The international terminal at Istanbul Ataturk International Airport is a pleasant surprise: Luxurious without being overwhelming or tacky, with modern architecture, glass curtain walls, stainless steel and ceramic panel finishes, granite flooring, plenty of space and very, very cleaneven the toilets.
The terminal opened in January 2000 with an extension in May 2004. It has a capacity of 20 million passengers annually and covers 264,500 sq. m. on four levels comprising three principal levels plus a mezzanine. The extension, which added an annual passenger capacity of 6 million and lifted the number of boarding bridges from 18 to 23, also houses an art gallery, a hotel with 85 rooms and a fitness center.
There are 12 entrance doors, each with x-ray detectors for an initial screening of everybody, passengers as well as the visiting public, who enters the complex. A second screening takes place after passing through immigration and a last one before boarding the aircraft. The departure hall has 34 x-ray devices and 35 door detectors. There are 224 check-in counters in five zones, with 64 belonging to Turkish Airlines. Check-in runs on SITA's CUTE technology. SITA also provided its BagManager for the baggage reconciliation system at IST's international terminal, which holds 11 baggage carousels with most of the belts able to handle up to three arriving flights simultaneously. Several retail outlets are featured between the baggage carousels.
Shopping in the terminal is certainly at, if not above, Western standards, with a large duty-free mall on the departure level and duty-free shops on the arrivals level. In total there are some 5,300 sq. m. of shopping space and 8,500 sq. m. of catering outlets with 44 cafes, bars, restaurants and buffets. Catering seating capacity amounts to 4,500. There also are three banks, a pharmacy, a hairdresser, a florist, a massage spa, a shoeshine stand and a supervised child care facility.
"Generating aeronautical revenue is straightforward; you only need airlines and passengers. The tariffs are regulated," says Sani Sener, CEO and president of TAV Investment Holding, the private operator of Istanbul Ataturk International. "Where we differ [from the former state-controlled IST operator] is in the creation of nonaeronautical revenue. We are a lot more innovative in the approach of the commercial possibilities, which include a wider choice of all kinds of products and services on offer, including duty-free, catering [and] advertising. To give you just one example, we generate revenues of $25 million per year from advertising. Before we took over the operations of the international terminal, it was merely $1 million. We strive for an increased penetration of passengers in our retail outlets and a higher average spending per passenger."
One of the new offerings TAV introduced is its "prime class" CIP Service, which offers a Prime Pack option "for those who value comfort" and a Prime Select service encompassing "uniquely tailored solutions," according to its brochure. While Prime Select is, as its name indicates, more select, the Prime Pack is used widely, according to TAV. The CIP approach aims to eliminate all anxiety and stress a passenger may experience before and after the flight. It includes the possibility of, among others, use of a porter, a CIP reserved priority x-ray screening at the entrance of the terminal, CIP reserved priority check-in and passport procedures without having to queue with the rest of the "pack."
In 1997, the Turkish government took the unprecedented step of involving the private sector in the development of a new international terminal and adjacent car park at Ataturk Airport, which at that time had only one overcrowded terminal. Because airport operations were by tradition deemed a vital stateand often militaryfunction, the Directorate General of State Airports Authority (DHMI) opted to limit the scope of the project to less than five years.
DHMI, which resides under the Turkish Ministry of Transportation, first launched a competition for the design concept of the new terminal complex, open only to Turkish architectural companies. The winning design, by Turkish female architect Ebru Kanta in association with London-based British GMW Architects, formerly Gollins Melvin Ward Partnership, was the basis for the tender. TAV won the bid based on its offer to finance and construct the facility in return for a defined share of revenues from operation of the terminal and car park facility for a period of three years, eight months and 20 days.
TAVTepe Akfen VIE Investment Construction and Operationwas established for the purpose of responding to the build-operate-transfer tender by DHMI to construct the new international terminal and multistory car park at Ataturk Airport and operate the completed facility for a set period prior to handing it over to the State Airports Authority, Sener tells AE&T. Tepe and Akfen Holdings, two major Turkish industrial conglomerates, currently hold all the shares of TAV. VIE, operator of Vienna Airport, was minority shareholder with a 5% stake and was bought out by the two main shareholders in October 2004. The V in TAV now stands for Ventures. The company is planning an IPO in the third quarter.
"The international terminal and car park at IST was our first airport project, and it proved to be very successful," notes Sener. "According to the terms of the tender, we had to build the international terminal, car park and associated facilities at a cost of $306 million within a 30-month period. We completed it within budget and eight months ahead of schedule. The completion of a major airport terminal complex of this magnitude in less than two years time is unprecedented. The early completion also allowed for a faster transition to the operating stage."
