This article first appeared in The Edge Financial Daily, on July 27, 2016.
KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) said it remains confident about the growth prospects of Istanbul Sabiha Gokcen International Airport (ISGA) in Turkey this year, being the fastest-growing airport in Europe for more than five years and consistently recording double-digit passenger growth. This is despite ongoing political uncertainties and terrorist threats in the country.
In an interview with The Edge Financial Daily on July 9, MAHB managing director Datuk Badlisham Ghazali said ISGA is expected to turn around its operations this year.
“ISGA remains in very close contact with the [Turkish] government and security authorities, and this has played a crucial role in keeping ISGA open throughout the difficult period last week,” MAHB told The Edge Financial Daily via email. On July 15, a coup d’état was attempted in Turkey against the government but ultimately failed.
“This close cooperation is to continue as it has proven itself over the last eight years we have been operating in Turkey. Measures were already in place to deal with such eventualities,” the airport operator said.
MAHB said the passenger numbers at ISGA rose 11% to 16 million passengers as at July 21, 2016, compared with one year ago.
“ISGA’s market is mainly domestic and regional traffic, with the ratio of domestic passengers to regional/international passengers at close to 70:30. We are pleased to see that passenger traffic movement data from ISGA is showing a positive indication of the normalisation of airport operations, whereby the July daily average passenger movement before and after the attempted coup remains in the range of between 85,000 and 86,000,” it added.
Going forward, MAHB said more focus will be put in place for cost control, revenue optimisation and operational efficiency to enable growth at ISGA.
“The capacity expansion plan is still ongoing to further support the anticipated traffic growth. There will be an additional rapid-exit taxiway (Rets) to the runway system scheduled to be completed by end-2016 as well as other Rets scheduled to be completed in 2017. Coupled with the scheduled construction of the second runway, these capacity expansion initiatives will alleviate peak-hour pressures and thus be a strong contributor to ISGA’s further growth,” it said.
Other key positives include the normalisation of ties between Russia and Turkey, whereby the Russian government has lifted the ban on its citizens entering Turkey. With this, it can be expected that charter flights will soon be mounted from Russia to Turkey, some of which ISGA stands to benefit from, said MAHB.
On whether MAHB may pull out its investment in Turkey, the airport operator said it is prudent in all of its overseas investments.
“We are also cognisant that investments in infrastructure assets are long-term in nature. We feel that the economic fundamentals of our investment in Turkey remain strong, and we are encouraged by the fast action of the Turkish government in arresting the issues and the strong support of the Turkish public,” it added.
“As an airport operator, we are ever mindful of the many types of security threats that could affect the safety of our airport users and our business operations and thus have had measures in place to provide for such eventualities. Especially so as such violent and armed incidents have been occurring in many countries within the last six to 12 months.
“With the unprecedented escalation of such incidents, additional security measures already implemented include increasing the number of security personnel, police patrols, additional roadblocks for vehicles entering the airport, as well as security screening for both passengers and non-passengers at the terminal entrance,” said MAHB.
MAHB’s share price had fallen as much as 9.8% to its three-month low of RM5.81 last Friday, from RM6.44 on July 15, as the Turkey uncertainties spooked investors. The stock closed up two sen or 0.34% at RM5.85 yesterday, giving it a market value of RM9.69 billion.