Strategy project for Khabarovsk and Vladivostok airports finalized

Establishing two independent hubs in the Russian Far East

OJSC Khabarovsk Airport together with OJSC Sheremetyevo International Airport and Lufthansa Consulting, have now finalized the strategy project for Khabarovsk and Vladivostok airports. The German aviation consultants were commissioned as experts in multidisciplinary consulting projects to develop a joint strategy for the two airports. A key consideration in the process was the experience of airlines operating route networks with several hub airports.

Following the analysis, Lufthansa Consulting identified the option of establishing two independent aviation hubs in Khabarovsk and Vladivostok as the most favorable – both for the airports and for the socio-economic development of the Russian Far East.

The Far East of Russia is a promising aviation market with high traffic potential which requires development. Consequently the two airports offer exciting opportunities for airlines. Khabarovsk Novy Airport (KHV) aims to develop a domestic hub function for passengers and cargo in the Far East. Vladivostok Knevichi Airport (VVO) will focus on the international passenger and cargo segments. Both airports will, however, also be integrated into the domestic or international markets with distinct direct routes.

Consistent implementation of the new strategies is expected to increase the annual passenger volume to approximately 5.5 million passengers and the annual cargo volume to about 120 thousand tons for both airports in total by 2015. The precondition for this level of growth is significant market potential in the transit passenger and air cargo field realized through route development as well as infrastructure reconstruction in regards to terminals and aerodromes. The reconstruction at VVO is already in the final stages.

The strategy project started in July 2010 and comprised five modules: a technical infrastructure assessment, a detailed market and passenger flow analysis, the development of cargo and passenger traffic strategies for both airports as well as the identification of required infrastructure developments and the evaluation of potential fields of cooperation between the airports and the regional and federal governments.

The Lufthansa Consulting team has been working in close contact with the clients and other airport-related parties. Various possible network operation models of the two airports were carefully investigated and evaluated in order to identify the strategy that maximizes the air transport and economic potential of the Russian Far East. In addition, the consultants reviewed the existing governmental development programs and concept papers for the region to determine the most beneficial forms of public-private partnership.

Background information:

OJSC “Khabarovsk airport” was established in accordance with the Decree of the Government of the Khabarovskiy Region dated 2 October 2005. In 2006 100% shares of “Khabarovsk airport” were consolidated by CJSC “Alliance-Prom”. In 2010, the “Alliance-Prom” sold the shares to “Khabarovsk airport”, and now owners of the company are the company “Quartz-Iivest” (75.0002%) and Panadero Investments Ltd. (24.9998%), managing partner Mr. Konstantin Basiuk. Khabarovsk Airport (Noviy) is the largest air hub in the Far East of Russia. In 2010 the airport handled about 1.4 million passengers. In 2009 and 2010 Khabarovsk Airport became the winner in the contest “Best Airport the CIS countries” in the nomination “Airport with an annual volume of traffic more than 1 million passengers”.

JSC “Sheremetyevo International Airport” – Russia’s largest airport servicing international flights. 100% shares of the airport state-owned. The route network of Sheremetyevo International Airport is more than 200 destinations. Airport in 2010 handled 19,329,000 passengers. JSC “Sheremetyevo International Airport” owns 52.2% of the shares of OAO “Vladivostok International Airport.”

Currently, Vladivostok Airport is completing construction of a new passenger terminal area encompassing ??50 thousand square meters. This includes the final interior design as well as the installation of engineering equipment and communications. Reconstruction of the apron, construction of a new ATC tower, two fueling facilities, access roads and railways are in process. In May 2011 the first runway (Runway 1) opened after reconstruction.

The new terminal will include a terminal building for domestic and international airlines, and complex process facilities able to serve 1,360 people per hour or up to 5 million passengers per annum. 190 million U.S. dollars have been invested into the project. The construction is being financed by SVO and borrowed funds.