Antalya to reach 80mppa capacity: tourism, connectivity, ESG & DEI in concrete mixer – part one
When considering tourism in Türkiye, which is the world's fourth most visited country, one tends to think of the magnet that is Istanbul. But many of its coastal resorts, especially on the west and south coasts, have drawn increasing numbers of tourists over the past three decades - and many of them away from the Spanish resorts.
Antalya Airport is the main gateway to many of these Turkish resorts and is the third busiest airport in the country.
Now managed under concession by two of the leading lights in airport operations, Fraport and TAV (with that concession recently extended for another 25 years), the airport has embarked on an ambitious renovation and enhancement programme that will cater ultimately for 80 million passengers a year.
That is a very high figure to aim for when growth is expected to come mainly from tourists, and no one can say for sure that they will become an extinct species by the time the expansion works are complete. With that in mind, it is perhaps not surprising that two key lenders, European and Asian development banks, have included exacting environmental and governance clauses in their loan agreements - a portent for the future.
This is part one of a two-part report.
- Antalya Airport in Türkiye is undergoing a renovation and enhancement program to cater to 80 million passengers per year.
- The airport has experienced erratic traffic growth in the past, influenced mainly by tourism.
- Antalya Airport recorded a rapid post-pandemic passenger recovery, surpassing European standards.
- The airport is owned by Fraport and TAV, with the concession recently extended until 2052.
- The renovation project includes the extension of terminals, construction of parking facilities, heliport, and fuel supply facilities.
- The expansion project has received loans from European and Asian development banks, with strict environmental and governance clauses.
Summary
- Construction work at Antalya Airport on its first phase of renovation is 50% complete.
- Ultimately, capacity will expand to 80mppa.
- Traffic growth has been erratic in the past, on account of political and economic factors.
- Passenger traffic recovered from the COVID-19 pandemic very quickly in 2022, giving Antalya a competitive advantage internationally.
- The ownership position (concession) has changed and is now in the hands of two powerful players on the world stage, through to 2052.
A comprehensive and all-embracing platform of construction
Construction work at Antalya Airport in Türkiye - on a renovation project that comprehensively includes the extension of domestic, international, general aviation, CIP and VIP terminals and the construction of a multi-storey parking facility, a heliport, an additional apron, fuel supply facilities and a headquarters building - is 50% complete, according to the airport's DHMI Antalya Airport chief director Durdali Şavkar.
The first phase is scheduled for completion in 2025, and subsequent ones in 2029 and 2039.
Capacity of 35mppa going up to 80mppa - an ambitious objective
He said that investments were important for renovation works at Antalya Airport, as "our capacity is 35 million passengers and it will increase to 80 million after new investments". Antalya Airport has handled approximately 25 million passengers since the beginning of 2023.
The target of 80mppa is an ambitious one for any regional airport, anywhere, even if it is earmarked for a date well into the future. Especially when much of the forecast traffic increases are expected to come from tourism.
It is a lot more than Istanbul Airport, one of the busiest in Europe, has achieved since it opened in 2018, and Antalya is clearly building for a long term future, in which tourism will play a major role.
Antalya Airport location, Türkiye
Erratic traffic growth in the past
Since 2017 Antalya has been the third busiest airport in Türkiye after Istanbul and Istanbul Sabiha Gökçen airports.
Its passenger growth - influenced mainly by tourism (it is the country's eighth largest city with a population around one million) - even before the COVID-19 pandemic was wildly erratic. Part of the problem stemmed from Türkiye's occasional political crises, the most recent having been in 2016.
In 2019 it recorded its highest ever passenger numbers statistic.
Antalya Airport: annual traffic, passenger numbers/growth, 2009-2023
Rapid post-pandemic passenger recovery
The passenger recovery that took place in 2021 (+127%) was quite spectacular by European standards, almost twice the rate of passenger loss in the previous year (the first of the COVID-19 pandemic).
It was more than double the rate of increase recorded at national airports as a whole, and at many competing tourism supporting airports in Spain, thus setting up a competitive advantage for the future and demonstrating the benefits of being 'first mover'; albeit inadvertently, as travel restrictions were relaxed more rapidly than elsewhere to support domestic travel needs.
If it continues, the 18% growth recorded in the period Jan-Aug-2023 over the same period in 2022 until the end of the year it could exceed the 2019 figure by up to one million passengers.
Ownership position has changed but is settled now, with two powerful operators/investors at the helm
Antalya airport is part-owned by Germany's Fraport and Türkiye's TAV, which itself is part-owned by Groupe ADP.
Since the old Istanbul Atatürk Airport was closed to commercial traffic when the new Istanbul airport opened, it is safe to say it has become one of TAV's most significant assets.
Antalya Airport: ownership as at 18-Sep-2023
The ownership position has been a complicated one.
In Apr-2007 a consortium of Fraport and IC İçtaş Holding secured the tender to operate all three airport terminals in Antalya with a total concession, for EUR2.37 billion. At that time the airport handled fewer than five million passengers a year, but Fraport had already decided it was "in it for the long term".
The concession for operating all three terminals ran until the year 2024: 17 years for International Terminal 1 / Domestic Terminal, and 15 years for International Terminal 2.
The General Directorate of State Airports Authority of Türkiye (DHMI) remained the owner and operator of the airside assets and facilities, with passenger terminals operated on a BOT concession by Fraport and ICF.
Fraport has had an interest since the early 2000s
Before that, Fraport had an interest in Antalya; but just as it had a serious problem at Manila Ninoy Aquino Airport around the same time when the project to build a new terminal there that was almost finished was junked by the government, it was not always trouble-free.
Its traffic plunged after a second terminal was opened at the Antalya airport in Apr-2005, one that it had not been consulted on, and that took the majority of the passengers. The dispute was resolved with the Turkish airport authority only a year later.
In Feb-2018 TAV Airports signed an agreement to buy IC İçtaş's shares at Antalya Airport for EUR360 million and secured the deal in May-2018 by way of a loan.
Concession extended twice since 2021; now extends to 2052
In Feb-2021, in the midst of the pandemic, the Turkish government decided to extend the current concession for managing Antalya Airport by two years, to the end of 2026, and to defer payment of the annual concession fee for 2022 through to 2024 (three years).
Since then the joint venture has been awarded a further 25-year concession to operate Antalya Airport, starting from 2027.
That saving on the concession fee payments will go some way towards the level of investment here, which according to the CAPA - Centre for Aviation Airport Construction Database, amounts to USD153 million through to the end of 2025 in the first phase, with two further phases to follow. The Database entry is copied here (refer to the 'Nov-2022' entry):
Antalya Airport: database extract - Network/Performance/Fleet/Sustainability
In this case, and unusually, in Mar-2023 two separate investment banks agreed loans to support the expansion.