TAV: Spreading its wings

28 October 2005
Travellers may not have heard of TAV before they enter Istanbul Airport's Ataturk International Terminal, but they will be well aware of the local company by the time they leave. The airport specialist's blocky blue-and-white logo is emblazoned on just about every available surface throughout the terminal, in a bold exercise in brand awareness. A relatively new - but extremely ambitious - company, TAV is seeking to expand its operations rapidly at home and internationally, particularly in the Middle East.

TAV was established in 1997 from two of Turkey's biggest construction companies - Tepe Construction and Akfen Construction - along with Austria's Vienna Airport Company. The consortium was formed to secure the $400 million build-operate-transfer (BOT) contract to build and manage Istanbul's new international terminal. It was successful in winning the job, and completed the 189,000-square-metre terminal building and 179,000-square-metre car park in 22 months - eight months ahead of schedule. In January 2000, it began operating the facility.

TAV's success at Istanbul has provided the company with a solid base on which it has been able to build an impressive portfolio of airport projects in Turkey and elsewhere (see table). In June, the company signed a contract worth about $77 million to upgrade and operate Tblisi and Batumi airports in Georgia. That followed the award in December 2004 of a $350 million contract to build a third terminal at Cairo International Airport.

However, the company's most significant success to date came in June, when it secured a new 20-year concession to operate the entire Istanbul airport, covering both domestic and international terminals. The contract is worth about $3,000 million over the next 20 years and provides TAV with an even stronger platform for its planned international expansion.

'We could not leave this,' says TAV chairman and chief executive officer (CEO) Sani Sener. 'To be successful globally we must be successful at home. We probably paid more than we needed to in order to win it, but we had to.'

Currently, the international terminal at Istanbul is TAV's only airport operation contract. However, this will change in the coming year, once it completes construction of new terminals at Ankara and Izmir. It will then operate both, giving the company a clean sweep of Turkey's three biggest airports.

Its next goal is to focus on opportunities abroad. 'We see ourselves as a global company and are looking everywhere,' says Sener. 'The past five years have seen governments stop spending on infrastructure and opening up to private investors. So there are a lot of privatisation and construction tenders around the world.

'Our number one target is to get the privatisation of an airport in the EU. Of the 4,000 million passengers in the world, 1,000 million are in the EU. We have already tendered for Budapest and Prague.

'However, we are also looking at the Gulf. We are already involved in the construction of Dubai International Airport and are bidding [for construction packages] for Doha and Jeddah airports. We are also looking at Abu Dhabi.'

Sener is optimistic about the company's future as an operator. 'Our main business is in two areas,' says Sener. 'Operations, which includes terminal handling, ground handling, security, food and beverage operation and other aspects of terminal operation. And construction, which includes design and consulting, as well as construction. Our aim is to continue with the construction business and to develop the operations business.'

The largest element of operations, says Sener, is maintenance of the myriad systems needed to keep an airport building functioning. At Istanbul's international terminal, for example, TAV is responsible for maintaining 35 separate electrical, electronic and mechanical systems, including a baggage handl

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications