AIRPORT DEVELOPMENT International News Each Issue of Airport Development Focuses on a Different Region of the World, with Global News at the End of This Section

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Published biweekly – available by annual subscription only – www.mombergerairport.info Editorial office / Subscriptions Phone: +1 519 833 4642 e-mail: [email protected] Managing Editor / Publisher: Martin Lamprecht [email protected] News Editor: Paul Ellis [email protected] – Founding Editor: Manfred Momberger

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AIRPORT DEVELOPMENT International News Each issue of Airport Development focuses on a different region of the world, with global news at the end of this section. A list of past focus regions published in recent years can be downloaded from the Bonus section in the subscriber pages of our website. Momberger VIEW Points bonus feature in this issue How Eco-Minded Airports Are Keeping Up With Global Travel by Hillary Marshall - from page 14

Focus Region: Eastern Europe & The Balkans Other Regions from page 13 RUSSIA In view of the unstable market conditions, Moscow’s Domodedovo Airport (DME) is delaying retail tenders for its on-going major terminal extension which was planned to be purely international, but that may not be the case now. The airport used to have 45% international passengers but this share has been shrinking due to the crisis. Airlines are increasingly using their aircraft domestically, with attractive fares designed to be more competitive against the railways. Therefore, the terminal is being built so that it can be switched, or can be shared (between domestic and international traffic. DME, which served only 30.5 million passengers (-7.7%) in 2015 after 33.04 million in 2014 because it lost one of its main hub carriers, Transaero, no longer is Russia’s No. 1 airport. DME – recognized as the best airport in Russia and the CIS according to Skytrax – is sticking to its Capex investments. The airport says: “Despite the current market outlook and a set of unfavourable external circumstances, Moscow- Domodedovo Airport is not revising its investment and development programmes.” 2016 will see the completion of a more than RUB 20.5 billion (USD 300 million) reconstruction of the western segment of the T1 area of the central terminal, expanding the space to more than 256,000 m². Construction of the new T2 segment of the terminal with a total area of 232,400 m² has an investment volume exceeding RUB 27 billion (USD 400 million) until the start of the FIFA World Cup in 2018. These combined expansions will push up the total passenger capacity of the airport’s central terminal (T1+T2) to over 45 million per year. #1030.1

The Moscow Region Urban Council has approved the Northern Terminal Complex project for Moscow’s Sheremetyevo International Airport (SVO), which is scheduled to be completed by 2018 in time for the 2018 FIFA World Cup. The project includes a new Terminal B, a USD 330 million underground tunnel connecting the northern and southern parts of the airport, as well as additional infrastructure such as carparks, a new rail line and station. The first stage of a USD 300 million new passenger terminal B is designed for 15 million passengers per year. The old Terminal B, built in 1964 and known as Sheremetyevo 1, has already been demolished, making way for a new 114,000-m² terminal with an annual passenger capacity of 20 million. SVO CEO Mikhail Vasilenko said that the new infrastructures will help SVO create an integrated and technologically advanced air terminal under one roof with five main passenger terminals (B, C, D, E, F) with 500,000 m² of total space and an annual passenger capacity of 58 million. Earlier in June 2016, Russia’s construction authorities approved the project to build the tunnel between the airport's northern and southern terminals.

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These projects are extremely important as the airport prepares to meet demand and increase airport capacity to 40 million passengers per year. They include construction of the third runway which will be put into operation by 2018. The new independent runway will allow the airport to provide 44 additional movements per hour. USD 150 million will be spent on a third alternative fuel-filling complex and USD 60 million for a cargo complex with a capacity of 380,000 tonnes annually. New infrastructure will ultimately increase capacity to 58 million passengers per year by 2018. -- The SVO reconstruction programme had been announced in 2013 already. #1030.2

The construction authorities have approved plans for a new terminal at Gelendzhik Airport in southern Russia. Airport operator BasEl Aero expects terminal investments of RUB 500 million (USD 7.8 million). After completion, the new terminal area will exceed 5,000 m², doubling hourly capacity to 300 passengers. Gelendzhik Airport in the resort town opened in June 2010 and handles 140 passengers per hour. It was the first new airport to be built in Russia in the post-Soviet era. According to BasEl Aero, the airport handled 1.2 million passengers over the six-year period. Airlines operate scheduled flights from more than ten Russian cities - including Moscow, St Petersburg, Yekaterinburg, Novy Urengoy, Surgut, Tyumen, Ufa, and Cherepovets. BasEl Aero also has begun constructing a new terminal at Anapa International Airport in the Krasnodar region. The new 12,075-m² terminal will be built at a cost of approximately USD 19 million and is scheduled for completion in late 2016. The facility will be capable of handling 600 passengers per hour and will boast the latest in passenger processing and energy-efficient technologies. Other facilities will include a business lounge and a children’s playground. Leonid Sergeyev, CEO of BasEl Aero, said: “The economic and political downturn in Russia sparked a surge in domestic travel in the airports operated by BasEl Aero. Along with the modernization of the existing terminal, we’ve decided to build a new one to cater to the needs of the increasing number of tourists visiting Anapa.” #1030.3

Completion of the preparatory stage for the redevelopment works at Yermolino Airport in the Kaluga Region (#990.6) was announced in February 2016. With a total apron area of 250,000 m² and 40 planned parking stands, the airport complex is expected to handle up to 2,400 passengers per hour. In accordance with the project, the airport will be granted 4C ICAO category status, allowing it to accommodate all types of modern civil aircraft. Passenger turnover at the reconstructed airport is expected to reach 6.5 million by 2020. Renovation of the airport infrastructure is being financed by the Ministry of Internal Affairs. The airport is scheduled to start operations in 2017. Construction of a 7-km rail link to the airport and a new highway junction are expected to improve ground access. -- The new Yermolino International Airport could possibly offer transport services to participants and guests of the 2018 FIFA World Cup, which will take place in Russia. UTair Aviation, based at the airport, has plans to deploy at least 20 aircraft there. #1030.4

