PPP in Airport Business
&
TAV Experience
Mr. Murat Örnekol - Chief Operations Officer PPP in Airport Business
• Public Private Partnership (PPP), is a work model that is based on a contract or concession agreement between a government or statutory entity on one side and a private sector company on the other side, for delivering an infrastructure service on payment of user charges.
• Its goal is to combine the BEST CAPABILITIES of the public and private sectors for MUTUAL BENEFIT.
• Used for BUILDING of new and/or upgrade existing PUBLIC FACILITIES.
• The private sector assumes a greater role in the planning, financing, design, construction, operation and maintenance of these facilities whereas the govermental body assumes the guarantee for the revenues and controlling the investment.
• The investors most likely use the below formula to evaluate BOT projects Revenues – OPEX – Loan Repayments ≥ CAPEX
Investors main concerns may be listed as below:
• Feasibility & Profitability • Clear Regulations • Bankability • Environmental Factors
Page #1 PPP in Airport Business
Page # 2 PPP in Airport Business
Major Types of PPP Projects To Achieve Successful Outcome from PPP Tenders • O&M Contracts • Clearly defined scopes • Long Term Lease Concessions • Concept design • B.T.O (Build Transfer Operate) • Agreed CAPEX(Capital Expenditure) based on the concept • B.O.T (Build Operate Transfer) • Clear definition of the Revenue Streams • B.O.O (Build Own Operate) • Governmental guarantee (Direct/Indirect) for the revenues • The investor should have the know-how for design, financing, building, construction and operations
Structure of PPP Projects in Airport Business
CLIENT TENDERING CONTROL
INVESTOR DESIGN FINANCE FINANCIAL BUILT INSTITUTIONS OPERATE FUNDING TRANSFER CONTROL
Page # 3 PPP in Airport Business
Advantages:
Improved and expanded infrastructure services that would not be there otherwise
Transfer the burden of raising funds from government to the private investor
Re-allocation of government resources for other urgent uses
Better allocation of risk between the public and private sectors
Reduce public sector risk and improve budget certainity through improved service delivery Operational , administrative and technological know-how transfer, training of local staff and development of domestic capital markets
Stimulate economic growth
Page # 4 TAV Experience TAV Structure
Airport Operation Companies Service Companies
Airports Duty Free Food and Beverage Ground Handling Other
Turkey ATU (50%) BTA (67%) HAVAS (100%) .TAV Operation Services (100%): . .Istanbul Ataturk Airport (100%) JV between TAV Airports •Total seating capacity of •Major ground handler in Commercial area Holding and Heinemann( .Ankara Esenboga Airport (100%) more than 12,800 Turkey with a 65% allocations, advertising, %50 -%50 ) .57 outlets in Istanbul market share travel agency services, .Izmir Adnan M. Airport (100%) CIP / VIP operations .Largest duty free operator .30 outlets in Ankara .Currently operates in 34 .Antalya Gazipasa Airport (100%) in Turkey airports in 9 different .24 outlets in Izmir countries .TAV IT (100%): Georgia .Operating in all TAV .10 outlets in Georgia Integrated Airport IT managed airports .Tbilisi and Batumi Airports (76%) .Major shareholder of services including .14 outlets in Tunisia Havas-Europe (67%) .Total of 15,000m2 sales AODB, FIDS, FMS and Tunisia .7 outlets in Macedonia which operates in Latvia, area BMS and Germany .Monastir and Enfidha Airports (67%) .Operates Istanbul Airport .More than 1400 Hotel (131 rooms) .Shareholder of TGS with Macedonia employees .TAV Security (100%): .Manages all F&B points in Turkish Airlines (50% - Security service .Skopje and Ohrid Airports (100%) IDO Ferry Lines Terminals 50%) provider in Istanbul, and ferry boats Latvia .Shareholder of CAS with Ankara and Izmir .Bakery & pastry factory KTHY (50%) including x-ray .Riga Airport (100% - Commercial serving Starbucks & Cafe screening and physical Area Management) Nero in Turkey security Saudi Arabia •Madinah Airport (33%) 2012 Revenues
