TAV Airports optimistic despite difficult operating climate

TAV Airports today revealed that its global airport network handled 3.3 million domestic and 1.1 million international passengers during the first three months of 2021.

The passenger total is 60% down on the corresponding period last year and was accompanied by a 50% drop in revenues.

TAV Airports Holding’s executive board member and CEO Sani Sener, noted: “Passenger traffic continued to be affected by pandemic related travel restrictions. Nevertheless, the first quarter is seasonally the weakest quarter in our business in terms of international traffic.

“For example, in the first quarter of 2019, TAV Airports had served only 10% of the total number of yearly passengers. Domestic traffic, which is not very seasonal has recovered faster than international traffic and has already reached 46% of 2019 levels in March 2021.”

TAV reveals that in order to respond to the drop in passenger levels, it took “very swift cost-cutting measures in 2020” and achieved significant cuts in its operating expenses.

Indeed, in the first quarter of 2021, the cost-cutting measures continued and amounted to around €21.4 million per month.

Sener says: “The Force Majeure application we had made to the Turkish State Airports Authority was finalised in February 2021, and we received two years of time extension for all Turkish airports and deferral of rent payments due in 2022 to 2024.

“In February, we also completed the Tunisia debt restructuring which we had been working on since 2015. As a result of the restructuring, the senior debt of TAV Tunisia which was €371 million  in third quarter of 2020 financials, fell to €233.6 million.

“Due to the reduction in debt, we booked a one-off gain of €109 million  in the first quarter of 2021. This gain which we obtained through productive negotiations with the lenders in Tunisia enabled us to end the first quarter with net profit of €62 million.”

He continues: “After the signing of the share purchase agreement for Almaty Airport, we worked on the completion of a series of legal and financial prerequisites necessary before share transfer could take place. The completion of these prerequisites has unfortunately taken longer than our initial assessments.

“The slowing effect of travel restrictions on the speed of doing business has caused this delay. Nevertheless, nearly all of these prerequisites are now complete and we already have pre-approval for the financing to be provided by IFC and EBRD for the project.

“Presently, there remains only one last prerequisite that we are still working on which has to do with certain environmental conditions for the airport. After the completion of this prerequisite, we will take over the airport and start operating it which we now expect to take place during the second quarter of 2021.

“The global vaccination effort is going at full speed and Turkish vaccination effort is also going strong with 20 million doses administered already.

“With good news on the vaccination front we are looking very much forward to the summer/fall season. With the continuation of good news flow regarding vaccination, we hope to see actively used airports during the season, which will shift towards the July-November period.”

Talking about TAV Airports’ initiatives to combat COVID-19, Sener said: “During the pandemic we prioritised the health of our employees and our passengers. We achieved very significant reductions in our expenses.

“We executed successful restructuring processes with banks and aviation authorities. Therefore, I believe TAV management and TAV employees have managed this crisis very well. I would like to thank our employees, our shareholders and all our business partners for supporting our global brand during these challenging times.”