The FINANCIAL — TAV Airports Holding (TAV) which operates major airports in Turkey and abroad posted a -6.0% year-on-year decline in duty free income to €113.0 million for the first half of 2016. 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.
“Global security concerns continue to dominate the agenda in the global aviation sector. Security concerns are affecting passenger behavior and decreasing travel to countries like ours with intense security issues”, TAV Airports Holding Executive Board Member & CEO Sani Sener said in a statement. “We have been operating Ataturk Airport, the third largest hub of Europe since year 2000 and we consider it our home. 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.
“From our experience in 14 countries and 65 airports around the world, we know that 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.
“The passenger weakness manifested itself especially in the second quarter but still the overall passengers increased 3% YTD in our portfolio. In this background, the passenger mix in Istanbul Ataturk Airport has shifted more towards transfer passengers with Origin and Destination (O&D) passengers showing more sensitivity to security risks. In this environment, we have completed the extension gates in Istanbul Ataturk Airport and the runway and taxiway rehabilitation works in Tbilisi Airport”, Sani Sener said.