Moscow's fourth international airport, Ramenskoye, built on the Zhukovsky aviation industry test site, officially opened on 31 May 2016, but public transport problems and the economic recession put a damper on celebrations (#1026.OPS24). Prime Minister Dmitry Medvedev commissioned the airport, about 40 km southeast of Moscow city centre. Despite being far less accessible than its three competitors, Medvedev praised the airport opening as an important event "both for Moscow and for our country", saying it gave people more flexibility on travel. The airport development programme consists of three stages. A 15,000-m² passenger terminal and a throughput capacity of 4 million passengers per year was built within the first stage, as well as a motorway to the airport and carparks. The second and third stages anticipate expansion of the first passenger terminal and construction of the second one. Capacity will grow to 12 million passengers per

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year and the total area of all terminals will be 60,000 m². In 2017, a cargo terminal will be added. Over RUB 10 billion (USD 152 million) will be invested into developing the airport over five years. The airport has an initial capacity of 4 million passengers per year, according to Rostec, the Russian state conglomerate that controls the airport's operating company Ramport Aero. Ramenskoye aims to become a major centre for experimental, government and civil aviation. The Ramport Aero international aviation holding company invested USD 27 million into the airport’s terminal with annual capacity of 4 million passengers, according to the Izvestia daily. The Russian government issued a decree in March 2016 ordering Ramenskoye to open for scheduled international flights. The airport will handle around 20 flights per week by two passenger airlines from Central Asia - Air Kyrgyzstan and SCAT Airlines from Kazakhstan. It will also have two Russian freight carriers: Sky Gates Airlines and an Aviastar-TU. The airport, built with an initial investment of RUB 10 billion, was originally planned to reduce congestion at the three existing Moscow airports: Domodedovo, Sheremetyevo and Vnukovo, following years of strong growth in passenger traffic. Russia has since plunged into recession due to falling oil prices and Western sanctions over its role in the conflict in Ukraine. #1030.5

Ramport Aero, the operator of Ramenskoye Airport, has chosen duty-free shopping, advertising and catering partners for Moscow’s fourth airport by signing an eleven-year co- operation contract with Travel Retail Domodedovo, a Russian subsidiary of Germany’s Gebr. Heinemann, the operator of duty-free & Travel Value shops at international airports. In line with the contract, 90% of goods sold in duty-free shops will consist of perfumery, cosmetics, alcoholic beverages, accessories, and confectionery goods. Russia’s advertising agency Primavera will be in charge of advertising at Ramenskoye for a period of five years. Catering services will be provided by Russia’s Shokoladnica and Pizza Hut. Ramport Aero, a joint venture between Vilnius-based, Warsaw-listed aviation business group Avia Solutions Group (ASG) and Russia’s industrial giant Rostec, is investing a total of RUB 1.8 billion (EUR 21.7 mln) of its own funds in the first stage of airport development. By 2019, the total amount of investment in the airport is envisaged to increase to RUB 11.8 billion (EUR 142.5 million). In 2015, ASG reduced its participation in Ramenskoye Airport construction project to 22.5%, from 75%. ASG holds a 30% stake in Dutch-based Avia Solutions Group B.V., which owns 75% of shares in Ramport Aero, the developer of the project. #1030.6

Volga-Dnepr Group and Moscow’s Sheremetyevo International Airport have signed an agreement that will see them enhance cargo infrastructure at the airport and develop relationships with other airports. The deal will see the development of facilities for the handling of special freight and a new maintenance hangar. The Director General of Volga-Dnepr subsidiary AirBridgeCargo Airlines, Sergey Lazarev, said: “Both Volga-Dnepr Group and Sheremetyevo Airport are strategically oriented towards developing a modern international-level air cargo hub on the premises of Sheremetyevo. All agreements reached are particularly intended to guarantee a high quality level of air cargo services for our customers.” Sheremetyevo International Airport Director General Michael Vasilenko added: “[The deal] embraces not only the quantitative side, where Volga-Dnepr Group guarantees an agreed volume of transit, transfer and import-export cargo flows, but the qualitative side as well with the building of an up-to-date hangar complex for maintenance and repair services, expansion of cargo facilities to offer handling for special commodities and, most importantly, provision of all the resources needed from our side.” The agreement also encourages co-operation with other international airports with the aim of increasing cargo flows. It will also allow the exchange of know-how in the implementation of certain business-related projects and innovations. #1030.7

A Turkish firm, Renaissance Construction, one of the country's largest building contractors, has won a tender to build a terminal and tunnel at Moscow's Sheremetyevo Airport, according

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to Mikhail Vasilenko, Sheremetyevo's CEO. He did not disclose the price or any other details, but Sheremetyevo said in January that the construction of a passenger terminal and a tunnel by 2018 would cost USD 630 million. Building a cargo terminal, for which a separate tender is expected, would cost an additional USD 70 million. The choice of a Turkish firm is unusual because of Moscow-imposed sanctions on Ankara after Turkey downed a Russian warplane near the Turkish-Syrian border in November 2015. As a consequence, Turkish companies were banned from Russia's construction, tourism and hotel business from 1 January 2016, an economic punishment that has affected Russia's economy more severely than Turkey's. However, Renaissance Construction and Limak, the other Turkish firm which tendered, got around the sanctions by submitting their bids from their Russian-registered subsidiaries, state-controlled Sheremetyevo said previously. According to the updated list, Turkish companies will not be able to construct buildings or work in architecture and design in Russia. The list later added an exception for 53 Turkish companies working in Russia. #1030.8

