TAV Looks to Global Airport Growth to Counter Istanbul Loss

  • Airport operator's CEO upbeat on 2016 outlook as traffic rises
  • Company close to signing pact on loan with IFC, SocGen

Turkey’s biggest airport operator is seeking to participate in auctions in South Asia, India, the U.S. and Africa to compensate for the loss in 2021 of its operations at Istanbul Ataturk, the airfield that makes up half of its revenue.

TAV has agreed with the Turkish government to receive compensation equal to its annual net income for each year the new Istanbul airport, being built by a group of five local contractors, is operational before the Ataturk airport concession ends, Chief Executive Officer Sani Sener told reporters in Istanbul on Monday. The builders plan to open the first terminal, which will handle 90 million passengers a year, in mid-2018. Among possible airports that TAV is considering is Manila in the Philippines, he said.

The company, formally known as TAV Havalimanlari Holding AS, wants to generate 70 percent of total revenue from non-aviation businesses such as ground-handling, information technology, maintenance and food catering in the long term, from 56 percent last year. It’s also open to welcoming more investors in the company, its units or the TAV Insaat construction business.

Sener said the guidance for 2016 is “upbeat” because it is based on January traffic data that was more than they had predicted.

Separately, TAV said it’s close to signing an accord on a 360 million-euro ($402 million) loan agreed from 2008 with lenders including International Finance Corp. and Societe Generale SA that will allow it not to repay debt for three years on its operations at Tunisia’s Monastir and Enfidha airports, where demand has suffered following terrorist attacks last year.

TAV shares rose as much as 1.5 percent to 15.02 liras, rebounding from the lowest closing level on Monday since December 2013, and was up 1 percent at 14.95 liras at 10:19 a.m. in Istanbul.

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