FLUG REVUE March 2004: Private Istanbul airport seeks expansion

ISTANBULS PRIVATE SABIHA GÖKCEN AIRPORT

By Dierk Wünsche

Anyone thinking of flying to Istanbul will no doubt expect to arrive at Kemal Atatürk International Airport, on the European side of the Bosporus. Only a few people know that since 8 April 2001 a second airport has been operational on the Asian side, Sabiha Gökcen International Airport (SAW).

Göckcen airport, Istanbul

It is the most modern airport in Turkey and is the result of investment to the tune of around $700 million. Some 45km from the European side of the Istanbul city centre and only 20km from the Asian city centre, it expects to relieve the load on its “big brother”, Atatürk Airport, which is bursting at the seams over the coming decades. It is not just thinking here in terms of chartered and freight business, but European and domestic Turkish services as well. Moreover, with its good transport connections, it hopes to stimulate the economy in the Oriental section of Istanbul and the surrounding region.

With both international and domestic terminals plus a cargo centre, it is well equipped to do this. In its own words, all the facilities and structures reflect the latest state-of-the-art in airport technology. The modern terminal architecture even won it the European Steel Construction Award. There is sufficient space available to accommodate all kinds of possible future building projects.

The airport is operated by a private company, Airport Management & Aeronautical Industries Inc. (HEAS). Altogether it has an area of 6.6km2 at its disposal. As far as security is concerned, the airport is in the top league. In the run-up to the Iraq War, the US Air Force had some aircraft parked here, and the airport even enjoys the accolade of being certified as fully meeting the stringent standards of the Israel Civil Aviation Authority. Thus, the site is surrounded by three security fences complete with watch towers. Within the terminals, Istanbul police officers and 137 concealed cameras (69 of which are moveable) monitor passengers and their activities.

Despite the perfect security, superior architecture and diversity of service offerings, however, what Sabiha Gökcen has been lacking since it was commissioned in April 2001 is the most important thing, namely airlines and passengers. Apart from pilgrim flights to Mecca and chartered flights from the Russian Federation and the CIS states, the light-flooded halls and giant apron have often lain gapingly empty this winter. The only European airlines which regularly head for this airport every week are Germanwings airlines and cargo carrier DHL. Germanwings offers a connection to Cologne and Stuttgart by Airbus A319, albeit during the hours of darkness.

The crisis in aviation triggered by the terrorist attacks of 11 September, the war in Afghanistan, the SARS virus and the Iraq War have not exactly helped Istanbul's new airport to a successful start over the last three years. Moreover, Sabiha Gökcen is an experiment in Turkish aviation: it is the first and only airport in the whole country to be entirely privately operated and offers every service on both land side and ramp side through to refuelling from a single supplier. Every one of the other 30 Turkish airports, which include nine international airports, is run by the state alone or is jointly managed with the military.

At present there are around 5,000 flight movements per year at Sabiha Gökcen International Airport, serving some 300,000 passengers. The airport operates around the clock without any slot restrictions. The runway used has a length of 3,000m, while a second runway of the same length, which runs parallel to the first, is currently used only as a taxiway. The airport can be approached under CAT II conditions, so that when Atatürk Airport is closed due to bad weather, it already sometimes functions as an alternate airport for scheduled airlines like Lufthansa.

Sabiha Gökcen's capacity is geared towards three million international passengers and 500,000 domestic passengers, along with 90,000 tonnes of cargo. By comparison, the total number of international passengers flying from and to Istanbul in the year 2000 was just under 9.6 million, with over 5 million domestic passengers.

“The future is looking very good!” In an interview with FLUG REVUE, Ibrahim Büyükyumukoglu, CEO of Sabiha Gökcen International Airports, was optimistic that business would shortly pick up at Istanbul's new airport. Under “normal” conditions, that is without any political crises, global air traffic is rising by around seven percent per year, he argues. In Turkey, it is actually rising by about twelve percent and more, compared with the general trend. However, because of the big aviation crisis air traffic in Turkey has dropped back to the level of 1992. But that should shortly change for the positive, he believes. He is not actually expecting scheduled airlines to use the new Sabiha Gökcen airport in the future, nor was this the intention in the direct environment of the Atatürk Airport hub, where the international and national traffic is largely in the hands of Turkish Airlines. “I see the role of Atatürk Airport as that of a colleague in the same business field,” says Büyükyumukoglu. “Our opportunities lie much more in the fact that capacity at Atatürk Airport is simply exhausted. Besides, we will grow strongly in the areas of low-cost connections and point-to-point routes. We are very well-equipped, and our services cost the airlines less than they do on the European side. In five to ten years we shall therefore perform the role of a second airport in Istanbul. In the league table of Turkish airports by passenger numbers, we will then be in fourth or fifth place, not far behind Izmir, Dalaman, Istanbul-Atatürk and Antalya.”

Recai Yilmaz, director of marketing at the airport, is also positive about the future despite the present underutilisation of the terminal halls. “We had a successful start last year with Germanwings. We expect further connections to become established. Germania, dba, Air Holland and Martinair have already flown flights to Sabiha Gökcen International Airport last summer. The only company to organise guest worker flights out of Germany was Öger Türk-Tur, which flew to Sabiha Gökcen and other airports with the charter carrier Freebird.”