€ 632 m € 255m € 116 m € 211 m € 93 m
Page # 6 TAV Structure
TAV Airports Holding
Airport Service Companies Companies
Atatürk Airport ATÜ Major shareholders are ADPM (38%), (100%) (50%) Akfen (8,1%), Tepe (8,1%) , Sera (2%), %40 publicly traded in Istanbul Stock Exchange Esenboga Airport (100%) BTA (67%)
A Menderes HAVAŞ Airport (100%) (100%) TAV Airports Holding (“TAV Airports”) is an integrated airport services company Gazipaşa TGS Airport (100%) (50%) providing design and construction, terminal / HAVAŞ / airport operations and maintenance services, Madinah EUROPE Airport (33%) (67%) duty free services, food and beverage services, airport security, ground handling and TAV O&M Monastir & (100%) other auxiliary services Enfidha (67%)
Tbilisi & Batumi TAV IT (76%) (100%) TAV Skopje & Ohrid Security (100%) (100%)
TAV Latvia (100%)
Page # 7 PPP Experience of TAV
• B.O.T. (Build Operate Transfer)
Istanbul Ataturk International Airport – International Terminal (1997 – 2005)
Ankara Esenboga International Airport (2006 - 2023)
Izmir Adnan Menderes International Airport – International Terminal (2006 – 2015)
Tblisi and Batumi International Airports (2005 – 2027)
Monastir and Enfidha International Airports (2007 – 2047)
Skopje and Ohrid International Airports (2010 – 2030) • B.T.O. (Build Transfer Operate)
Madinah International Airport (2011 – 2037) • Long Term Lease Concessions
Istanbul Ataturk International Airport (2005 – 2021)
Alanya Gazipasa International Airport (2008 – 2034)
Riga International Airport (2011 – 2021)
Izmir Adnan Menderes Airport (2012 – 2033)
Page # 8 Pax Growth : Turkey vs. TAV Airports
009 008 007 006 005 times 004 8,01 003 TAV’s total pax growth rate in 002 11 years TAV 001 000 Turkey
3.82times Turkey’s total pax growth rate in 11 years
Page # 9 Istanbul Ataturk International Airport
50000000,0 45000000,0 40000000,0 35000000,0 CAGR: 9,02% 30000000,0 25000000,0 20000000,0 CAGR: 5,47% 15000000,0 10000000,0 Before TAV 5000000,0 After TAV
,0
20190501905r6l 28190501905r6l 16190501905r6l 17190501905r6l 18190501905r6l 19190501905r6l 21190501905r6l 22190501905r6l 23190501905r6l 24190501905r6l 25190501905r6l 26190501905r6l 27190501905r6l 29190501905r6l 30190501905r6l
1190501905r7l 2190501905r7l 3190501905r7l 4190501905r7l
#6 in Europe 3,07 times # in World Istanbul Ataturk Airport’s passenger growth 20 in TAV’s first 12 years (2000-2012)
Page # 10 Ankara Esenboga International Airport
10000000,0 9000000,0 8000000,0 7000000,0 6000000,0 CAGR: 2,08% 5000000,0 CAGR: 10,65% 4000000,0 3000000,0 2000000,0 Before TAV After TAV 1000000,0
,0
1190501905r7l 2190501905r7l 3190501905r7l 4190501905r7l 5190501905r7l
16190501905r6l 23190501905r6l 30190501905r6l 17190501905r6l 18190501905r6l 19190501905r6l 20190501905r6l 21190501905r6l 22190501905r6l 24190501905r6l 25190501905r6l 26190501905r6l 27190501905r6l 28190501905r6l 29190501905r6l 2,03 times Ankara Esenboğa Airport’s passenger growth under TAV Management
Page # 11 Izmir Adnan Menderes International Airport
3000000,0 CAGR: 7,52% 2500000,0
2000000,0 CAGR: -2,52%
1500000,0
1000000,0 Before TAV After TAV 500000,0
,0
1190501905r7l 2190501905r7l 3190501905r7l 4190501905r7l 5190501905r7l
16190501905r6l 17190501905r6l 18190501905r6l 19190501905r6l 20190501905r6l 21190501905r6l 22190501905r6l 23190501905r6l 24190501905r6l 25190501905r6l 26190501905r6l 27190501905r6l 28190501905r6l 29190501905r6l 30190501905r6l 1,66 times Izmir Adnan Menderes Airport’s passenger growth under TAV Management