In June 2000, the agreement was extended. Under the terms of the addendum, TAV had the responsibility to enlarge the new terminal by a further 30% by May 2004. In return, the Ministry of Transport prolonged the right for TAV to operate the terminal by 13 months 12 days until June 2005. The extension represented an additional investment of about $90 million.
The venture also proved financially successful "despite a set of negative events including SARS, the war in Iraq and the earthquakes hitting our country," says Sener. "We were able to pay back the loans and make some money because we have the correct strategy. We have strong HR, we apply the latest technologies, and above all there is a swift execution of all decisions and technologies. We were able to decrease costs while increasing revenue." It was a win-win, he reckons; "the government was prepared to follow up the BOT contract with a leasing agreement and we were keen to take on the contract." TAV won the tender and in July last year received the right to operate the international and domestic terminals for 15 years and five months. Price tag: A staggering $3 billion.
The company is investing $70 million in upgrading the domestic terminal, which before the opening of the new international terminal handled both domestic and international traffic. An underground passage with escalators and travelators connects the two structures. Says Sener, "We are aligning the facade of the domestic terminal with the modern look of the international terminal while simultaneously modernizing the baggage handling, check-in and flight information systems to streamline and speed up the passenger and baggage process." The commercial areas are being modernized as well. "In short, we are transmitting the operation principles of the international terminal to the domestic."
Transfer of Know-how
TAV is transferring its know-how outside Istanbul as well. "We gained a lot of expertise in building and operating an airport," says Sener, who thinks the company has a major competitive advantage because it offers a full spectrum of capabilities. "There aren't too many players that can do everything. There is Bouyges and Vinci but their origins are as huge construction companies, and Fraport's or ADP's main know-how is airport management. We can design, build, operate, and because we started from scratch we analyzed the total process with a new and more open view."
For now, Sener does not have worldwide ambitions for TAV and sees the Middle East and North Africa as its core geographical region. In Turkey, it was awarded the BOT project for Izmir Adnan Menderes Airport's international terminal and won the contract to construct and operate Ankara Esenboga's new domestic and international terminals. The two projects represent investments of E188 million and E125 million respectively. Across the border in Georgia, it is carrying out the $62 million BOT concept at Tbilisi Airport, including construction of a new terminal and expansion of the runway, while it committed investing $15 million at Batumi Airport for the right to operate the terminal for 15 years. To optimize its airport operations, it established a 100% owned subsidiary, TAV Information Technologies, that will integrate all the administrative, managerial and operational systems of its three Turkish airports and Tbilisi.
"The essential functions of the different airports which we operate will be carried out from one center," says Sener. "This will ensure an accurate and timely flow of information between the systems and therefore all resources, mainly personnel, are used in an optimum manner."
On the pure construction side, TAV gained contracts in Egypt for construction of Cairo Airport's new Terminal 3 (AE&T, Spring 2006) and won the design and construction tender held by Emirates Airline for the roof structural steel work at its new A380 maintenance hangar. To further expand its portfolio of airport-related activities, in June 2005 it acquired 60% of the shares of ground handling services company HAVAS.
Facts & Figures
Ataturk International Airport (IST)
- Is the major international airport in Istanbul and the busiest of Turkey's main airports with a 39% share of passenger traffic in 2005.
- Handled 21.13 million passengers in 2005, according to preliminary ACI data, up 21.6% on 2004. International passenger throughput was 10.17 million, up 15.8%, while domestic passengers rose 38.3% to 7.5 million.
- Is located on the European side of the city some 24 km. (15 mi.) southwest of the city center.
- Is named in honor of Mustafa Kemal Ataturk, founder of the modern Turkish republic.
- Shares air traffic to/from Istanbul with Sabiha Gokcen International Airport on the Asian side of the city and Hezarfen Airport. The latter only caters to domestic traffic while the former also supports international flights. It was opened in April 2001 and is named after Sabiha Gokcen (1913-2001), the world's first female fighter pilot. Recently, Sabiha Gokcen International is positioning itself as the city's primary no-frills airport: Condor and easyJet announced they will start operating there while Air Arabia launched twice-weekly flights from Sharjah at the end of May. SAW is operated by a private company, Airport Management & Aeronautical Industries.
- Some forecasts indicate the need for a fourth airport to accommodate growing traffic. It is planned to be located north of Istanbul in Kemerburgaz close to the Levent business district.