The South Korean government has endorsed a bid by the state-owned Incheon International Airport Corporation for the 25-year concession of Belgrade Nikola Tesla Airport. The Deputy Minister for Civil Aviation in the South Korean government, Suh Hoon-Taik, said, "We want to make it clear that we are very interested in this project. We are ready to apply our knowledge and expertise at Belgrade Airport". He added. "We are formulating a strategy to develop Nikola Tesla Airport into the main international hub in the Balkans. We want to expand capacity as quickly as possible. The average annual passenger growth at Belgrade Airport is 7%. Based on that, we want to formulate a high-quality plan that will expand the airport in line with the growth rate, while at the same time offer comfortable and seamless travel for all passengers".
Members of the South Korean Ministry of Land, Infrastructure and Transport met with their Serbian counterparts in Belgrade last week to discuss the concession in more detail. "If we win the concession we would also invest in human resources. The Incheon Airport Aviation Academy is one of the first training centers designated as an International Civil Aviation Organization (ICAO) regional training facility of excellence. We would like to train Serbian experts in this field as well as share our knowledge and experience in airport management. Furthermore, our win would attract other Korean companies to invest in Serbia", Mr Suh said. He added, "There is interest on both sides to establish scheduled flights between Korea and Serbia and we will undertake a study to determine if there is sufficient demand. The prerequisite for these flights is an Air Service Agreement, which was concluded with Serbia last year. I will also assist in increasing cooperation between Air Serbia and Korean carriers".
Incheon International Airport Corporation manages South Korea's busiest hub, which last year handled 57.7 million passengers and generated revenue of one billion euros. Its international expansion began in 2009 when it signed a consulting project to support the operation of Iraq’s new Erbil International Airport. It has since concluded 25 overseas contracts for projects in twelve countries. It was selected to provide operations consulting services for Istanbul's new airport, which is currently under construction and expected to be the world’s largest. It has also begun a consulting project for the development of a third terminal at Jakarta's Soekarno–Hatta International Airport. The Corporation also boasts projects in India, Russia, the Philippines, Uzbekistan, Bangladesh, Nepal, Cambodia, the Dominican Republic and Paraguay. It unsuccessfully bid for a concession of Zagreb Airport in 2011.
A total of 25 companies have progressed to the first phase of the bidding process for Belgrade Airport, which entails the submission of non-binding bids. The deadline for their submission has been set for May 15. The concession has generated strong interest from Asia, with companies and consortiums from China, Japan and India taking part.
Interesting. They don't seem to have any investments in Europe. They look like strong contender.
ReplyDeleteAnyone know their proposals for Zagreb Airport from a few years ago?
ReplyDeleteHad they won I'm sure we would have had scheduled flights to Seoul by now.
DeleteApparently it was one of the stronger bids. I doubt they would have downsized their project like the French.
DeleteTheir Zagreb strategy was entire fiasco, they had no clear plans how to develop Zagreb in to a regional hub or even promise of growth. It was all iffy.
DeleteI don't think they even managed to get in to the 2nd round. I think same will happen with Belgrade bid, if Serbia has smart people at the helm of their aviation they'll see they're dealing with complete time wasters and move on.
Turkish bids are most serious, Turks will offer concrete plans and will actually build a new terminal, even if there's no need for it, to ensure future growth.
TAV is normally very serious bidder and I think Serbian government should consider their bid very seriously. Of other bidders, they'll probably demand more than it is worth to Serbian government, this also includes Russian bids which I think will ultimately win, as political favor and not based on sound economic and commercial basis.
This is an interesting development, seems like Seoul really wants BEG.
ReplyDeleteLet's see what happens now. They will have to compete with the Chinese whose presence in Serbia is already extremely strong.
I hope BEG concession either goes to them or the Chinese, it would be really bad for us if a European company such as Fraport gets it.
Why would a European company be bad? I'm not talking about Fraport since I don't think that would be a positive development either but there are a couple of good European firms interested.
DeleteBecause the likelihood of that European company owning another airport close to Belgrade is much higher than it is for any Asian contender.
DeleteIt's always better to give it to someone who is far away, like the Chinese or the Koreans, because chances of them buying several airports in Europe is relatively small.
Because of that they will work much harder to make BEG a major player which is great news for both airlines that are currently based at the airport.
Fraport has improved lately. They have big plans for LJU, already started collaborating with LCC (see FR and W6 in FRA) and invested adequately in VAR/BOJ - huge difference.
DeleteI think most biding companies are good though.
Let's see what they do with the regional Greek airports. They've already announced major increases in fees for both passengers and airlines.
