Business

Monday November 2, 2009

Malaysia Airports looks overseas

By YEOW POOI LING


Airport operator eager for more jobs after Turkey venture

ISTANBUL: The Istanbul Sabiha Gokcen International Airport (ISGIA) is expected to continue growing significantly in passenger arrivals, thanks to rising demand for low-fare flights and the country’s booming tourism industry.

In anticipation of rapid growth, the Turkish authority has allocated some 100 million euros to build a second runway at the ISGIA, said Istanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim, Yapim Ve Isletme A.S. (ISG) chief executive officer Gokhan Bugday.

The new runway is expected to be completed by 2012.

ISG, which holds the operation rights of the airport for 20 years, is a joint venture between Malaysia Airports Holdings Bhd (MAHB), GMR Infrastructure Ltd of India and Turkish company Limak Insaat ve San Tic AS on a 20:40:40 basis.

From left: Nihat Ozdemir, GM Rao and Tan Sri Aris Othman having a light moment at the launch of the Istanbul Sabiha Gokcen International Airport’s new terminal.

According to Bugday, the airport is expected to grow 50% next year from this year’s estimated passenger arrivals of 6.1 million.

“Turkey is an important point in this region. The Ataturk Airport is already constrained, so the growth will come from ISGIA, where passenger arrivals is expected reach 10 million by 2010,” he said at a briefing in conjunction with the launch of ISGIA’s new terminal on Oct 31.

ISGIA is an economic airport, offering 25% discounts on landing and parking fees to low-cost airlines. The cost of the new terminal as well as the car park and hotels is about 500 million euros.

Bugday said Turkey was “the bridge between Asia and Europe,” and therefore, did not see any significant impact on its aviation sector from the global economic downturn.

The country’s aim was to become the transit hub between Asia and Europe, like Amsterdam, he added.

According to Limak chairman Nihat Ozdemir, the Turkish government is already mulling the idea of setting up a third airport in Istanbul due to the strong growth in passenger arrivals.

The proposal was still preliminary but if the conditions were attractive, the consortium of Limak-GMR-MAHB would consider it, he said.

GMR chairman GM Rao said the ISGIA had the advantage of having existing traffic volume, which unlike greenfield airports would have to build demand from zero.

The airport charges a service fee of three euros per passenger for domestic routes and 12 euros for international destinations.

It also offers services like refuelling, cargo warehousing and ground-handling to airlines.

Bugday said the payback period for the investment, including construction and future rentals, was seven to eight years.

This is the second collaboration between MAHB and GMR, after their involvement in the Hyderabad International Airport and Delhi International Airport projects in India.

MAHB chairman Tan Sri Aris Othman said airport development involved building capacity ahead of time to cater for future growth, and was not merely to meet existing demand.

Turkey, with its rapidly growing economy, offered a good opportunity for the airport operator to widen its presence overseas, he said.

He added that there were eight MAHB personnel involved in the operational readiness and airport transfer exercise of the ISGIA, which commenced six months ago.

“Our airport consultancy arm, Malaysia Airports Consultancy Services, is continuously exploring other overseas opportunities to further expand our expertise and knowledge in airport management,” Aris said.

GMR is India’s leading infrastructure company with a market value of more than US$7bil, specialising in infrastructure development, energy, roads and airport projects.

Limak, meanwhile, is a huge Turkish conglomerate involved in a wide range of sectors like construction, energy, tourism, cement, food and aviation.

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