Athens represents something of an experiment in the airport industry because of the involvement of Hochtief AirPort, a wholly owned division of construction giant Hochteif. The German company is leading a consortium in a public-private partnership with the Greek Government which covers both the construction and the management of the new airport under a build-own-operate-transfer (BOOT) contract with a 25-year concession.
The project has benefited from substantial financial backing by Athens and Brussels, but does not come cheap. Fees are twice what they were at the old airport and three times that of some major competitors, such as Milan Malpensa. As Antonis Simigdalas, chief operating officer at Aegean Airways puts it: "The fact that it's so good makes it expensive."
Simigdalas puts much of the blame on the 25-year concession period, arguing that it should have been longer to allow investors more time to make a return on their capital. Dimitrios Gatsonis, head of division at Hochtief AirPort, comments: "The actual concession period is long enough to gain a sufficient return, provided the projected traffic takes place." Clearly this is now a big if given the industry downturn. He adds,"A longer concession period would allow for a higher return and lower charges."
The airport's chief business development officer, Dr Yiannis Paraschis, says it is not just a question of the concession period. "It is also a question of finance structure. Charges are debt driven. We are 65% debt-financed and we are paying interest from the first year," he says. "We have been in consultation with IATA for the last two years regarding fees. We have been very transparent."
Some observers argue, however, that the airport should have been built on a less ambitious scale, thus reducing costs, and thereby fees. One seasoned observer points out that, while it is "inevitable" that fees will be more expensive at a greenfield site than at an expanded facility, the degree of change depends on the cost of the facilities. He asks: "With 10 million or so passengers, do you need two runways?" He points out that London Gatwick, which has just one runway, carried in excess of 30 million passengers last year. Athens had around 13.6 million. Gatsonis retorts that the old Hellenikon Airport was already reaching its passenger and runway capacity limits, and that the option of having two runways from the start will prove more economical "in the long run."
Calls from the airlines for a helping hand met with only a limited response. Parking charges for heavy aircraft over 120t, night stops, or day-stops for long-haul are being reduced, with heavy aircraft also benefiting from reduced landing charges. However, operators say that this is not enough. Pointing towards the reductions for heavy aircraft and night stops, Simigdalas say that these reductions are not applicable for the majority of operators: "I think that overall, the effects of these reductions will be negligible."
For its part, the airport hints that further help could be in the pipeline, although again for a selected batch of operators - namely those operating on thin international routes. Pointing to the reduced traffic, as well as reduced expectations of traffic for 2002, the airport's chief executive, Dr Matthias Mitscherlich, says: "Within our own limited margins we tried to support the majority of our airline customers."
The combination of reduced and uncertain traffic expectations following 11 September, combined with high fees, may well impact future expansion plans. The traffic projection for 2002 is 11.5 million, 9% below the 2001 estimate.
The aiport currently has one satellite building and future expansion plans are built around the idea of adding more, but airlines warn they will not be happy if this is done before it is really needed. "I think that not only airports, but every provider should scratch the bottom of their barrels in order to find any possible economies anywhere," says Simigdalas. "That includes any plans for future capacity expansions, which may very well prove to be inconsistent with the new demand and traffic volumes and behaviours, and therefore unnecessary."
Gatsonis says that the aim prior to 11 September was to start building the next satellite building in 2006, but this is now "under review".
Source: Airline Business
