Authorities hope airport expansions will get off the ground

Fueled by the increasing presence of airlines, especially that of low-cost carriers, as well as by the authorities’ commitment to implement Schengen standards, Romanian airports have undergone various modernization projects over the past few years. In addition to this, promises of new commercial airports are pouring forth from politicians once again now that elections are looming. All this should make airport compounds and properties close to airports an attractive alternative investment.

Simona Bazavan

“Romania will be a construction site this year and I can guarantee you that this is a bet we are going to win,” said Anca Boagiu, minister of transport and infrastructure, during a transport conference last week. While Boagiu was mainly referring to the country’s network of roads and highways, Romania’s airport infrastructure could also well benefit from the same attention.

In addition to the two international airports in Bucharest, Henri Coanda International Airport and Bucharest Baneasa Aurel Vlaicu International Airport, there are another 15 commercial airports country-wide.

Out of these, only two, the international airport in Timisoara and the one in Cluj-Napoca, registered more than one million passengers last year. Fueled by the increasing presence of airlines, especially that of low-cost carriers that have included Romanian regional airports in their expansion programs, most of these regional airports have seen passenger increases in recent years and are confident that their number will continue to rise. All of Romania’s airports were built before 1990 and are in dire need of investment. While most of them have undergone various revamping projects in the past few years, work is still needed in order to bring them up to international standards and there still remains the question of having to build new commercial airports, a task that has proven impossible for the Romanian authorities so far.

“Since entering the European Union in 2007, all (Romanian) airports have come a long way but there is still room for improvement, especially at a regional level. Many airports have the potential to become key hubs for the airline industry. The airports where Wizz Air operates from are examples of operational efficiency, this being one decisive element when our company selects a future base,” said Balazs Varro, corporate communications manager at Wizz Air.

Wizz Air operates in Romania from three bases, Bucharest Baneasa, Timisoara and Cluj Napoca. The company has recently announced the opening of its fourth base, in Targu-Mures. In 2010, Wizz Air transported 2.2 million passengers to and from Romania.

Local airports undergo facelifts

Romania’s most important commercial airport, Henri Coanda International Airport, saw passenger traffic rise by almost ten percent last year, to about 4.9 million. The number is expected to reach 5.25 million by the end of 2011. Bucharest’s two airports are managed by the Ministry of Transport and Infrastructure through the Bucharest Airport National Company. The authorities’ current strategic program for the Otopeni airport runs from 2007 and 2022. Phase three of this program is expected to be finished in 2012 and requires an investment of EUR 150 million. The money is coming from the company’s own funds and credit. A banking consortium made up of Banca Comerciala Romana BCR and BRD – Groupe Societe Generale is granting a EUR 100 loan to finance the third phase of the airport’s development and expansion phase. The credit is granted for a ten-year period.

At the end of March the expansion project of the airport’s Finger departure terminal, including implementing Schengen standards, will be completed. Following this, works will start on expanding the international departure terminal, the future Schengen/non-Schengen departure terminal, which should be delivered in July 2012. Other works on redesigning the international arrivals and internal flights terminals into the new Schengen/non-Schengen arrival terminal should be completed by the end of December 2011.

Following all these infrastructure works, at the end of 2012 the Henri Coanda International Airport will have a capacity of 6 million passengers per year (from 4.5 million currently), 104 check-in desks (52 currently), 24 gates (10 currently), 6 baggage carousels (4 currently) and 14 jet bridges (6 currently). Overall, the airport’s level of services and comfort will be upgraded from a “C” category to “B”.

The long-term plan for the Baneasa airport, Bucharest’s second hub, is to transform it to host mainly business flights, announced Boagiu last year. With a EUR 1 million investment, the airport will be reorganized, and most flights taking off from Baneasa will have a reduced capacity of around eight to ten seats. The airport will have dedicated terminals for general aviation and VIPs. Other infrastructure works will accompany the transformation of the airport, such as the access infrastructure which will include an underground subway station and parking places. Low-cost flights are expected to be routed through Otopeni airport.

Regional airports across Romania have also seen various refurbishment and expansion projects over the last two years. Approximately RON 15.3 million was invested in building a new arrivals terminal at the Traian Vuia International Airport in Timisoara. “The terminal will be used for all non-Schengen arrivals and the investment included not only the greenfield building but also acquiring all the necessary equipment,” airport representatives told Business Review. The investment was financed by the Ministry of Transport.

For 2011 the airport management has big plans that include repairing the runway, upgrading and expanding the planes’ platform, modernizing the air station as well as building a new one and starting work on a nearby hotel. The airport management would like to start work this year but the budget for these projects hasn’t yet been approved.

In 2010 the Traian Vuia International Airport in Timisoara saw 1.14 million passengers, 17 percent more than the previous year.

All Romanian airports that transit fewer than one million passengers per year, which means roughly 13 of the existing 17 commercial airports, are managed by county councils while the rest come under the control of the Ministry of Transport and Infrastructure.

The Transilvania Targu Mures Airport had 74,893 passengers last year, 11 percent down on 2009. “In 2011 we plan to double this number to 150,000 passengers based on the contracts we have signed with various airlines,” airport representatives told Business Review. In the last few years, investments focused on upgrading the airport from a technological perspective. This included expanding the runway and the airport ramp, modernizing the lighting system and acquiring new equipment. “These technical measures were redoubled by a strategy to cut by half the airport fees for airline operators and an aggressive marketing plan that targets increasing the number of passengers to up to 450,000 per year,” airport representatives added.

New airports on the runway

In addition to upgrading existing infrastructure, the authorities have announced ambitious plans to build new airports, first mooted several years ago. So far, the projects remain on paper due to lack of financing and to red tape. Such is the case of the airport that should have been built in Brasov.

But over the coming years, Brasov could have not one, but two airports. First there is the project of a small scale airport supported by the local authorities in Brasov, whose mayor, George Scripcaru, is a member of the ruling Democratic Liberal Party (PDL). The project is also backed by central PDL authorities in Bucharest.

The second project is that of a larger international airport, the Brasov Ghimbav International Airport, this one being endorsed by the Brasov County Council whose president, Aristotel Cancescu, is a member of the National Liberal Party (PNL). This second project is also being lobbied for by local representatives of the Social Democratic Party (PSD). After year of debates over which project to chose, the authorities decided last year to give the green light to both projects and works should start this year.

Representatives of the Brasov County Council have announced that by the end of the month the public auction for the Brasov Ghimbav International Airport will be held. Several international companies and banks are interested in investing in the project, said Cancescu according to local media reports. He also stressed the fact that the investors will not be chosen based on the new PPP (public private partnership) law as it is “inapplicable and will remain so for at least the next six months” in his opinion. The new airport will cover a surface of 212 ha and will require an investment of EUR 60 million. Cancescu added that he is confident that the airport’s runway will be ready by June 2012.

Works on the Brasov Ghimbav International Airport could have started as early as 2007 when Canadian company Intelcan was selected to run the project. At that time the investment was set at EUR 100 million but the contract was re-written as Intelcan couldn’t find the necessary financing.

So far, Brasov County Council has spent RON 9.2 million on works on the site of the future airport. An additional EUR 2 million will be spent this year on changing the course of the Belsecin spring in the grounds of the airport.

Another airport is possible in Iasi. ”Currently there is a technical project for the building of a second airport in Iasi, following an investment of EUR 200 million,” Gheorghe Corjautanu, general manager of the Iasi Airport, told Business Review. The project is still in the process of finding the necessary financing.

simona.bazavan@business-review.ro

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