DeleteHowever, I do agree that most bidding companies are good.
The fact that they sent an official over to lobby for their bid shows that they are keen but I still think this is locked in for the Chinese.
ReplyDeleteI really hope BEG all the very best, but lets not jump to conclusions yet until the winner is announced. Everything sounds like a fairytale in the beginning just like when the new JU was born a couple of years ago.
ReplyDeleteBut, yeah on the other hand it would be great to have the Koreans.
Well it's logical. They are trying to sell their "product". I think we will really know what's planned once the concessionaire is determined and they sit down with the government to negotiate what will be done.
DeleteI wouldn't mind them but they don't have the best track record in Serbia. They run Yura and there are a lot of complaints of employee abuse and harassment. Apparently they forced factory workers to wear diapers so they wouldn't have to take toilet breaks.
ReplyDeleteYeah but these are two different investors. I highly doubt ICN management will force BEG employees to work like slaves. After all, Belgrade is not southern Serbia. Different standards apply.
DeleteMost if not all of those accusations came from fired workers, we all know how much people in Serbia like to work hard. Serbs and Koreans are two different worlds when it comes to working habits. Gov inspections were there and found nothing. not saying there is no abuse, there is in pretty much every company, but pretty sure these are all exaggerations or rumors.
DeleteAre you implying Serbs are bad workers and lazy? Is that why so many manage to find jobs in the West every year despite Serbia not being in the EU?
DeleteYou are so pretentious and your comment is disgusting.
Koreans make factory workers in Serbia wear diapers so as not to go to the toilet? Are you serious? This sounds extreme and ridiculous
DeleteI said "apparently". This was one of the complaints.
DeleteIn west Europe Koreans are known as very bad employers and allow themselves to treat employees as they are used to do it in Korea (surely not on satisfactory level).
DeleteThey believe they are Gods who walk on the Earth and all the others are nothing but servants.
I can imagine what they would be doing in Belgrade.
"@AnonymousApril 26, 2017 at 9:47 AM
DeleteAre you implying Serbs are bad workers and lazy? Is that why so many manage to find jobs in the West every year despite Serbia not being in the EU?
You are so pretentious and your comment is disgusting."
Do you have some figures to back your claim?
When the west serbian border is behind them, everybody seems to miraculously transform into a competent and hard working person .... I blame it on rakija ;-)
DeleteIt has nothing with nationality, but everything with mentality !
Anon 2.39
DeleteYou can check online to see the number of young people who leave Serbia every year. They do that because they find career opportunities elsewhere.
Don't be so lazy, do some research before coming here with your lame excuses.
@AnonymousApril 26, 2017 at 5:25 PM
DeleteIt is seem you're one that is lame and coming up with really bad excuses.
EU has strict immigration criteria, you just can't go and walk and get a job in the EU, you know, there are immigration controls.
You're confusing asylum applications with work, I know almost daily there's a flight out of Germany with Serbian passport holders returning to Belgrade, being deported.
Yes, there are some Serbians who leave for EU and Canada, where they get opportunities, but these are highly qualified individuals who applied for jobs and working visa, (highly skilled Masters degree or PHD graduates), not some schmock off the street.
and yes some 600 of such individuals left Serbia in 2016.
I wouldn't say that's a lot. There's like 30-40 000 Serbians working illegally in Croatia, I guess Croatia is in the EU.
But then again, there's just as many Bosniaks living and working in Croatia.
Every year thousands leave the country and not as asylum seekers as Serbs no longer have the right to do it.
DeleteHere you go. In seven years 300.000 people have moved out of Serbia.
Deletehttp://www.telegraf.rs/vesti/2525690-alarm-srbiju-za-7-godina-napustilo-300-000-ljudi-u-vrhu-smo-po-raseljavanju-mladih-i-obrazovanih-ljudi
I still don't get what you are trying to prove? That Serbs are lazy and bad workers?
ot: Alitalia unions have rejected the rescue plan. Any chance some of Etihad's Eur 900m fund could be invested in JU instead?
ReplyDeleteNot a chance, Etihad is looking to save as much money as they can. They even withdrew their A380s from BOM and MEL.
DeleteSources claim that when Hogan escapes EY will withdraw from its investments in other airlines and concentrate solely on EY which makes sense given recent events, AZ and AB. Even VA is a loss maker for EY always asking for cash handouts with no return on investment. Overall EY is in a precarious position compared to the behemoths of EK and QR.
DeleteAnon 9.19. Correction - MUM only not MEL.
