Turkish Holding Intends Investing in Russian Airport Landscape

The Turkish Akfen Holding is interested in acquiring stakes in numerous Russian airports, despite sharply decreasing passenger numbers and reduced cargo volumes reported by Russian airlines.
The Turks wouldn’t be the first investors to set foot there.

Akfen’s business unit TAV Airports, which generates about 17% of the Turkish Holding’s total revenues, is keen to invest up to U.S.$300 million in Russian airports. This was confirmed to local media by Cuneyt Baltaogly, country manager Russia of Akfen. According to him, his enterprise is in talks with Moscow’s major hubs as well as some Siberian airports of whom he refused to mention their names.
However, when being confronted with Baltaogly’s announcement, managers of Domodedovo and the other Moscow airports declined to be in negotiations with the Turkish investor. 

Dynamic grouping process
Instead of developing its biz in a stand-alone approach there are mounting indications that TAV aims at joining one of the existing airport development consortiums to get its foot into the Russian door.
One such group is Novaporta that manages Novosibirsk Airport. Another consists of Germany’s Fraport, Moscow-headquartered VTB Capital and Greek developer Copelouzos that run Saint Petersburg’s Pulkovo Airport.
A third operator is 2007 established Basel Aero/Basic Element that runs the airports in Sochi, Krasnodar, Anapa and Gelendzhik. Currently, the Basel Aero managed airports account for 8% of overall passenger and 2% of the cargo traffic within Russia. In 2014, the passenger number of the Basel Aero airports grew by 25%, the tonnage of cargo and mail by 11%. Only recently, a consortium consisting of Basic Element, Singapore’s Changi Airport and Russian Fund RDIF has won a tender for Vladivostok Airport in Russia’s Far East

Shrinking markets lead to bigger units
Russia’s aviation sector is currently suffering severely as passenger numbers have dropped sharply just as cargo throughput did. To prevent losing biz and market shares as result of the unfavorable economic conditions the different groups of airport operators are attempting to expand their reach by acquiring stakes in “neutral” airports such as Krasnoyarsk, Irkutsk or Ufa.
This could be an opportunity for Turkish investor TAV to partner with one of the existing alliances and pump in big money to secure a slice of the Russian airport market. Funds in the region of $300 million should be a convincing “argument”.

Heiner Siegmund

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