Monday, March 6, 2017

Major players interested in Belgrade Airport


The Serbian government has said it anticipates for a number of large international companies to bid for a 25-year concession of Belgrade Airport. Based on preliminary talks, some twenty major operators are expected to apply for the contract including the Spanish multinational Ferrovial, Germany's Fraport and Hotchtief, as well as the Schiphol Group from the Netherlands. "Belgrade Airport currently has the capacity to handle some seven million passengers. Based on our analysis of future air traffic development and trends, the airport should reach seventeen million travellers per year within the next 25 years. That means that capacity will have to double", the Ministry for Construction, Transport and Infrastructure said. It added, "Therefore, the future concessionaire is expected to invest hundreds of millions of euros into the airport for the development of an alternate runway and the expansion of terminal capacity".

Concession bidders for EX-YU airports - finalists

AirportBidders
Skopje and Ohrid
Vienna Airport

TAV

Hochtief

EGIS
Pristina
PAIC consortium

Fraport/Havalimanı Isletmeleri

Limak/Aeroport de Lyon
Zagreb
ZAIC consortium

Zurich Airport/Strabag
Ljubljana
Fraport

Vinci

Serbia's Prime Minister, Aleksandar Vučić, met with the Minister President of the German state of Hasse, Volker Bouffier, last week to discuss a potential bid from German airport operator Fraport. Hesse is the single largest shareholder in the company. "The arrival of Fraport, which operates Frankfurt Airport and holds interests in the running of other airports around the world, would enable further development of Belgrade’s international airport and stronger cargo volumes", Mr Vučić said. For its part, the German company noted, "Fraport is fundamentally interested in expanding its international portfolio through attractive airport privatisations. Therefore, we are continually scanning the global marketplace for new airport projects".

The deadline for the submission of non-binding bids for the financing, development, maintenance and management of infrastructure at Belgrade Airport has been set for April 11. The proposals will then be reviewed and evaluated, after which those that meet the requirements, and are scored the highest, will be invited to take part in phase two where they will have to submit binding bids within 75 calendar days. The Belgrade Airport concession is expected to bring a one-off payment of up to 400 million euros, plus an annual fee of eleven million euros to the state. Under the terms of the concession, the individual bidder, or if the bidder is a consortium, may not hold more than 20% of the share capital or the voting rights of the owner or concessionaire of an airport with more than one million passengers over a twelve month rolling period from January 1, 2016, which is located within a 450 kilometre radius from Belgrade Airport.

139 comments:

  1. It's interesting to see who will get the job. I would prefer a European company that has no stakes in any consortiums in the region, purely because it is much better for competition.

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    1. I agree. This would be the best solution. With ZAG and SOF fetting quite competative it's time for BEG to pick up the pace.

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  2. The airport should not be sold at all! unfortunately this government will sell it!

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    1. They have no choice. It is a condition of the IMF.

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    2. Actually, the airport is not being sold. It is given up for concession. After 25 years, it goes 100% back to the state, including all the improvements and development.

      BTW, why should it not be sold?

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    3. If the airport makes 25 million euros profit each year why would you give it up?

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    4. Getting rid of a politically appointed management would be enough to start with.

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    5. Anon at 10.21pm... here's why you would give a concession.

      You say that the airport makes EUR25M per year. That means you would give up EUR25M x 25 yrs = EUR625m.

      In return they would get an annual fee of EUR11M plus the one-off concession fee of EUR400M (which is a number often cited). Therefore, EUR11M x 25yrs = EUR275M + EUR400m = EUR675M.

      This is a a better outcome (EUR675M vs EUR625M) than if it was kept as is, not to mention the infrastructure investments and improvements that a concessionaire would provide over a 25 year period.

      In fact, a no brainer... that's why you would give it up

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    6. Over the years with more passengers your 11M profit would grow as well! In addition you can give it for concession at a later date and make the numbers look even better. Not to mention that you continue having ovnership over a strategic national belonging. I am afraid SNS will just eat up the immediate profit on some crazy idea and we will be left with nothing. 25 years is a damn long period!