EY also reducing overall flights to GVA
And what about Emirates drastically cutting frequencies and capacity to the US?
DeleteMEL was announced two days ago:
Deletehttp://onemileatatime.boardingarea.com/2017/04/24/etihad-a380-melbourne-discontinued/
What about EK? EY also about to announce reductions on flights to the US. The difference between EK and EY, EK is not handing out millions a day to pop up foreign airlines.
DeleteUnfortunately Hogans strategy has failed dismally
Anon 9.55 AM - thanks for the update.
DeleteI flew this sector 2 weeks ago in business class. Very good but nothing like EK
I heard that the onboard experience with EY has gone downhill, especially in terms of crew. Such a shame. Seems like QR is the only one that offers a truly phenomenal product.
Delete@9.19. Instead of Melbourne they are redeploying the A380 to Sydney meaning two daily Sydney flights with the A380
DeleteIt isn't a good time for EY now
DeleteQR has by far the worst workng conditions for the ME3.
DeleteEY was untll recently the better of the tree but they are in a bad situation right now.
Anon 12.09 PM - Flew QR a few months ago SYD to DOH economy. Really awful. Their product has really slipped in Yc in last 12 months. IFE uneventful and you might as well skip the meals. Crew OK. EK has the funkiest crew out of the ME3.
DeleteJames Hogan, President and Chief Executive of the Etihad Aviation Group, and Vice Chairman of Alitalia, said: “We deeply regret the Alitalia staff vote outcome, which means that all parties will lose: Alitalia’s employees, its customers and its shareholders, and ultimately also Italy, for which Alitalia is an ambassador all over the world.
Delete“Alitalia’s shareholders, including Etihad Airways, have provided vast amounts of financial and commercial support during the past three years. Jointly with the Italian shareholders, Etihad had reaffirmed its strong commitment and principal willingness to support the airline with a package worth nearly €2 billion in aggregate to help fund Alitalia’s new five-year business plan. A key condition to this commitment was that an agreed and concerted effort would be made by all interested parties, including the unions.
“The preliminary agreement with unions that was made possible and supported by the union leaders, Alitalia management, the Italian Prime Minister and three government ministers would have helped secure Alitalia’s future. The rejection of this agreement in the staff ballot is deeply disappointing.
“As a minority shareholder in Alitalia we support the Board’s decision today to convene a shareholder’s meeting on April 27, to start preparing the procedures provided by the law.”
Good news. May the best win.
ReplyDeleteTo me it will be most interesting to see how much money Serbia can get from this concession.
ReplyDeleteI am excited at the prospect of some real development and investment at BEG other than just some small upgrades and refurbishments. I hope the concessionaires don't keep the current management in place.
I am sure the CEO and all the G17+ employees will be the first to leave the airport once new owners move in.
DeleteHope so
DeleteAnd how about SNS employees? Like everywhere else, they are the most numerous and the most useless ones.
DeleteKeeping party members to their jobs would be one of the most mportnts conditions for the cosession winner...
DeleteThey will move to Sava Center or other places.
DeleteIf there is so much interest for the airport, you got to ask yourself was it smart privatizing it at all.
ReplyDeleteIt's a money maker. I am not for privatisation/concession. All they needed was a professional management.
DeleteGood news. I think the most important would be to attract new airlines and expand capacity.
ReplyDeleteIf they give it to the Koreans it could jepordize plans for Beijing-Belgrade route.
ReplyDeleteWhy? the two are not linked.
DeleteNot necessarily, the BEG-PEK flights were negotiated long before the concession was announced. Also, Hainan was one of three airlines to show interest so if they back down someone else will step in.
DeleteThe Korean embassy in Belgrade is becoming increasingly active in the country. They are promoting more and more their culture while there are some 200 Serbs who received scholarships to do their masters and PhD degrees in South Korea.
The fact they sent their delegation to Belgrade shows how serious they are.
We should have news on China - BEG flights on 16th May but I think it will actually be Beijing Capital Airlines and not Hainan itself. We will see.
DeleteA lot of interest from Asia. Indian company has formed a consortium with the Greek company that is also bidding for the airport.
ReplyDeleteI wonder what Mitsubishi will propose.
well, if they don't offer to open car factory in Serbia, I wouldn't talk to them
DeleteActually car making is their secondary and less profitable business but it's what they branded the best ;)
DeleteStill early but I'm glad they want to quickly expand the airport. What actually needs to be done at the airport?
ReplyDeleteA priority should be to build a new terminal.
DeleteAgree. I'm thinking build an entirely new facility
DeleteThe question is where?
