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BUSINESS > Airport opeator TAV sets sail for overseas

ISTANBUL - Reuters

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TAV holds the operational rights of Istanbul Atatürk Airport until 2021, but it says it has been looking for alternative airports as it lost the bidding for the third airport. DHA photo

TAV holds the operational rights of Istanbul Atatürk Airport until 2021, but it says it has been looking for alternative airports as it lost the bidding for the third airport. DHA photo

Leading Turkish airport developer and operator TAV is considering five airport tenders abroad as it seeks to compensate for the earnings it will lose in 2021 when its contract for Istanbul Atatürk Airport terminates.

“We are interested in three airport tenders in Latin America, LaGuardia Airport in New York in the U.S. and one in Southeast Asia,” TAV CEO Sani Şener said during the ACI Europe-ACI World Congress held on June 11 in Istanbul. The preliminary qualification process had not yet been completed, he added.

“Atatürk Airport makes 50 percent of TAV’s earnings before interest taxes, depreciation and amortization [EBITDA]. But we can compensate ebitda loss, which will occur after 2021, in seven or eight years,” he said.

Şener said they and ADP, the French airport operator Aéroports de Paris, which acquired 38 percent of TAV last year, had plans to buy or operate airports.

“We will absolutely buy an airport,” he said.

However, Şener said they would participate in airport privatizations in Saudi Arabia, adding that a joint venture between TAV and the local Al-Arrab Contracting Company had received official approval for a contract to design and build a new terminal at an estimated cost of $400 million in May.

Gezi Park has weak negative effect

Şener also said the Gezi Park protests, which began in Istanbul and have spread around the country, might slow down the passenger growth of the company in June, while adding that they did not expect a serious negative impact. “There has been a limited fall due to a cancelation of a congress in the last 11 days,” he said.

Meanwhile, Şener said they had withdrawn from Istanbul’s third airport tender because it required capital they did not possess. “The world’s largest funds have investments in TAV. We have to evaluate their money in the most appropriate fashion. After making a 10 billion-euro investment, we can not pay 1 billion euros in rent a year,” he said.

The Cengiz-Kolin-Limak-Mapa-Kalyon Consortium, a joint venture of Turkish companies, won a tender for the third airport on May 3, promising to pay the state 22.1 billion euros (plus taxes) for 25 years starting from 2017. Şener said, DHMİ, which will earn 1 billion euros rent income a year when the third airport will come to operation before 2021, will be able to response TAV’s contractual rights.

June/13/2013

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