Financial News
Jason Corcoran
21 July 2008
Letter from Moscow
Marathon queues, stony-faced immigration officials, lost baggage and creaking infrastructure may soon be a thing of the past at Moscow’s main international airport, Sheremetyevo.
The airport, which hasn’t altered much since the Soviet era, is sprucing itself up and trying to improve its image as it prepares for a possible flotation.
Travellers no longer have to face up to three hours snarled in traffic on the Leningradsky highway into the city following the introduction last month of a direct rail link.
State-run Russian railway operator RZD invested more than $200m in the project, an amount matched by private investors. The public-private partnership is thought to be the biggest of its kind in Russia.
The shuttle train into central Moscow will depart from the new business district know as Moscow City, the equivalent of London’s Canary Wharf.
In a recent note to investors, Peter Håkansson, chairman of Swedish fund manager East Capital, said: “It will feel like a real luxury to have an exact travel time, compared with the current situation. The journey to the airport can take anything from 30 minutes to three hours.”
Håkansson is not the only relieved Russia cheerleader. Domestic investment banks regularly bus thousands of investors into Moscow and will be pleased to see a welcome mat being laid out and the demise of the local taxi mafia.
Sheremetyevo, the home of state carrier Aeroflot, has been losing business for years to Moscow’s other airports, Domodedovo and Vnukovo, as airline travel has boomed. Domodedovo, in particular, has raised the bar. It is Russia’s largest airport in terms of both cargo and passenger traffic with 18.76 million passengers last year – up 22% from 2006.
The airport is efficient, light, airy, and has had a rail link for a couple of years. Subsidiary companies dedicated to commercial real estate and hotels have turned the airport into a thriving retail operation.
As foreign airlines are presented with more options in the capital’s airports, they are searching for those with the best infrastructure, in the hope of attracting vital passengers in a market with shrinking margins.
German carrier Lufthansa, which flies to nine destinations from Moscow, switched operations from Sheremetyevo to Domodedovo in April.
The new Terminal 3 at Sheremetyevo, which is expected to open next spring, will serve anchor tenant Aeroflot, and other members of the SkyTeam Alliance including Alitalia, Air France, Delta, KLM and Korean Air.
The passenger capacity is 12 million a year and it is expected to reach its maximum capacity in a year after opening.
Sheremetyevo is a state-controlled entity and management hopes the Government will take the risk and sanction the proposed initial public offering, or the sale of stake to a strategic investor.
The company is bringing on board three independent directors as part of a government initiative to overhaul corporate governance at state-owned companies. Ruben Vardanyan, chairman of investment bank Troika Dialog, Anna Belova, deputy general director of Siberian Coal and Energy Company and Vladimir Dmitriyev, chairman of state development bank Vneshekonombank, will join Sheremetyevo’s board.
Sheremetyevo general director Mikhail Vasilenko said last month the company could be ready to float by the end of the year, when investors might be able to buy at least 25% of the airport’s stock.
The airport estimates its current value at $1.5bn to $2bn. If the Government approves the move, Sheremetyevo will be the first publicly held airport in Russia.
Showing posts with label Sheremetyevo. Show all posts
Showing posts with label Sheremetyevo. Show all posts
Tuesday, 22 July 2008
Saturday, 11 August 2007
Aer Rianta keen to mop up Moscow airport duty-free
The Irish Independent
By Jason Corcoran in Moscow
Thursday August 09 2007
THE overseas arm of Aer Rianta has confirmed it will compete with Russian state airline Aeroflot for control of a duty-free business in Moscow's main airport, Sheremetyevo.
Aer Rianta International, a subsidiary of Dublin Airport Authority, is a partner in a three-way business with Aeroflot and Sheremetyevo Airport Authority, which is selling up to concentrate on its core activities.
Eamon Foley, director general of Aer Rianta International, said the Irish operator is interested in bidding for Sheremeteyvo's stake outright or splitting it equally with Aeroflot.
Speaking in Moscow, Mr Ryan said: "We have a very comfortable relationship with our partners and we have built a very strong partnership with Aeroflot. Our joint venture is built on strong foundations and it benefits both parties.
"We bring an international dimension, and globally we have a huge buying power which our local partners do not have. There is no official sales process yet, so we are not clear how it will go."
A spokeswoman for Aeroflot said the airline was also interested in bidding, but much depended on the terms and the price. "It's too early to speculate on price and the negotiations which are just beginning," she said.
A former manager at Sheremetyevo suggested the 33.3pc stake could fetch $15m, while Aer Rianta is understood to think $12m is a fairer price.
The Aerofirst business consists of duty-free shops at Sheremetyevo-2 international terminal, as well as the Irish bar and the AeroShop onboard stores.
Sales at the location are close to $100m a year, although Sheremetyevo is facing intense competition for passengers from rival Moscow airports Domodedovo and Vnukovo.
Mr Foley declined to discuss the operation's profits, but said its principal asset is its concessions rights, which are due for renewal in a couple of years.
He hinted the Irish airport operator could also be interested in taking stakes in Russian airports, which are to be revamped under Russia's first major programme of public private partnerships (PPPs).
"We have experience as an equity investor in airports as well as airport management," explained Mr Foley.
"President Putin made investment in infrastructure such as airports a centrepiece of his recent State of the Union speech and we could yet be involved in that way."
www.independent.ie
By Jason Corcoran in Moscow
Thursday August 09 2007
THE overseas arm of Aer Rianta has confirmed it will compete with Russian state airline Aeroflot for control of a duty-free business in Moscow's main airport, Sheremetyevo.
Aer Rianta International, a subsidiary of Dublin Airport Authority, is a partner in a three-way business with Aeroflot and Sheremetyevo Airport Authority, which is selling up to concentrate on its core activities.
Eamon Foley, director general of Aer Rianta International, said the Irish operator is interested in bidding for Sheremeteyvo's stake outright or splitting it equally with Aeroflot.
Speaking in Moscow, Mr Ryan said: "We have a very comfortable relationship with our partners and we have built a very strong partnership with Aeroflot. Our joint venture is built on strong foundations and it benefits both parties.
"We bring an international dimension, and globally we have a huge buying power which our local partners do not have. There is no official sales process yet, so we are not clear how it will go."
A spokeswoman for Aeroflot said the airline was also interested in bidding, but much depended on the terms and the price. "It's too early to speculate on price and the negotiations which are just beginning," she said.
A former manager at Sheremetyevo suggested the 33.3pc stake could fetch $15m, while Aer Rianta is understood to think $12m is a fairer price.
The Aerofirst business consists of duty-free shops at Sheremetyevo-2 international terminal, as well as the Irish bar and the AeroShop onboard stores.
Sales at the location are close to $100m a year, although Sheremetyevo is facing intense competition for passengers from rival Moscow airports Domodedovo and Vnukovo.
Mr Foley declined to discuss the operation's profits, but said its principal asset is its concessions rights, which are due for renewal in a couple of years.
He hinted the Irish airport operator could also be interested in taking stakes in Russian airports, which are to be revamped under Russia's first major programme of public private partnerships (PPPs).
"We have experience as an equity investor in airports as well as airport management," explained Mr Foley.
"President Putin made investment in infrastructure such as airports a centrepiece of his recent State of the Union speech and we could yet be involved in that way."
www.independent.ie
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