IATA has proposed an agenda to strengthen aviation in Russia based on the further implementation of global standards and best practices. “A healthy aviation sector is vital for Russia, connecting the communities across the country’s vast land mass and proving vital trade and cultural links globally. These are difficult times for Russian aviation and there is no silver bullet solution to invigorating the sector. However, a partnership agenda that extends the positive impact that global standards are having in safety and distribution will strengthen the foundations of the sector for success,” said Tony Tyler, IATA’s Director General & CEO, who made his comments at the first IATA Aviation Day Russia where IATA signed a co-operation agreement with the Russian Association of Air Transport Operators. The agreement helps to mark the 20th anniversary of the opening of IATA’s office in Moscow and deepens IATA’s overall partnership with Russian aviation. Aeroflot was IATA’s first Russian member airline, joining the association in 1989. Today eleven Russian airlines are IATA members. The important contribution of IATA’s global standards to Russian aviation were recognized in a Memorandum of Understanding signed between the Russian Ministry of Transport and IATA in 2009. “IATA is a long-time partner of Russian aviation and this has created significant value. The IATA Operational Safety Audit (IOSA) aligns some 400 airlines, including our eleven Russian members and five other Russian airlines with the global benchmark for operational safety. And the Billing and Settlement Plan has helped to link the country’s consumers to the world with global best practices for ticket distribution. Today, we are deepening our partnership with Russia with a commitment to co- operate even more broadly with the Russian Association of Air Transport Operators. By working in partnership with all stakeholders - including the government - I am confident that we can create even more value with connectivity as a catalyst for economic and social development,” said Tyler. IATA has proposed the following agenda for the Russian government: Costs: Continue to recognize the benefits of lowering and eventually removing VAT for domestic air transport. Ensure that airport charges and infrastructure developments are agreed by airlines and the airport operators with a focus on cost-efficiency and aligned with the global principles agreed by governments through ICAO. These include transparency, meaningful consultation and non-discrimination. Smarter Regulation: Adopt the Montreal Convention 1999 (MC99) to provide global standard risk coverage for passengers and shippers and to facilitate e-cargo implementation. Ratify the Montreal Protocol 2014 of the Tokyo Convention to close a gap in international law with respect to the growing problem of disruptive passengers. Accelerate the adoption of the global standard for special and atmospheric referencing - QNH and WGS 84 - to deliver even greater safety and cost benefits as Russia modernizes its air traffic management system. Join the Smart Security initiative of IATA and Airports Council International to improve airport security and reduce passenger hassle by combining new technology with regulatory best practices. Environment: Support a global agreement through ICAO on a Market-Based Measure to

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manage aviation’s carbon footprint. The air transport industry is united in its call for a mandatory global carbon offset scheme. #1030.9

BELARUS The World Bank is invited to invest in building the second runway of Minsk National Airport. Prime Minister Andrei Kobyakov said when he met with Cyril Muller, the World Bank's Vice President for Europe and Central Asia, on 1 June 2016. He said: “Developing the country's transit potential is a strategic priority for us. The World Bank has already been of tremendous help in this regard. We would like to invite the Bank to participate in a new project for building the second runway at Minsk National Airport. The airport is a strategic installation for the country's transit potential.” In accordance with the action programme for 2016-2020, the Belarus government intends to follow the policy aimed at ensuring macroeconomic stability and modernizing the economy. “Economic changes will affect quite a large number of areas. Those include the formation of effective financial markets, support for the development of the private sector, efforts to bolster the social security system, the formation of effective markets of merchandise and services.” Construction of the second runway at Minsk National Airport will kick off in October 2016. The new runway is one of the State investment programmes for 2016 approved by the President in late January 2016. It envisages the allocation of BYR 4.5 trillion. The second runway will be 60 m longer than the first one and will total 3,700 m. The width will remain the same – 60 m. The project is estimated to cost USD 320 million. There are different proposals for foreign investors to take part in the project. They will be considered once the architectural project is approved. The new runway will feature lighting equipment for flights operated at night hours or in bad weather conditions. -- The second runway is due to open in 2018, after which the reconstruction of the first runway will be launched. A new international terminal will also be opened in Minsk National Airport. #1030.10

A parliamentary delegation from Thailand met senior officials of Vitebsk Oblast and the city of Vitebsk on 26 June 2016 to discuss the role of Vitebsk Airport in a future co-operation. Among the issues hampering the development of ties between Belarus and Thailand is the absence of direct air service, said Vladimir Terentyev, the Chairman of Vitebsk Oblast Council of Deputies. “One of the goals of the visit of the Thai delegation was to study the logistics. First and foremost, they were interested in the capabilities of Vitebsk Airport,” he noted. Among the goods that may be of interest for Thailand are linen products, copper and timber products. #1030.11

UKRAINE On 24 February 2016, Ukraine's Cabinet approved a State-funded programme for the development of the country’s 17 airports until 2023 at a cost of UAH 8.7 billion. The programme is aimed at improving management of the airports' property, will lead to more air transport, and have a positive economic effect on the development of all Ukrainian regions. Under the programme, the air transport infrastructure should be brought in line with international standards and Ukraine is expected to strengthen its status as a transit state due to its unique geographic location. What is more, the programme is designed to improve the efficiency of managing state-owned property. The programme will be financed not only from local budgets, but will also use, among other things, loans to be raised against State guarantees, airports' own funds, and private investment. About UAH 1.2 billion of the total will be raised from private investors for the development of airport infrastructure not related to aviation. The programme foresees construction, renovation, modernization of airfields, runways and airport facilities; airport infrastructure owned by Ukrainian airlines, the creation of an integrated state-owned chain of airports through mergers and transfer of state and municipally-owned airports to the Infrastructure Ministry. Under the programme, such

