Zagreb terminal concession to enhance regional hub potential
Zagreb Airport handled 2.3 million passengers in 2011 – up from 2.1 million the previous year – and the investment in new infrastructure will facilitate its continued growth and potential as a regional hub. Peovic is a natural ambassador for Croatia and he is passionate about what his region has to offer. He can talk at length from its valuable and in some cases undiscovered tourist sites, to its growing business potential, as well as the importance of Zagreb Airport in realising this potential.
The 30-year concession agreement includes management of the existing and new terminals and related infrastructure, in addition to construction of the new terminal itself. Within three years, ZAIC will make a capital investment of €236 million in the first phase of the new facility – which will have an annual capacity of five million passengers – as well as an €88 million expenditure for regular maintenance. The investment is in the economic interest of Zagreb and Croatia as a whole, as Zagreb Airport has not seen any significant investment for more than 20 years.
Total concession fees over the 30-year period will amount to €1.94 billion (€534 million at present net value). The State requested compensation of €0.5 per passenger, but ZAIC offered more – €1.25 per passenger. Meanwhile, the tender documents stipulated a capacity in the first phase of 3.5 million passengers, so ZAIC also exceeded those requirements.
“The new Croatian Government evaluated ZAIC’s offer as exceptional and the decision on its adoption was unanimous,” commented Peovic. “Our French partners have properly assessed the current situation in the Croatian construction sector, so the offer is significantly better than what was required. Money will be saved in the long run, for when the airport reaches five million passengers – or in 20 years at the latest – the second phase must begin, which will expand capacity to eight million passengers.”
Following signing of the concession agreement, there will be a one-year period of reorganisation in which plans for construction of the new terminal will be finalised. Construction itself will take two years.
Impact on tourism
Tourism currently accounts for around 20% of Croatia’s GDP and the development of Zagreb Airport will play a significant role in increasing this further. Croatia’s accession to the EU is due to take place on 1 July 2013 – before the new terminal opens – and it plans to join the Schengen zone in 2015. “In this way, the Croatian capital will be as accessible to EU citizens as Prague, Budapest or Rome. On one hand, Zagreb will be able to fully use its business potential, but on the other hand, there are tourist attractions within a two-hour drive of Zagreb that are still largely unknown to many visitors, including the Plitvice Lakes National Park or Lonjsko Polje Nature Park,” said Peovic.
He also emphasised that this will not negatively impact on other tourist destinations, such as Dubrovnik, Split, Zadar, Rijeka and Pula.
In fact, on 15 & 16 March, ACI EUROPE Director General Olivier Jankovec visited the Croatian Minister for Transport and Croatian Minister for Tourism together with Tonci Peovic, as well as the CEOs of Dubrovnik Airport and Split Airport, Roko Tolic and Luksa Novak, to discuss airport development in Croatia as well as the Croatian regulatory framework in the context of next year’s accession of Croatia to the EU.
Zagreb Airport’s slogan is that it is the “gateway to South East Europe”. Its catchment area is enlarged thanks to an excellent highway system that enables passengers to reach the airport within a one-hour drive from the Adriatic Coast and parts of Slovenia and Hungary. “Today, Zagreb Airport, in partnership with Croatia Airlines, operates as a regional hub airport transferring passengers from the Adriatic coast to Western European routes. A big part of this is feeding routes for intercontinental traffic worldwide,” explained Peovic. “This is why we plan to establish Zagreb as an intercontinental point-to-point destination for global airlines, and to use Croatia Airlines as the operator for the intra-European travel of those passengers.”
New route support
Additionally, the low-cost segment only accounts for 12% of Zagreb’s traffic currently, and the airport would like to increase that proportion to 35%, making air travel accessible to more Croatian citizens, while also attracting year-round tourism to the region. easyJet currently operates three routes from Zagreb – to Dortmund, London-Gatwick and Paris-CDG, while germanwings operates to Zagreb from Cologne/Bonn and Stuttgart.
Zagreb Airport is targeting new routes to Australia, China, the Gulf region, Ireland, North America and Scandinavia, and has a scheme in place to support new routes by reducing airline start-up costs. This proactive approach shares the risk and is designed to enhance the possibility of route success. The airport may also look to offer additional marketing support.
“All the elements for development of an effective strategy are in place, because the new passenger terminal will provide more flexibility in pricing taking into account the needs of carriers and passengers. Zagreb Airport has already redefined its pricing policy for the carriers, but at this moment we face small possibilities to increase revenue from retail, catering and similar services,” commented Peovic.
Zagreb Airport is clearly entering a new, exciting and very ambitious phase in its development – one that will have a great impact on the city and its region. It will contribute significantly to tourism and bring in new business opportunities, capitalising on the air traffic potential of Croatia.