From 20 February the Turkish charter airline Flyair, formerly Air Anatolia, will have a Boeing 737-400 stationed at the airport. It will fly daily round trips to Eindhoven, the Netherlands. This will be followed by round trips to Antalya and Trabzon. The national carrier Turkish Airlines is also planning eight daily domestic flights from Sabiha Gökcen for the summer 2004.

“The Turkish airlines Onur and SunExpress have also expressed interest in using our airport in the past, although as yet there are no concrete plans. On the other hand, a second German low-cost carrier, Germania Express, will be flying here with a Fokker 100 from April 2004. We are also in discussion with Snowflake, the low-cost subsidiary of SAS,” says Yilmaz. “I am convinced that an airline that stations a plane with us, flies daily flights to an attractive European airport and also offers domestic Turkish connections can make money.”

Yilmaz also has high hopes of the Irish airline, Ryanair: “We have had close and good contacts with Ryanair for some time. But so far no connections have got off the ground due to problems over traffic rights, as Ryanair wants to use Hahn airport in Germany as the departing airport. We have therefore suggested a structure similar to the one British Airways had with Deutsche BA in its time. Ryanair does not want to take that route, but I am sure we will find another solution before long. Besides, the next round of preliminary discussions on Turkey's entry to the EU is scheduled for May. We hope that this will make things easier for European airlines to fly to Turkish airports, as the Ryanair example suggests.

“One of the major advantages of our airport in my view is the fact that airlines are dealing with a single, privately owned contractual partner. For example, if they want to fly to Atatürk Airport, they have to negotiate with five different parties, some of them state-owned, to agree the terms. At Sabiha Gökcen Airport, everything is in our own hands, from ground handling, which, besides, is free of charge, to cleaning and fuel. We can negotiate a package with a prospective partner that will satisfy both sides. In 2003 we actually broke even, and in 2004 we are expecting to make a profit,” says marketing director Yilmaz.

Yilmaz believes that one future strength of Sabiha Gökcen will be in the cargo sector. The cargo centre, he points out, is the most modern in Turkey. It has a ramp area of over 63,200m2, with space for between five and eight cargo planes. Up to 90,000 tonnes of airfreight could be processed in a closed area of 8,000m2. This is equipped with two import warehouses fitted with computer-controlled high-bay storage systems and an export warehouse. The 18 integrated cold stores and cold rooms, with temperatures of between 5ºC and -25ºC, are based on the latest technology. The extensive security facilities include a closed circuit camera system and an x-ray machine which can penetrate steel up to 6.5cm thick. Other features which Yilmaz believes will make the airport attractive to freight customers are the good transport connections to the E-6 and E-5 express roads which lead to the various central districts of Istanbul and the industrial centres of the Marmara region, Izmir, Adapazari and Bursa, the proximity of the railway and the fact that the seaport of Pendik is only four kilometres away.

Sabiha Gökcen International Airport should be viewed as the first part of the “Advanced Technological Industry Park” (ATIP) technology park. This is a development project to the tune of $16 billion of investment. The underlying vision is to create a kind of Silicon Valley for Turkey in an area of 3.6km2. This will comprise airport, university, leisure facilities of every kind, hotels and numerous high-tech companies.

Investors from all over the world are to be approached with this idea. The ATIP project is intended to fundamentally help Turkey to become a player on the international market in the areas of aerospace, electronics and military technology. Another important project in this framework, which involves collaboration with Turkish Airlines, is already in the advanced execution phase. Thus, within a period of two years an aircraft repair and maintenance centre is to be built on the airport grounds for the sum of $250 million. The operators are hoping that this project will result in the third largest maintenance facility in Europe and the Middle East. This should enable maintenance and repair work to be carried out on all aircraft types, from the business jet through to the Boeing 747.

The construction of a Formula One racing track also holds out much promise to Sabiha Gökcen International Airport, as it is bound to bring with it an increase in passenger numbers. Formula One races are currently held in 17 different countries. With a race in Turkey, the Grand Prix circuit will gain an additional highlight. The racetrack is to be built in the Tuzla Tepeören region, a location that is only 8km away from Sabiha Gökcen airport. It is expected to attract over 60,000 visitors. The date for the first Formula One race has already been set: on 1 April 2005 Schumacher & co. will be lining up at the start line. But it is not just Formula One racing cars that will be roaring by in Tuzla Tepeören. Other races are planned throughout the year. All these sporting activities are expected to bring a significant boost to both chartered and General Aviation business. The Holiday Inn hotel chain has recognised this market opportunity, and is planning to build a Sabiha Gökcen airport hotel before long. When one considers all these factors, Sabiha Gökcen is in an excellent position to undergo serious growth. Bearing in mind the expected capacity bottlenecks at Atatürk Airport, the demands of the no-frills airlines for low-cost alternatives to the hubs and the expansion projects in the Asian region of Istanbul, the optimism regarding passengers and profit at Sabiha Gökcen Airport would appear quite justified, provided that there is no new political crisis in the region. Many a project before now has come to fruition only after the exercise of much patience and persistence.

From page 76 of FLUG REVUE 3/2004

Last updated 12 February 2004

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