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  3. No serious company will be interested in BEG as long as the deal between JU and the airport is in place.

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    1. Well that doesn't seem to be the case... and I don't know which deal you are talking about. JU has discounts based on the airport's incentives policy. Of course a future new operator can change all of that if they want to.

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    2. Plenty of serious companies want BEG, as can be seen. As the biggest and most profitable airport in ex-YU, it will always be the hen that lays the golden eggs for foreign investors. This will definitely be the biggest and most profitable airport acquisition transaction that has happened so far in ex-YU.

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  4. Schiphol is the best. They have the best organized big airport in Europe. I hope the concession is given to them.

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    1. Someone like Schipol Group would be interesting. Do they operate any other airport other than Schipol?

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    2. They manage airports in the Netherlands, as well as T4 at JFK and they have an alliance with Aeroports de Paris.

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  5. Again with the second runway. Why is the government so obsessed with a second runway? There is absolutely no need for that, even with 17 million passengers they predict in 25 years.

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    1. Well, if the investor agrees to build it, let them build it. Two runways are always better than one. Wont cost the government a cent. The whole point of a concession is to get as much out of the concessionaire during the stipulated period, as possible.

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    2. BEG will never need a 2nd runway. They just need efficient organization.

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    3. The real issue is that there is no space for a second runway.

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    4. If Gatwick Airport operates with just one runway and almost 40.000.000 pax/year why Belgrade couldn't?

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    5. Bingo !! I was waiting for someone to throw that one out....

      Same argument for the terminal - it doesnt need a new one at all - just needs better management, internal remod/redesign, better F&B and greater variety of shops.... and ofcourse, gates A6-10 to become on a par with the rest of the aerobridge gates.

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  6. wow Fraport actually bid for PRN too. Let's say Fraport gets the job. How would that affect Ljubljana and Belgrade as well?

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    1. They are not that close to affect each other.

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    2. I don't agree with that. They are close enough.

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  7. Schipol looks like a very strong candidate because they are in an alliance with ADP which won't be able to bid because of Zagreb Airport

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  8. Wonder what the development at ZAG would have been like had ZRH won the concession.

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    1. Their bid was rejected at the end because it was "incomplete" but the entire tender was marred by controversy and a lot of people believe the tender was fixed for the French. There is always a "what if". Could have been better, could have been worse. It may not be perfect but the good thing is that something good came out of it in the end.

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  9. Ferrovial is a bit out of the blue. They only manage airports in the UK.

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  10. Whoever it is I just hope they get rid of Vlaisavljevic & co and put a profession at the top.

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  11. UAE investor and VINCI should jointly form 49/51% company to operate Serbia and Montenegro airports under concession.

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  12. What happened to VInci? Weren't they quite interested for a while?

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  13. Please not Fraport...

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    1. Because LJU's numbers went down sharply afterwards.

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    2. That has nothing to do with Fraport. Their numbers actually went up after Fraport came in and then went down last year because of Adria.

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    3. True but Adria was on the brink of bankruptcy in 2015 and they could have foreseen that they would cut a lot of flights in 2016. They should have tried to attract other airlines, which they didn't.

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    4. Fraport will always put German interest ahead of any others.

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    5. Sadly, Fraport is involved much more than you think, and they will win most likely... They already sponsored ASL flights to St. Petersburg, Greek Eurobank they owns already has much influence in BEG, and most importantly, their Eurobank owns most of the land around BEG airport. It will be Fraport, you will see.

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    6. Anon 1:32: no man, you probably mixed it with VTB capital, look further at this article, don't write nonsenses man https://seenews.com/news/vtb-capital-eyes-investments-in-belgrade-airport-serbian-govt-555311

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    7. They built brand new terminals @ VAR and BOJ. What is so bad about Fraport?

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  14. Will they release the name of the bidders after the first round next month?

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    1. Since this is Serbia and all information leaks we will probably know even before the end of the first round exactly who made a bid, how much and what are their plans.

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    2. Haha true :D

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    3. We might even know who the winner is pretty soon am I right?

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    4. Yes, you are right. And it is not soon, it is known. From very beginning. Winner was actively involved in making Concessions rules and requirements.

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    5. Who then? Why all the Chinese riddles?

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  15. Lucky you if its not TAV

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    1. It can't be TAV. They are within a 450km radius from BEG.

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    2. TAV seems to be doing a good job in Skopje? Why would they be problematic in BEG?

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    3. TAV does good job for themselves but the state gets almost nothing out of SKP's success. They signed a very bad contract.

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  16. It's going to be a Chinese company. The same one that wanted Ljubljana Airport.

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  17. I have feeling that Vinci will be chosen. Other option is some Chinese or Arab company.

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  18. At least foreign airlines will be treated properly.

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    1. How are foreign airlines not treated well now? As far as I can see, more and more foreign airlines (especially LCCs) are adding flights to BEG.

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  19. Last paragraph of the article provides a few hints to understand how the Serbian government is influenced during the tender preparation process. Therefore I can imagine which company has the highest chance to win the tender. Good luck with the puzzle.

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    1. Can you give us a hint?

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    2. Important fact is "20%" in last paragraph.

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    3. So a French company considering they all seem to have around a 20% share in Zagreb?

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  20. I would go for a company that would increase the amount of airlines and frequencies at BEG. Have airlines pay fair fees based on the amount of traffic they generate. Encourage new LLCs. Use their connections to stimulate new destinations.

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  21. After Etihad decision to transform AiRSerbia in Low Cost Carrier we shall see consequences affecting Concession.

    And yes, decision is already made.

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    1. The plan is to make it a hybrid like all other European airlines on shorthauls and it will stay the same on jfk flights.

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    2. Would anyone be so kind to enlighten me which national flag carrier is hybrid?

      Also, how removal of first class on short haul fleet will affect long haul connection PAX to JFK?

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    3. Actually from what I hear a lot of routes will be unaffected by this and will stay as they are now (destinations like Paris, London, Middle East, Moscow). What will be affected is destinations like Tivat, Podgorica, Sofia...

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    4. Again, which serious national flag airline has such company policy?

      If that is correct it will be operational nightmare. Cretinism!

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    5. Anon 10:31 AM
      Swiss does the same on their european routes.

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    6. Croatia Airlines, Austrian, Adria, British Airways, SAS, Iberia...

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    7. My emphasis was on serious. Not the companies in Alliances or being feeder.
      AS is becoming "monster". National, flag, feeder, LCC, what is next?

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    8. BA, SAS, Iberia, Austrian not serious?

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    9. BA and Iberia are operating such poiicy through their feeders. BA through BA city fliers for example.
      Austrian is actually Lufthansa, and also has dedicated fleet for such operations.
      That is not their company policy. They have first class through all main fleet.

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    10. First of all JU has no first class on any of its aircraft. Air Serbia will still have business class just like most European airlines, it just won't be a dedicated cabin with different seats it will be the same as economy with a blocked middle seat. This is all still very much in the planning phase and absolutely nothing has been decided.

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    11. Seems that all these couch-CEOs have never flown in their lives. European flights are rather short flights, and most (if not all) big airlines have removed dedicated C-class seats from their regional-european flights. It just makes no sense. Instead, for those paying C-class, they adjust inventory on a as per need basis (move the curtain, keep the seat next to you free, etc). No need to fly an empty C-class when you can have paying Y-class pax in those seats. It just shows that Etihad had 0 experience with European flights/needs, and insisted on an middle East experience which CANNOT profitably be replicated in Europe. If that was the case, big/profitable/important airlines would be doing it as well.

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    12. ^^^

      I wouldnt say 0 experience but a not so stellar implementation of their plan.

      Im sure there is a niche for such a product in Europe, but not in Serbia.