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international airports as Boryspil (Kyiv) and Lviv will remain in state ownership. The following airports will be returned to State ownership: Dnipropetrovsk, Zhuliany (Kyiv), Kharkiv, Odesa, Donetsk (which is now a destroyed facility in occupied Donbas territory), and Simferopol (located in the Russia- annexed Crimea). What is more, the airport facilities that were built or renovated as part of the Euro 2012 football championship preparations will be transferred to the Infrastructure Ministry. "As a comprehensive approach to solving the problem of the development of aviation and state transport infrastructure during the construction, reconstruction and modernization of the airports, their infrastructure should be integrated into the system of municipal electric, road and railway transport to create transport hubs by combining all types of transport," the programme said. The programme foresees that overall passenger flows should grow to 24.3 million travellers by 2023, which is twice more than in 2015, while airport capacity should double with simultaneously bringing airport services in line with international standards. The time of handling one aircraft is expected to shorten to 35-40 minutes. Due to the implementation of this programme, Ukraine plans to double its transit potential as a major international aviation transport hub. Public and private partnership will be more actively engaged to maintain and operate the airports and create a favourable investment climate to develop the aviation industry. The share of commercial activities should grow to 40% of overall revenue, and the share of low- cost airlines is projected to grow to 30% of the air transport market. At least 1,000 additional jobs are expected to be created under the state program. #1030.12

Zhytomyr’s regional airport plans to obtain the status of an international airport. The owner of Yanair airline that invests in the airport, Oleksiy Yanchuk, gave this information, saying that the airline will use the airport as the servicing base and synchronously develop it, hoping that with the gradual development, the Government will assign the status of an international airport. Yanchuk added that if the events unfold under the plan, in summer the airport could service charter flights to recreation zones. The owner of the airline did not disclose planned investment in the development of the airport, and only said that much money has been invested and much more will be invested. Zhytomyr Mayor Serhiy Sukhomlyn said that Yanair paid UAH 1.5 million to the city's budget in 2015 and the development of the airport could create around 400 jobs. After 25 years of laying idle, the Zhytomyr regional airport serviced the first technical flight of Yanair's Saab 340 on 29 January 2016. The airport's Director Serhiy Budiak said that the runway can accommodate An-24 and Saab 340 aircraft. In the future, it is planned to continue the reconstruction of the airport and expand its capacity. Yanair acts as an investor in the airport and plans to make it its technical base. Yanair was registered in Zhytomyr on 15 June 2012. In July 2013, it received an operating certificate. The airline is based at Kyiv- Zhuliany International Airport. At present, its fleet consists of two Saab 340s, three Airbus A320s, three Boeing 737-300s, and two Boeing 737-400s. #1030.13

ROMANIA Suceava’s ‘Stefan cel Mare International Airport’, located in north-eastern Romania, was reopened for international traffic in October 2015 after more than a year of runway work which continued well into December 2015. The local authorities plan to start working on a new international terminal shortly. The airport was upgraded under a project worth RON 105 million (EUR 23 million), financed with money from the European Union. State-owned airline TAROM resumed scheduled flights from Bucharest to Suceava on 12 November 2015, according to Airport Director Ioan Mariuta. Catalin Nechifor, President of Suceava County Council, said that the airport would enter a new stage with the second terminal for passengers and cargo. The U.K., Spain, Italy, and Germany are some of the destinations targeted by the local authorities. Suceava Airport was closed for upgrading in January 2014. The work included repaving the runway, building a new control tower, and revamping the passenger terminal. #1030.14

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SLOVENIA Ljubljana’s ‘Jože Pučnik Airport’ has begun upgrading its terminal building with the refurbishment to be carried out in several phases until its completion in 2018. Slovenia's busiest airport has already added an arrivals and departures gate and is clearing space in a bid to expand commercial and retail areas, as well as improve passenger comfort. Furthermore, the airport will tackle bottlenecks at check-in and security with the aim of cutting down on queuing time. Most of the work will take place in 2017, when both the check-in area and baggage-handling facilities are being expanded, while additional capacity will be added at baggage claim. Work will also start on moving a nearby road so as to enable better access to the terminal building and allow for the development of a commercial and logistics complex to the north. Prior to the airport's takeover by Germany's Fraport in 2013, minority shareholders rejected plans for building a multi-million euro new terminal, citing unfavourable economic conditions. The new terminal was meant to cover an area of 31,200 m², with its opening planned for 2015. The original price tag for the project stood at EUR 73 million but was reduced to EUR 57 million. However, the airport’s Managing Director, Zmago Skobir, says a brand-new facility is still planned "in accordance with passenger growth, which will probably be a bit different from the exiting one." – The airport's 13,000-m² terminal building was opened in 1973 but has since been reconstructed and refurbished. Ljubljana Airport handled 1.438.304 passengers in 2015 (+10%) and expects moderate growth in 2016. Adria Airways is set to boost frequencies from Ljubljana during the 2016 summer season by introducing flights to Cologne, while LOT Polish Airlines has launched services from Warsaw. It aims to carry 30.000 travellers on the route during its first year. Furthermore, Aegean Airlines introduced flights from Athens in June 2016. #1030.15

