TURKEY. TAV Airports Holding (TAV) posted a -6.0% year-on-year decline in duty free income to €113.0 million for the first half of 2016. While commercial results pale into insignificance given recent tragic events at the TAV-run Istanbul Atatürk International Airport, it is important to note the impact of terrorism and related security issues on airport revenues.
The fall was driven by a -14% decrease in Origin and Destination (O&D) passengers at Atatürk due to security concerns. Group income from food & beverage and other retail rose +6% to €52.9 million.
Duty free spending per passenger fell by -1% to €14.80, a decent result given the dilutive impact of the move away from O&D passengers to a more transit-led base in the wake of passenger fears,
Passenger numbers across the group’s airports increased by +3% year-on-year to 49 million (+2% international and +4% domestic). TAV has reforecast a total -20% decline in O&D traffic in 2016 at Istanbul Atatürk and a “significant decline” in group net profit, though it expects revenue to be stable.
TAV operates Istanbul Atatürk Airport, Ankara Esenboğa Airport, Izmir Adnan Menderes Airport (International) and Antalya Gazipaşa Airport in Turkey; plus an array of airports abroad (see table below).
TAV CEO and Executive Board Member Dr M. Sani Sener noted that security concerns were affecting passenger behaviour and that travel to Turkey had decreased in the wake of the recent attack.
Commenting on the atrocity, he said: “Words can’t express how saddened we are by the loss of our employees and passengers who lost their lives in the heinous attack on our airport. I extend my deepest condolences to their families and loved ones.
“In the aftermath of the attack all members of the TAV Airports family acted very professionally and opened the airport to operation in a very short amount of time. I would like to extend my deep gratitude to all members of the TAV Airports family who showed their support and solidarity in very trying times. We will work together and do our best to heal ourselves and continue serving our passengers as best as we can.”
Groupwide, TAV reported revenues of €503 million for the first six months, down -1%, and a -12% fall in EBITDA to €195 million.
“All measures are being taken to limit the decline in operational metrics and strict cost control measures are being implemented in response to the new situation,” the company said.
Sener noted that global security concerns were continuing to dominate the agenda in the global aviation sector. “We have been operating Atatürk Airport, the third-largest hub in Europe, since 2000 and we consider it our home,” he said. “While it is one of the best-protected places in our country as we see time and again all over the world, sometimes it is not possible to stop terror attacks.”
Sener said that from the company’s experience in 14 countries and 65 airports around the world, recovery from one-off security shocks is fast. “We operate in a resilient sector that reacts to crises with fast recoveries. We have experienced this many times in the past,” he said.
