10x faster), increasing customer satisfaction and enabling longer dwell time for passengers in retail outlets
  • Developed new security process (Gen II) which generated higher throughputs, reduced waiting times and more efficient use of labor and floor space. This created a 3x increase in passenger throughput and improved service with 95% of passengers waiting for less than 10 minutes
Retail Transformation
  • Integrated delivery of capital projects to capture retail benefits alongside operational capacity, which has optimized build projects and enabled strong returns on investments
  • Retail growth of 74% to 61 units and over 4600m2 of retail space
  • Retail revenue growth of 11% CAGR (2014-2018)
Air Field
  • Edinburgh Airport is a 24/7 operation with no operational restrictions, and its airfield has seen growth in air traffic movements to over 131,000 take off & landings per year, resulting from an increase in market share
  • Airfield infrastructure development to provide capacity as a 20 million passenger airport with the addition of new aircraft parking stands

During GIP II’s ownership, Edinburgh has been recognized as a leading business in Scotland that contributes over £1 billion Gross Value Added and supports over 25,000 jobs.  Additionally, the investment has not only benefitted GIP II’s investors via attractive returns, but also Edinburgh’s passengers through better service and the community through the company’s philanthropic programs. 

  • This case study should not be relied upon as being indicative of future results.  This case study is a select investment made by GIP and is being shown as an illustration of the management techniques that GIP implements across its portfolios and was not selected based on performance.  Please see https://www.global-infra.com/portfolio/ for GIP’s full portfolio of investments.  The performance of any other investment made by GIP may vary materially from this case study, and there is no guarantee that similar investments will be made by GIP.