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SLOVAKIA'S STRUGGLING AIRPORTS WILL BE TRANSFORMED AND OFFERED FOR SALE

Investors to boost air travel

SLOVAKIA currently has the least developed air-transport sector of all EU candidate states, according to a recent survey by the EC's Eurostat statistics office. However, the country's Transport, Post, and Telecoms Ministry has unveiled plans to revive air travel, including splitting up the country's airports authority and seeking private investors for individual airports.
Under the ministry's proposal, the Slovak Airport Authority (SSL) should be divided into six state-owned stock companies, each operating one of Slovakia's airports. The country's two largest airports - in Bratislava and Košice - should be independent commercial enterprises by the end of this year, while the other four airports - in Poprad, Sliač, Piešťany, and Žilina - will be spun off in 2004.
Initially, the government will be the sole owner of stock in the companies. In the project's second phase, minority stakes are to be transferred to local and regional administrations with jurisdiction over the airports, and majority stakes will be offered to strategic investors. The restructuring should be completed by 2006, said Transport Minister Pavol Prokopovič.


AIR traffic controllers at Slovakia's airports have not always been busy.
photo: File photo

SLOVAKIA currently has the least developed air-transport sector of all EU candidate states, according to a recent survey by the EC's Eurostat statistics office. However, the country's Transport, Post, and Telecoms Ministry has unveiled plans to revive air travel, including splitting up the country's airports authority and seeking private investors for individual airports.

Under the ministry's proposal, the Slovak Airport Authority (SSL) should be divided into six state-owned stock companies, each operating one of Slovakia's airports. The country's two largest airports - in Bratislava and Košice - should be independent commercial enterprises by the end of this year, while the other four airports - in Poprad, Sliač, Piešťany, and Žilina - will be spun off in 2004.

Initially, the government will be the sole owner of stock in the companies. In the project's second phase, minority stakes are to be transferred to local and regional administrations with jurisdiction over the airports, and majority stakes will be offered to strategic investors. The restructuring should be completed by 2006, said Transport Minister Pavol Prokopovič.

The plan has already been welcomed by Bratislava municipal officials, who say opening the capital's Milan Rastislav Štefánik airport to strategic investors is the best way to find the financing needed to finish airport construction.

"We support transformation as early as possible, so that Bratislava airport is a joint-stock company by the end of the year," said Roman Filistein, head of the Bratislava regional government's transportation commission.

"We would like to set up a working group consisting of representatives of the ministry, the regional government, and the city council. It would prepare a development strategy for the airport," he said.

US-based airport operator Glenealy International, Argentina's Aeropuertos, and Vienna's Schwechat airport have already expressed interest in cooperating with Bratislava.

Schwechat officials see Bratislava airport, only 60 kilometres from the Austrian capital, as a natural partner. With lower operating costs, Bratislava could take over much of the cargo transport currently going through Schwechat, said Vienna airport officials. Air-cargo transport into Bratislava grew by 60 per cent last year, most of which was components for Volkswagen's Lozorno plant.

A Transport Ministry spokesperson said the restructuring plan grew out of talks last spring between the ministry and a group of aviation-industry representatives assembled by US congressman John Mica, a Florida Republican and chairman of the House aviation subcommittee.

The group, led by David Bilcliffe of Glenealy, recommended Slovakia take a more commercial approach and encourage public-private sector cooperation in developing the country's air transport.

"Compared with London's Gatwick [an airport smaller than Bratislava's but which handles over 28 million passengers per year], it is clear that the Bratislava airport is a very under-utilised asset," said Bilcliffe in the group's report, presented in May.

"With only modest investment, the airport could cater to long-haul flights and become a well-equipped European-standard international airport," he said.

Another Sk500 million (11.9 million euro) is needed to construct a hangar facility at the Bratislava airport, but there is plenty of room to grow. Passenger numbers topped 333,000 in 2002, a yearly growth of nearly 20 per cent, but the airport is built to handle 1.8 million passengers per year.

Although holiday charter travel led the growth in Bratislava, passenger numbers were up by 17 per cent on the year in east Slovakia's Košice, largely due to the opening of Slovak low-cost carrier SkyEurope in February 2002. Nearly 31,000 people flew SkyEurope's Bratislava-to-Košice link last year, while in 2001, fewer than 10,000 flew the same route operated by state-owned Slovak Airlines.

Despite the gains in passengers, Košice airport lost Sk3.7 million (88,000 euro) last year, after seeing profits of Sk5.9 million (140,000 euro) in 2001, mainly due to the declining value of the US dollar, the currency in which the airport charges most services. Košice is also behind schedule and over budget in constructing a second terminal building.

Originally slated to be finished early this year at a cost of Sk278 million (6.6 million euro), the terminal's opening date has been pushed back to the end of 2003, and will likely cost an additional Sk110 million (2.6 million euro).

Nevertheless, explained Košice airport director Marta Horváthová, the new terminal is necessary, since traffic at the airport is set to increase as EU entry nears.

"In the future, Košice airport will be the easternmost airport before the [common EU] border, so the importance of our airport is beginning to increase," said Horváthová, adding that some of the extra expense was to make the new terminal compliant with the EU Schengen agreement, allowing free movement of EU nationals within the union.

"I predict that in 10 years, around half a million travellers per year will go through the airport," she said. In 2002, Košice airport processed 162,000 passengers.

Development in air transport is also coming to central Slovakia, as the Sliač airport between Banská Bystrica and Zvolen prepares to open direct services to Prague in April or May.

Local business leaders and regional government officials have already been in negotiations with SkyEurope and Czech national carrier CSA on the route, and say that over 46,000 people in the area fly from Vienna's Schwechat airport to Prague every year.

They estimate that up to 90 per cent of the users of the Sliač-Prague line would continue on to further international destinations.

Although the development of Sliač is being led by local business leaders, they emphasize that a coordinated effort is needed between government officials and investors for the airport to work.

"I am apprehensive about the idea that the project will be run by members of the regional parliament. We are prepared to support the project, but not for the amusement of Bratislava or Banská Bystrica officials," said Vladimír Soták, head of the Slovak steel company Železiarne Podbrezová.

That firm, said Soták, has been investing Sk7 million (166,000 euro) per year in the airport and would need at least 6 tickets to Prague per week.

"We need guarantees that the money we are putting into the airport will make more money in the future," he said.

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