Jan. 3 (Bloomberg) -- Changi Airports International Pte, the overseas investment unit of Singapore's main airport operator, plans to buy stakes in as many as 15 airfields, about half in China, Chief Executive Officer Chow Kok Fong said.

The company aims to manage $700 million of airport assets in the next three years, Chow, 55, said in an interview in Singapore yesterday. Overseas revenue may climb to as much as 20 percent of sales in five years from less than 5 percent now.

Chow wants to tap growth in the Middle East, China and India, where governments are upgrading airports as rising incomes enable more people to fly. Global passenger air traffic may jump 29 percent by 2011, threatening to overwhelm airports, according to an October forecast by the International Air Transport Association.

``Travel numbers are going to keep growing,'' said Michael Birch, who oversees about $140 million at Wallace Funds Management in Sydney. ``In countries where there is only one airport, it makes sense to buy such assets because it's a monopoly.''

Changi Airports was set up as Changi Airport Managers and Partners (Singapore) Pte in 2004 by the Civil Aviation Authority of Singapore, and renamed two years later.

The company secured its first direct investment in China last month, acquiring a 29 percent stake in Nanjing Lukou International Airport for $138 million.

Targeting China

Funding for future purchases will mainly come from its parent, Chow said. The Civil Aviation Authority had net income of S$415 million ($289 million) for the year ended March 2007, compared with S$448 million the year before.

``We are looking at several deals, which we hope will crystallize over the next three years,'' Chow said. ``A lot of the growth that we expect in China will come from the central and western region. So, we will be spending a lot of our efforts in that region.''

Airports are benefiting from deregulation and a surge in travel as budget airlines lure more tourists.

The sheikdom of Dubai, in the United Arab Emirates, has earmarked $82 billion to create a transport hub for the Persian Gulf. India is selling stakes in its biggest airfields to help pay for $10 billion in investments over seven years to support travel growth in the world's second-most populous country.

Changi Airports shifted its focus in 2006 to investing overseas, as opposed to just offering consulting and advisory services. The company may consider setting up a trust for its assets, Chow said.

Singapore Investments

State-controlled Singapore companies including Temasek Holdings Pte and Singapore Telecommunications Ltd. have increased their overseas investments in recent years to boost returns and reduce their reliance on the city state.

Set up in 1974 to run Singapore's state assets, Temasek also has stakes in ICICI Bank Ltd. of India, Bank of China Ltd. and Standard Chartered Plc.

In China, Changi Airports is seeking stakes outside of the main airports in Beijing, Shanghai, Guangzhou and Shenzhen.

``There are about 20 other airports which are trying to get a slice of the international traffic,'' Chow said.

China plans to boost its number of airports to 220 by 2020 from 147 in 2006, according to the General Administration of Civil Aviation. The country's outbound journeys, which have almost tripled over the past five years, may triple again to 100 million by 2015, the World Tourism Organization estimates.

Changi Airports also has a venture with Shenzhen Airport Group Co. to invest in and manage smaller airports.

Opportunities In India

Changi Airports, which in 2005 pulled out of a race for a stake in India's New Delhi airport, has teamed up with the Tata Group to bid for other projects in the South Asian nation.

``We are looking, together with Tata, at some of the equivalent of secondary airports in India,'' Chow said. ``One of the airports that has been announced for privatization is Amritsar. That's one airport we're looking at.''

Other key markets included Vietnam, where the company has signed a preliminary agreement to develop the Phu Bai airport in Hue province, and Russia.

``We're concentrating on Russia and we have taken a look at one or two airports in Europe,'' Chow said. ``We have not made a firm decision but clearly one of the biggest privatizations in the market is Prague.''

Changi Airports faces competition for assets from companies including Fraport AG and Australia's Macquarie Group Ltd.

Fraport, owner of Frankfurt airport, bought a stake in China's Xian airport last year and raised its holding in the operating company of Lima airport in Peru. It runs two terminals at Antalya, Turkey, and has a contract to operate all three of its terminals by September 2009. It has also invested in India.

Macquarie, the world's largest private manager of infrastructure such as airports and toll roads, in December led investors to buy Hobart International Airport Pty in the Australian state of Tasmania.

The Civil Aviation Authority runs Singapore's main airport, which is called Changi. The airport, Asia's fifth-busiest and winner of more than 250 awards, will open a third terminal next week, allowing it to handle 50 percent more passengers.

To contact the reporter on this story: Chan Sue Ling in Singapore slchan@bloomberg.net

Last Updated: January 3, 2008 00:51 EST