DeleteMove the cargo facilities elsewhere and build a new terminal from A6 onward. There is more than enough space.
DeleteTower and cargo has to move to make room. It could take couple of years to move them, then 3 to 4 years to build new terminal in that area. It would take 5-10 years for new facility to be operational.
DeleteIs there realy demand for a new termnal?
DeleteImprovements on existing faciltieis can handle a lot more than the projected demand for the next decade.
What is the projected demand for the next decade?
DeleteMaximum 8 million assuming ASL and/or LCCs will contnue expanding rapidly.
DeleteThey are asking way too much for a new terminal to be considered anytime soon. Doubt anyone of the bidders will ge willing to splash out a near billion for Belgrade.
DeleteMax 8mil over a decade is about 4.8% annual growth. Doesn't sound like rapid expansion is planned. Then again all sorts of politicians had their wildly different estimates on airport growth.
DeleteA billion is not needed for a new terminal, not even close.
The Serbian government is asking for 400 million upfront plus an x amount per year (can't remeber the figure) for the concession so we are looking at 6 to 7 hundred million. Add in a new terminal than the figure gets close to 1 billion. So I was not suggesting that a new terminal would be 1 billion but the total expected to be invested by the winner would be close to 1 billion if they are expected to build a new terminal.
DeletePersonally I think the Serbian government will have to accept a lot less than what they are asking for especially if they are expecting major investment in the airport.
*remember
Deletegood news. good luck
ReplyDeletethis 7% annual growth is such a ridiculous figure. it was taken from some IATA study published at the end of 2015 where serbia is bundled with 3rd world countries with small economies, very little current traffic, strong population & GDP growth and very little regional alternatives like BEG has in budapest, osijek, niš, timisoara...
ReplyDeleteand if they are using this as a base for their offer they are likely to overinvest.
relying on unrealistic growth rates is one of the biggest mistakes foreign investors keep repeating when investing in serbia.
in reality there is no potential for 7% YoY growth for the next 20y. to be on the safe side it would be wiser for them to use projected GDP growth rates which are more modest and probably more realistic.
here is the source:
"Seven of the ten fastest-growing markets in percentage terms will be in Africa. The top ten will be: Malawi, Rwanda, Sierra Leone, Central African Republic, Serbia, Tanzania, Uganda, Papua New Guinea, Ethiopia and Vietnam. Each of these markets is expected to grow by 7-8% each year on average over the next 20 years, doubling in size each decade."
http://www.iata.org/pressroom/pr/Pages/2015-11-26-01.aspx
Well, truth be told BEG has had solid growth over the past 7 years with one or two years seeing weaker growth than initially predicted.
DeleteBEG growth 2006-2016
Delete2006: +9%
2007: +13%
2008: +5%
2009: -10%
2010: +13%
2011: +16%
2012: +8%
2013: +5%
2014: +31%
2015: +3%
2016: +3%
2017: +10% (so far)
Passengers in 2006: 2.222.445
Passengers in 2016: 4.924.992
So in a decade BEG already doubled its numbers.
So we can see that even before Air Serbia BEG was recording solid growth. In the period 14-16 we saw mixed growth because of Air Serbia's miscalculated moves. However, in 2017 things are going back to normal.
The growth so far this year is actually 12%, not 10%.
Deletehttp://www.b92.net/biz/vesti/srbija.php?yyyy=2017&mm=04&dd=26&nav_id=1254181
It's 10% according to the airport's website.
Deletethanks for figures, you are making a valid discussion point.
Deleteimho historicals are great because country was/is recovering, BEG didn't have LCCs, then jat converted to airserbia and started making a hub out of BEG (31%jump)
but i am skeptical how much is there room for growth for BEG? JU is downsizing, while bringing any more LCCs and stationing more of their planes would directly influence JU and pushed it into more troubled waters while JU's hub traffic ads 1mil pax. so 2015 and 2016 growth for me is more realistic figures.
any new loung hauls (china?) would be adding about 100k or 2%, but again i question how many long haul routes are out there for BEG to grab?
although i must admit i don't have a good explanation for 10% in 2017. with wizz new flights from mid may it should improve even more.
...AnonymousApril 26, 2017 at 11:24 AM
Deletehttp://www.b92.net/biz/vesti/srbija.php?yyyy=2017&mm=04&dd=26&nav_id=1254181
AnonymousApril 26, 2017 at 11:32 AM
It's 10% according to the airport's website....
In fact, the growth was 10% in Q1, but till April,21st jumped to 12%.