Maribor’s ‘Edvard Rusjan Airport’, in the north-east of the country, is confident that new scheduled services to Düsseldorf and Split, operated by the German-owned Express Airways since 28 April and 8 May 2016, respectively, will prove popular with travellers and result in strong passenger growth. The airport estimates that the Boeing 737-300 operating the two routes will record an average cabin load factor of 70%. Therefore, Maribor Airport's Managing Director, Ladimir Brolih, anticipates that some 10.700 passengers will use the service to and from Düsseldorf by the end of the 2016 summer season. "Düsseldorf was selected based on expert analysis and it being the centre of one of the richest regions in Europe. In addition, there is strong economic co-operation between local businesses and the German state," Mr Brolih said. Express Airways' CEO, Sefa Tuncer, noted that the new Düsseldorf route will be primarily used by holidaymakers from Germany, Belgium and the Netherlands who gravitate towards the North Rhine-Westphalia region and will make up some 60% to 70% of all travellers on the flights. The airline will operate the route for a year and will then determine whether the service is profitable, since significant efforts and resources have been put into the new flights. Mr Tuncer added that Express Airways is also considering charter services from Maribor to Antalya in Turkey and Girona in Spain. Maribor Airport aims to handle some 27,500 travellers in 2016, representing an increase of 10% on 2015. The airport says its numbers could exceed 30,000 if Express Airways follows through with all of its planned services. Furthermore, the airport expects to process 300 tonnes of cargo, up from 183 tonnes in 2015. Express Airways will be the only airline operating scheduled flights from Maribor in summer 2016. The small airline has a flight school at the airport and offers panoramic flights over Slovenia, as well as seasonal commercial services from Brač and Split in Croatia to Germany and Sweden. It currently operates its flights with a leased ATR72-500. Reports suggest the airline could launch one destination in Western Europe and the other in the south of the continent next summer, while Mr Brolih confirmed that Adria Airways will not resume its seasonal service to London’s Southend Airport. The airport is still in negotiations with budget airline Wizz Air concerning potential new routes. #1030.16

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CROATIA A new passenger terminal, runway and taxiway system, and new infrastructure such as storage facilities, access roads, and car parking are currently being constructed at Dubrovnik Airport, located around 15 km from the city centre. The EUR 225 million development project is expected to celebrate its official commissioning in March 2017, with first regular flight operations from 30 September 2017. The runway construction is the most demanding part of the project and will last the longest and should be finished by April 2019. The aim of the redevelopment, which is largely being financed from strategic EU funds, is to increase the airport’s passenger capacity and to reduce congestion on the current runway. The development also includes the construction of internal gas stations, a new aviation fuel depot, and an underground hydrant system, and the installation of solar systems to improve energy efficiency. Authorities say that once the airport opens it will be the pride of the south and one the most modern in the region. “We want visitors to feel nice when they land in Dubrovnik,” Tomislav Macan from the development team said. -- With over 1.5 million passengers passing through Dubrovnik annually, the airport has been voted by ACI as the second best in Europe in the under 5 million passenger category. #1030.17

Construction of Zagreb Airport's new passenger terminal is ahead of schedule and will be complete in 2017. Recently, two 11-tonne generators, which will power up the building, were purchased from a Croatian-based company, while the Spanish ADELTE has been commissioned to manufacture eight air bridges and the French-based ALSTEF will design and install a new baggage- handling system. Meanwhile, Aelia Duty Free has confirmed it will open a large 600-m² store inside the new facility in about two years. “It is the next step in leveraging our partnership with Aéroports de Paris, which is also part of the airport consortium. It makes sense for us and for them, and it underlines the strength of that partnership,” Aelia CEO Ambroise Fondeur says. IMAT Mobiliario y Diseño has been awarded the production and installation of passenger seats at the new boarding areas. Master Net, a combination of four and five seaters, has been selected for Zagreb. Permits for the terminal’s use should be issued by the end of 2016, following the commissioning phase, where all the equipment needed to operate the entire building is put through a series of rigorous testing procedures before it can be commissioned. Some 1,000 construction workers are on site both day and night. The Managing Director of Zagreb Airport, Bruno Mazurkiewicz, recently said: “The construction of the new terminal building is a major investment, which will contribute not only to an increase in air traffic but also to the economy in general. I believe Zagreb Airport will become one of the most important hubs in this part of Europe”. Once the first phase of the project is completed, the new terminal will have the capacity to handle 5.5 million passengers per year, up from the current 2.2 million. The airport will be expanded in subsequent phases to reach an annual capacity of 8 million passengers, though no firm timeframe has been set for future development. The project involves a total investment of EUR 331 million, EUR 243 million of which will be spent on the construction of the new terminal and EUR 88 million for the maintenance of airport infrastructure over the entire period of the thirty-year concession, awarded to the French-led Zagreb Airport International Company (ZAIC). The consortium is made up of Aéroports de Paris Management (20.77%), Bouygues Bâtiment International (20.77%), the Marguerite Fund (20.77%), International Finance Corporation (17.58%), TAV Airports (15.0%), and the local company Viadukt (5.11%). #1030.18

The Government has accepted a proposal to name the new Zagreb Airport, which is currently under construction, after Croatia’s first President Franjo Tuđman. The French-led Zagreb Airport International Company (ZAIC), who won a 30-year concession to manage and operate the airport, says

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that construction of the new multi-million euro terminal is ahead of schedule and will be complete in 2017. The new terminal with eight boarding bridges will eventually have the capacity to handle 5 million passengers annually. The first phase of expansion will see the existing passenger capacity go from 2.2 million to 3.5 million per year, before adding 1.5 million more capacity in the next phase of the project. #1030.19