Page # 12 Tbilisi and Batumi International Airports (Georgia)
1600000,0 1400000,0 1200000,0 CAGR: 12,88% 1000000,0 800000,0 CAGR: 6,21% 600000,0 400000,0 After TAV 200000,0 Before TAV
,0
27190501905r6l 28190501905r6l 29190501905r6l 30190501905r6l
5190501905r7l 1190501905r7l 2190501905r7l 3190501905r7l 4190501905r7l
NEW AIRLINES ATTRACTED TO GEORGIAN AIRPORTS 2010 2011 2012 Pegasus ATA Airlines Qatar LOT Polish Air Astana British Airways 2,07 times China Southern Aegean Airlines Ural Airlines Estonian Georgian Airport’s passenger growth under FlyDubai Alitalia Air Kazakhstan TAV Management
Page # 13 Skopje & Ohrid International Airports (Macedonia)
1000000,0 900000,0 800000,0 CAGR: 1,94% 700000,0 600000,0 CAGR: 7,72% 500000,0 400000,0 Before TAV After TAV 300000,0 200000,0 100000,0
,0
1190501905r7l 2190501905r7l 3190501905r7l 4190501905r7l 5190501905r7l
29190501905r6l 30190501905r6l
NEW AIRLINES ATTRACTED TO MACEDONIAN AIRPORTS 2010 2011 2012 Transavia Wizzair Jetairfly Hello Ltd. Belair Flydubai Borajet Pegasus Wizzair Base operations XL Airways Air Berlin Air Europa Belle Air Europe Blue Panorama 1,25 times Mistral Air Arkefly Macedonian Airport’s passenger growth Corendon Dutch German Sky under TAV Management
Page # 14 Monastir & Enfidha International Airports
4500000,0 *Arab Spring Effect 4000000,0 3500000,0 3000000,0 2500000,0 CAGR: -3,52% 2000000,0 1500000,0 1000000,0 500000,0
,0
30190501905r6l
5190501905r7l 1190501905r7l 2190501905r7l 3190501905r7l 4190501905r7l
*Due to the Arap Spring effect there was a dramatic decrease in the passengers numbers in 2011, however TAV’s huge marketing efforts 1,45 times showed its results in 2012, reaching almost the Tunisian Airport’s passenger growth same passenger levels before Arap Spring just under TAV Management after Arap in 1 year time. Spring
Page # 15 Madinah International Airport (Kingdom of Saudi Arabia)
5000000,0 4500000,0 4000000,0 3500000,0 3000000,0 2500000,0 2000000,0 After TAV 1500000,0 Before TAV 1000000,0 500000,0
,0
1190501905r7l 2190501905r7l 3190501905r7l 4190501905r7l 5190501905r7l
29190501905r6l 30190501905r6l
TAV has been operating Madinah International Airport since July 2012 and immediate increase in passenger figures can be seen after takeover
Page # 16
TAV Growth Rates through PPP Projects
)
€
r3l
(million (million
0r11l
2719000190
0r9l
12190001900
r2l
r1l r1l r2l r2l r2l
0r3l 0r5l 0r6l 0r7l
1319000190
9
22190001900
2
1519000190 1719000190 2019000190 3019000190
30190001900 10190001900 11190001900 17190001900
23190001900 CAGR % CAGR % EBITDA EBITDA
Passenger (mpax) Passenger 21 50
)
€
(million (million
1099,0
22709,0
20269,0
881,0
785,0
17535,0
640,0
627,0
508,0 12194,0
402,0 CAGR %
11289,0 9473,0
18 8146,0 CAGR 19%
Employees Revenue Revenue
Page # 17 Financial & Employment Support of TAV to Economy Through PPP Projects
According to ICAO studies; TRIGGERS In the global economy, EVERY $100 in Airport Bussiness ADDITIONAL $325 for the general economy
CONTRIBUTION • TAV’s 2012 REVENUES 1,1 BILLION 3,575 BILLION TO THIS ECONOMY
The same study shows that; INCREASE EVERY 1000 PAX 1 DIRECT + 1 INDIRECT EMPLOYMENT
• TAV has increased its passenger numbers from 9 million to 72 million since 2000. This results ;
63.000 x 2 126.000 NEW EMPLOYMENT
TAV Airports Holding employes more than 22,000 employees and overall employment figures in the airports TAV operating is more than 60,000 employees
• Considering the economic support of TAV to the governments, TAV has paid more than EUR 1,5 billion through lease payments and EUR 1 billion through tax payments.
Page # 18 Thank you