Petar, projections are relying on Serbia's GDP growing meaning that over time more Serbs will afford to travel more often than now. So if someone is travelling once a year now, next year he might travel twice or thrice.
DeleteIncheon is truly one of the best airports I have ever been to. It would be a great development if they managed to use their know-how and experience and apply it at BEG.
ReplyDeleteIt will be interesting to see how many companies actually bid.
ReplyDeleteAn oldie from our resident experts on here
ReplyDeletehttp://i.imgur.com/eI5pqOv.png
LOL
DeleteDid you just put a LOL on your own post?
DeleteNot me sorry but I see resident experts are not too happy when they are reminded of their expert opinions. This is not the first time.
DeleteGiven that it's a two minute difference I think it was you. Next time wait at least 20 minutes. ;)
DeleteAlso, that deal actually expired on 01.01.2017 so that other person was actually right. Big players only started to show interest when JU started paying at least a share of its bills.
DeleteGiven your little wink at the end, seems your post was actually featured. Great expert opinion btw.
DeleteHaha sure, you were not correct and I am sure you are the first to claim how they don't pay anything when it suits your argument. Sad really.
DeleteNo, I am just pointing out that when they were no paying anything there was no interest for a concession because no one would touch the airport.
DeleteNow that the deal has expired they are moving ahead with the concession.
Even our government was rational enough.
Nothing sad, just facts.
You do realize no company has actually sent a bid proposal yet, right? The '25 companies that have proceeded to the next stage' is just saying which companies of the ones who bought the tender documents are actually allowed to send bids. Let's wait and see.
DeleteI would go for a company that would increase the amount of airlines and frequencies at BEG. H and encourage new LCCs, as well as use their connections to stimulate new destinations. Developing airport infrastructure is also a must. Whatever company that may be.
ReplyDeleteEncouragng new LCCs is bad for Air Serbia. Does the goverment realy want that?
DeleteOT: Adria Airways posted this today on Instagram: "You can follow us to a new destination tomorrow, stay tuned!"
ReplyDeleteAny insider info?
It's not a new destination. Every few days they present a destination on Instagram with photos and an instgram story. First it was Paris, then Amsterdam. So they are referring to that, not a new destination int their netowrk.
DeleteDo any Asian companies have concession in South east Europe? Or beyond?
ReplyDeleteChinese have Tirana from recently.
DeleteChangi Airport Investments, the overseas investing arm of Singapore airport has a 20% stake in Budapest. Toulouse in France was bought by a Chinese/Hong Kong led consortium 2 years ago.
DeleteStill makes me laugh that the author of this blog still writes/copies from Serbian state controlled press that there's 25 separate bidders. The 3 Turkish companies are together, Fraport and Zurich probably together plus others. That will mean at most 10/11 non binding offers by the May 15 deadline.
"state controlled press" gosh.
Delete25 are listed on the Belgrade Airport website about concession which is the only relevant source. I guess when that changes in phase 1 then they will update the info. Your guesses and predictions are irrelevant.
An Indian compny along with the Greek GEK group won the consession for the new airport of HER.
DeleteWell I don't know who's gonna win this project but I truly hope they are gonna do something with the exterior of the airport , it looks so early 80's !!
ReplyDeleteOT: BEG will see interesting competition soon. Austria is lowering its taxes by 50% starting 01/01/2018:
ReplyDeletehttp://www.wingsjournal.com/iata-reduces-austrian-air-travel-tax
I hope the future concessionaire follows the same example and never increases the rates.
How is Vienna competition to Belgrade?
DeleteAttracting LCC and newer airlines, even OS launching more routes. BEG can simply copy the same model, ¿why not?
DeleteThey were most likely forced to do this because of BTS.
DeleteBratislava welcomed some 1.700.000 passengers last year. It has become somewhat of a cheap alternative to Vienna and Ryanair has build a solid network out of the airport.
That said, VIE has been one of the most expensive airports in Europe. Even with this reduction they are still going to be more expensive than most other airports in the wider region.
In aviation like everywhere else is political.You know why Frankfurt Airport is suddenly cooperating with Ryanair and Wizz? Because for many years the green party was lobbying against th Terminal 3 and the new runway. For some time now pax numbers are either stagnating or even declining. So, kind in panic, to justify the necessity of Terminal 3 a source of growth is needed.... Ryanair promised growth against discounts. Lucky for politicans (green party has joined the local government in 2013), there will be growth and the Terminal is justified. Such games are common, so don't look at the facts, search for some backroom deals or attachments on the agreement no one will see. I am sure the bid for Belgrade will taking into account many other aspects......
ReplyDelete