      Problem is that JU could do alot better in terms of transit, but their seasonality of frequencies and destinations is not helping maintain a consistant transfer client network. Add to that the fleet and its harder to compete, however much a massive overhaul has happened. The fleet isnt exactly ideal for JU and its needs, needing some adjustment ie a ~90 seater aircraft.

      What is worrying is that the work JU has built up on being different from typical European major carriers will be undone.

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    13. Jbt AirZabari i ErBerlin pucaju po savovima, a neznalice iz Er Srbije prave profit. Malo pogledajte finansijske izvestaje ma kako namestene pre nego napisete jos neki glupavi prilog.

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    14. Boze kakav uvredljiv ton i recnik. Ako ne umes pristojno, ne umes nikako. Prostastvom samo slabis svoje tvrdnje.

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    15. You are welcome Air Serbia! I have been talking about adjusting your cabin to match your customers (and yield) for couple of years. Initial high end offer was effective to distance Air Serbia from Jat but it's time to get leaner and meaner. I was also vocal about scrapping sparse biz class on A330 and replacing it with two rows of 2-2-2 biz class + 2-3 rows of eco plus seats for additional revenue. Two or three rows of extra legroom seats could be offered upfront on narrowbody jets for more revenue bundled with say 30 mins of wifly or food combo once switch to Sabre is complete. Start charging for baggage and start food BoB. Reduce costs while growing topline at the same time. You are welcome!

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    16. Gee, what would the airline do without you AirCEO ? They are SOOOO lucky to have you giving them your free counsel. Imagine what your wisdom could do for an airline if you were actually employed at one, instead of giving it for free on a public website ?

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    17. We can't all be Elon Musk, but imagine the amount of cynicism served to him when he knocked on doors of established rocket institutions in Russia and the US when he decided to start SpaceX? Heaps more than in your message.

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    18. Sure thing Elon... whatever

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    19. That chap had some interesting ideas compared to Dane's Sky Au Pair "innovation".

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  22. Does any Chinese companies have concession in South east Europe? Or beyond?

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    1. What were the terms, how much did they pay?

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    2. The Hong Kong/Chinese Everbright Group bought the operator of TIA airport last year. The price of the deal was not disclosed and neither were the details. TIA used to be managed by Hochtief and they built them a nice new terminal but they withdrew from the operator.

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  23. Belgrade Airport stocks on the market have soared since the start of the concession process.

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    1. True. Today it was the highest since August 2015.

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  24. Arapi već uzeli aerodrom, sve dogovoreno.

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    1. Jel? Bas cudno.. a ovde ekipica mesecima pise kako francuska konsultantntska kuca sve priprema u korist francuskog ponudjaca.

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  25. I also think a deal has been made with the French already. It's likely to be Vinci or some consortium with Vinci and Buygues.

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  26. Can we expect the process to be completed this year?

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    1. Yes, this summer. Midyear.

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    2. Hmm,Mr. Vucic said he hopes that job will be finished until the end of year.

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    3. Well based on the deadlines they have issued the concession process will be completed during the summer. When they will seal the deal depends of course.

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    4. Do you mean 'seal' or 'steal' the deal?

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  27. OT: Croatia Airlines 9A-CTK flying for Adria today (JP365). Must be because of CRJ9 stuck in Lodz?

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  28. The best deal for Belgrade airport would be Arabtec Holding or other another company from the UAE.

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    1. I don't think the EU would allow that.

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    2. Why? Before you say because Etihad has a 49% stake in Air Serbia, there is absolutely no EU rule that forbids for an airline and airport to have a different investor coming from the same country.

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    3. Guy Arabtec builds builds, they don't manage airports.

      Second are you aware of how much money they lost when they presented their earnings two weeks ago? After that earnings report they walked away from their stalled Arabtec Tower on SZR, and took down billboard immediately.

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  29. The company that gets the concession will be the company that puts the most money in the Swiss bank accounts of the politicians. Exactly the same thing happened in Zagreb.