Osijek Airport is to be put up for concession by the end of 2016, with the future strategic partner expected to modernize the existing infrastructure, boost capacity, and acquire new equipment for commercial operations. The overall aim of the project is to strengthen cargo traffic in Osijek - Baranja County and to foster economic development in the region by improving the airport's competitiveness. "We have been considering this option for several years now. A feasibility study on this matter has already been prepared. Talks have been held with a number of potential concessionaires who were presented with what Osijek Airport can offer them and what it expects in return. The next step is to launch tender procedures to select a concessionaire", Osijek Airport's Managing Director, Domagoj Marinić, said recently. #1030.20

Osijek Airport has announced the construction of a new maintenance, repair and overhaul centre. The project is valued at EUR 2.9 million and will be built and financed by the Zagreb Traffic Institute, which recently expressed interest in purchasing a stake in Slovenia's maintenance company Adria Airways Tehnika. The aircraft maintenance centre will be able to service ATR, Embraer, and Bombardier Dash-type aircraft. The first phase of the project included construction of a 1,200-m² hangar by spring 2016, while the second phase foresees an additional hangar with the ability to handle Boeing 747 aircraft. "With this investment, we plan to employ some fifty to eighty people during the first phase and over 100 in subsequent phases", Boris Smrečki, the head of the Zagreb Traffic Institute, said. "This will boost Osijek Airport's value, positioning itself in the region with a new service which is not overly common at airports. The hangar was built near the old control tower, the only available vacant space", Osijek Airport's Managing Director, Domagoj Marinić, added. #1030.21

Rab Island, located off Croatia’s north-western coastline, is likely to become the site of the country’s tenth commercial airport. A total of EUR 800,000 has been spent on various surveys and environmental impact studies of the future airport, all of which have been financed through the European Union's Pre-Accession Assistance Funds. According to preliminary plans, the airport will be used for both domestic and international flights and will feature a 1,700-m by 45 m runway. In addition, it will have the ability to accommodate aircraft with a capacity to seat up to 150 passengers. According to local authorities, the airport could handle over 200,000 passengers per year with some 50,000 arriving from the European Union and a further 75,000 travellers from Russia and the Far East. Rab Airport will also be able to handle cargo traffic and will feature hangars and pilot training facilities. The airport will also offer car parking for 500 vehicles, a first-aid and fire-brigade service, customs, duty-free and other facilities in line with international standards. However, concerns have been raised over the airport’s viability. Rab is located between the Rijeka and Lošinj airports, the latter of which is struggling to attract larger-volume traffic itself. #1030.22

SERBIA Belgrade’s ‘Nikola Tesla Airport’ recorded its best year on record in 2015 in terms of passenger numbers and profitability and has cemented its position as the busiest in former Yugoslavia. It is also expected to have ranked within the top 100 busiest airports on the continent for a second year in a row. Belgrade welcomed 4,776,110 passengers in 2015, over 137,500 more than the year before. Its numbers represent a growth of 3% on 2014. The figure was achieved despite a slight dip

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in the number of operated flights. There were 58,513 commercial aircraft movements, down 0.3%. Furthermore, the airport processed 13,091 tonnes of cargo, an increase of 25%. Overall, a total of 13,085 travellers passed through the airport on a daily basis or 545 per hour. The number of transit passengers doubled, growing 52% on the year before. Despite the airport recording its busiest year since opening its doors in 1962, a downward trend over the past few months has come as a result of Air Serbia, which has cut down on its network during the 2015/2016 winter season. Ironically, the carrier has also attributed the most to the airport's overall growth during the year following a busy summer. Managing Director, Saša Vlaisavljević, forecasts for the airport to register 4%- 6% passenger growth during 2016. #1030.23

The government of Serbia’s northern province of Vojvodina has announced plans to develop Novi Sad’s sports and agriculture airport into a commercial one, despite it being only 70 km north of the capital Belgrade. According to plans set out by the local government, EUR 3 million will be invested into developing the airport to cater for low-cost, general aviation, and cargo flights. The design of the new terminal has been completed. The Prime Minister of Vojvodina, Bojan Pajtić, says the project will likely be financed through a public-private partnership with an investor already identified. According to a State study, out of all the airports in Serbia, the one in Novi Sad experiences the least fog-affected days. Millions have been provided so far for the redevelopment of Užice Airport in western Serbia, which was devastated during the 1999 bombing of Yugoslavia. The Serbian government and the European Union have jointly invested over EUR 1 million into the creation of a project masterplan, while significant funds were raised several years ago at a donor conference for the removal of mines around the airport's runway. "Once we complete the overhaul of the 3,100-m runway, then all aircraft will be able to use the airport," said the Managing Director of Užice Airport, Saša Savić. Local authorities hope for the airport to be used for charter and cargo flights. The region is home to some of Serbia's main export goods. However, it is also close to several major former Yugoslav cities, with Sarajevo and Belgrade just 118 km away. During the 1996 summer season, JAT Yugoslav Airlines operated a two weekly Belgrade - Užice - Tivat service. -- The entire redevelopment and construction project is valued at EUR 19 million. #1030.24

BOSNIA-HERZEGOVINA The Federation government of Bosnia-Herzegovina has allocated EUR 2 million to the Tuzla and Mostar airports. The Government will provide EUR 802,730 to each airport for infrastructure upgrades, while an additional EUR 220,000 will be provided to cover operational expenses. Tuzla Airport will use the funds to improve lighting systems, purchase cargo equipment, upgrade its runway, and compile necessary documentation for the future construction of a new terminal building, while Mostar Airport will upgrade its terminal and purchase new equipment, including vehicles for aircraft and passenger handling. #1030.25