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    1. Ask your presidential candidate what will he do with the lump sum concession fee? Waste it on increasing public sector salaries or invest back into Air Serbia?

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  30. Maybe it will be SHS Aviation then announced those plans for Maribor Airport haha :D

    http://www.exyuaviation.com/2017/03/vlm-slovenia-to-launch-eleven-routes.html

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    1. +1 then they could reroute some of the A330s flying from Maribor to China via Belgrade :D

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    2. better via INI

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    3. or via Morava Airport

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  31. Good news for Belgrade Airport. I hope they find the best solution for their future expansion and development.

    Are there any other ex-Yu airports which might soon be put up for concession? What about Sarajevo, Dubrovnik or Split?

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  32. Nice photo of BEG there. I really hope the new operator finishes the overhaul of A gates and extends T2.

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    1. Overhaul of A gates is planned to be completed before the take over. This phase of works has already started.

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    2. Why was this investment initiated now, months before the concession? Should it not have been left to do for the new investor / concessioner?

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    3. There is a possibility that all concession offers will be rejected. You cannot just press pause on airport growth.
      In addition, this investment could only increase concession price.
      Or you can continue to believe your favorite conspiracy theories.

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  33. Which new airlines will we see this summer @ BEG?

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    1. Transavia, Atlas global, Air China/Hainan, Wizz Air will add frequencies, launch new routes and base a second plane, Arkia will boost capacity to B757. That's it for now.

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    2. Don't forget the phantom airline from Maribor that has announced flights to Belgrade this summer.

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    3. Confirmed A330. lol.

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    4. SHS Aviation

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    5. Air China/Hainan??? lol

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    6. Yes, you won't be loling in a few weeks time. You will have to use some of your other material.

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  34. You previously mentioned that BEG does not a 2nd runway, why? BEG will reach 10 million by 2020 and therefore more traffic will be seen.
    Flights to China might increase and if JU increases the fleet with more A330´s then 1 runway will not be enough.
    What if Wizz decide to base 2 or 3 more a/c?
    It´s better to built it now or sell one of the ghostly airports in the country and with the money focus entirely on BEG.

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    1. Get real man.

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    2. Istanbul-Sabiha Gökçen has one runway with nearly 30 mil pax... so BEG doesn't need second runway

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    3. Flights to China and an extra A330 in JU fleet equal four movement daily tops - that would be two takeoffs and two landings. So, hardly an issue.

      That said, I had a pleasure of circling over Ruma twice during rush hours before being cleared for final approach.

      Second runway might be required once JU fleet doubles.

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    4. Don't dis Ruma.

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  35. ...which does not mean that Istanbul-Sabiha would not have had a second, or even a third runway, if only it had been possible to build. What is possible and what is optimal - those are two different things.

    Both Vienna and Budapest got second runway while having around 2 mil. pax per year.

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  36. OT - OTP-BEG yesterday about 80 pax both ways on A319, lots of connections to Hamburg on the return leg.

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  37. What's the point of a second runway which Belgrade will not need until 2050, if ever? Blah...
    Secondly, 17 million pax in 25 years. That means continually adding 500,000 pax every single year for the next 2 & a half decades. Doubt it.
    Finally, I know Vucic is a German man, but better hope not to get Fraport. Fraport will only care about its agenda, which in my opinion isn't compatible with interests of Belgrade, or Serbia. I would keep my fingers crossed for Schipol if I were you.
    Good luck! And make them build the damn railway into the city! :)

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    1. I hope for a Chinese, Arab, or USA company.

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    2. I also think Schipol would be the best option. Chinese can be a hit or a miss.

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    3. NO!! No US company for the love of god, man! Lol! Thankfully they're not interested!

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    4. Why no USA company? Can help with more flights to USA.

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    5. US airports are horrible, disgusting even...

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    6. I was at SFO really recently, it was fine.

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  38. Fraport has too much money and it's buying out smaller airports. I believe that this consolidation is bad, just look at what they did in LJU. It will be Fraports province for 100 years and LJU is not benefiting from it.

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