The BiH Council of Ministers has cleared Tuzla and Mostar airports for cargo flights used for the export of products of animal origin. Last month, Tuzla Airport said it had reached an agreement with Turkish Airlines to run at least two weekly flights, operated by an Airbus A330-200 freighter aircraft, for the export of products of animal origin but required state clearance beforehand. Tuzla and Mostar have been eyeing the export of chilled beef to Turkey. Currently, only Banja Luka Airport is handling such shipments. In September, Banja Luka Airport said it would invest additional funds in improving cargo infrastructure at the airport, but warned that its operations could be jeopardised if Tuzla is issued cargo clearance. -- Meanwile, a fifrst meet transport left Tuzla Aiepoer on 1 June 2016. #1030.26

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In late 2015, the Bihać Municipal Council approved the creation of a public operator for Bihać Airport (JP Aerodrom Bihać). Amir Beganović has been appointed as acting CEO with the local government seeking to develop the existing airfield into a commercial airport. The municipality will invest about EUR 1 million in co-operation with a Turkish partner to develop the airport. Furthermore, local authorities hope to receive additional funding from the Federal government. -- Bihać would become Bosnia -Herzegovina's fifth international airport after Sarajevo, Tuzla, Mostar, and Banja Luka. The airport has a 1,200-m runway that can accommodate aircraft with up to 72 seats. Since the land around the airport is owned by the City, there should be no problems to extend the runway. The conceptual design of the project was created by the company Euroing from Bihać. To share the investment, the City government is planning to implement financing through public-private partnerships. Turkey’s Celebi Holding is one of the companies interested in becoming a risk-sharing partner. #1030.27

The airports in Podgorica and Sarajevo have recorded their busiest year on record in 2015, despite a disappointing December for the latter, affected by poor weather conditions which resulted in the cancellation of over a quarter of all flights throughout the month. Bosnia-Herzegovina's busiest airport reported that it handled 772,000 travellers, an increase of 8.7% compared with 2014. Despite the December hick-up, the airport has seen record figures throughout the year and has maintained its position as the ninth busiest in former Yugoslavia, fending off strong competition from Podgorica, from which it took over the position in 2015. Podgorica Airport also reached a milestone in 2015, handling 748,175 passengers, up 6.7% on the year before. "2015 will be remembered as the year Podgorica broke records on a monthly basis", the airport said. Aircraft movements grew 5% during the year. In contrast, Tivat Airport saw its numbers decrease slightly, 1.7% on its record 2014 result, welcoming 895,033 travellers. "The decline comes purely as a result of the Ukraine crisis, which had an impact on Montenegro's tourism industry as a whole. Therefore, we view this result as an achievement," the airport's operator said. Montenegro Airlines, which has aircraft based at both airports, saw its passenger numbers increase 4% on last year's 557,000 travellers. It operated 6% more flights during 2015. Sarajevo Airport entered 2016 with plans to improve its facilities and attract new carriers. In addition, the airport is expected to begin work on the construction of rapid exit taxiways and the expansion of its apron. #1030.28

MONTENEGRO The Government is preparing to open the country’s third international airport in the town of Nikšić. Over EUR 1.6 million have been invested in the airport’s redevelopment since work began in 2012. Local authorities have contributed several thousand euros for the construction of two taxiways and two aprons, while 85% of the funds were provided by the European Union Instrument for Pre-Accession Assistance. The airport’s runway, which is 1,450 m long, can accommodate regional aircraft such as the ATR. Currently, work is being carried out on the construction of a control tower, lighting system and a small terminal building. Local authorities hope to operate the airport jointly with a private enterprise through a public-private partnership agreement. -- Nikšić Airport was built 70 years ago and was used primarily for pilot training. Following the breakup of Yugoslavia, it fell into disuse. #1030.29

Work on a EUR 32 million expansion project at Tivat Airport has been approved by Airports of Montenegro, which runs the airport. The European Bank for Reconstruction & Development (EBRD) and the airport operator are set to finalize negotiations for a EUR 20 million loan that will be used as a means to finance part of the project. The China Road & Bridge Company (CRBC) has expressed interest to take part in the airport's redevelopment. Italy's Spea Engineering has been selected as the project management consultant. The expansion project includes the construction of a new

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13,000 m² terminal, extension of the manoeuvring area, and the rehabilitation and extension of the runway in order to achieve compliance with ICAO safety standards. Tivat Airport's capacity is insufficient to handle the demand during the peak summer season. It has been identified as a barrier to growth of the country’s tourism industry by limiting the access of international tourists to Montenegro. The project will address this issue by increasing handling capacity of the passenger terminal to 3 million travellers per year and adding a further nine aircraft stands that will provide sufficient capacity for the next ten years and improve service quality. The project is expected to promote private-sector involvement in non-aeronautical commercial activities at Tivat, incorporate innovative elements of advanced sustainable building technologies at the new terminal, and adopt internationally recognized certification for the airport's operations (Airport Carbon Accreditation). -- Tivat Airport's new-look tower has been described as an “architectural masterpiece”. Work was financed by the Serbia and Montenegro Air Traffic Services Agency (SMATSA), which controls the airspace of both countries. #1030.30

MACEDONIA Skopje’s ‘Alexander the Great Airport’ has won the ACI’s Airport Service Quality Award for best European airport with under 2 million passengers per year. It is the third time Skopje has won this award. As the industry’s most comprehensive customer service benchmarking tool, the ACI survey captures passengers’ immediate assessment from check in through departure at the gate at more than 285 airports. These awards represent passengers’ views on 34 key service areas and includes eight major categories such as access, check-in, security, airport facilities, food and beverage, retail and more. All participating airports use the same survey questions, creating an industry standard set of responses that allows participants to track and analyse their performance, as well as benchmark results against airports across the globe. All participating airports can view the survey results of all other participating airports on a confidential basis. -- The awards are presented in five categories that include: best airport by region, best improvement by region, best airport by size and region, and overall best airport by size. #1030.31

The operator of Macedonia's two international airports, Turkey's TAV, is still considering whether to build a cargo terminal in Štip, in the country's north-east as outlined in the concession agreement with the Macedonian government several years ago. Under the agreement, the cargo airport should be completed by 2020. TAV Holding CEO Sani Şener had said that the company is ready to start construction promptly after receiving the inspection results on air currents and wind directions. -- Construction of the cargo airport has been delayed for several years because experts have not completed the meteorology study on wind currents in the Štip and Sveti Nikole region. This study should show what would be the ideal and safest location to build a runway and whether the region is suitable for such an airport. #1030.32

ALBANIA China Everbright Ltd has announced that Keen Dynamics Ltd (KDL), its joint-venture with Friedmann Pacific Asset Management Ltd which focuses on global airport investments, has signed an agreement to acquire Tirana International Airport SHPK, the concessionary developer and operator of Tirana Airport. Upon closing of the deal, KDL will take over the airport concession until 2025 (with a two-year extension to 2027). Tirana is one of the fastest growing airports in Europe. The number of passengers increased from 600,000 in 2005 to 2 million in 2015. The airport in itself is testimony to Albania’s rapid economic development. Chen Shuang, CEO of CEL, said: “CEL is in the process of establishing its China Everbright Overseas Infrastructure Fund which eyes on global infrastructure opportunities, and the acquisition of Tirana

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International Airport (TIA) signs the first move. Upon completion of the deal, KDL, a controlled platform of COIF, will take complete charge of TIA. CEL and Friedmann Pacific possess long-term business partnership since their collaboration in the investment of China Aircraft Leasing Group Holdings Ltd. The joint investment this time brings together the financial resources and networks from CEL, together with the expertise in sourcing overseas airports from Friedmann Pacific, which results in a great synergy. Also, we believe that acquisition of the quality asset will create stable cash flow and good investment return to the company and its shareholders.” China is currently Albania’s third largest trading partner. Chinese Premier Li Keqiang and Albanian Prime Minister Edi Rama have pledged to enhance infrastructure co-operation of the two countries at the fourth leaders' meeting between China and Central and Eastern European countries (China-CEE Leaders’ Meeting) held in November 2015. China supports domestic companies in actively participating in Albania’s economic development, while Albania is keen to expand co-operation in agricultural trade and tourism and plans to streamline visa access for Chinese people. The TIA acquisition is also part of the corporate strategy to identify good infrastructure investment opportunities, which is in line with China’s Belt and Road Initiative. #1030.33

Other regions VIETNAM The State-owned Airports Corporation of Vietnam (ACV) has confirmed that complex preparatory work will delay the construction of the country's USD 15.8 billion airport near Ho Chi Minh City. In its recent report to the Ministry of Transport, the operator of 22 airports said work on Long Thanh Airport will likely start in April 2021. That will put the project in Dong Nai Province at least two years behind the original schedule. It is taking ACV longer than expected to finish all the pre- construction tasks for the megaproject, described as the ‘biggest ever’. The selection of consultants for the project's feasibility study, for instance, will not be completed until January 2017, about nine months behind the previous deadline. -- Long Thanh Airport, about 40 km from HCM City, is designed to serve 100 million passengers and five million tonnes of goods annually. It is expected to replace Tan Son Nhat, the country's currently biggest airport which reached its full capacity of 20 million passengers a year in 2013 already. #1030.34

GREAT BRITAIN London City airport has received planning permission from the new U.K. government for a GBP 344 million expansion. The privately-funded City Airport Development Programme (CADP), proposed by Pascall & Watson, includes plans for seven new aircraft stands, a parallel taxiway, a three-storey passenger pier, and a 260-bed hotel. Completion of the programme will enable the airport to welcome quieter, next generation aircraft and will enable the airport to welcome 6.5 million passengers by 2025. The approval comes months after former London Mayor Boris Johnson instructed Newham Council to refuse the application as “it does not adequately mitigate and manage its adverse noise impacts” (#1005.10). The airport said at the time it was “perplexed” and “disappointed” by the decision saying it went against everything the Mayor supports and promotes. LCY said the development will transform the airport, enabling it to welcome quieter aircraft, and add more capacity. The construction phase of development will create 500 jobs and a further 1,600 once completed. Under the plans the airport can add approximately a further 32,000 flights by 2025, movements which are already permitted, helping to unlock more air capacity within London’s airport system in advance of a new runway for the South East of England. LCY also aims to open up opportunities for airlines for longer-haul destinations including The Gulf and Middle East, Turkey, Russia, and the east coast of the United States.

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Philip Hammond MP, the Chancellor of the Exchequer, and Lord Ahmad of Wimbledon, Aviation Minister, confirmed the Government’s approval during a visit to the airport, following confirmation from Transport Secretary Chris Grayling and Communities Secretary Sajid Javid. Declan Collier, CEO, London City Airport, said: “Today, the new Government has shown it is ready to act in the best interests of the British economy. Expansion at London City Airport will create more than 2,000 new jobs in East London, add much-needed aviation capacity in the South East, and generate an additional GBP 750 million per year for the U.K. economy. As the airport serving by far the highest proportion of business travellers in the U.K. (52%), who do some GBP 11 billion of trade in Europe annually, today the Government has sent a strong message that London and the U.K. are very much open for business. I welcome the decision and look forward to delivering new airport capacity for the South East by 2019.” #1030.35