As we see more examples of airlines entering the airport business, we question… is this the start of a new phenomenon?

In the last month we have seen stories of one airline officially opening its own passenger terminal while another – a very large one at that – has let it be known it might take a stake in the second airport serving its home city. While this is nothing new, there does appear to be an increasing interest from airlines in the possibility of investing in the airports they serve.


  • A Middle East carrier (Jazeera Airways) has opened its own airport terminal and a major European one (Turkish Airlines) looks to invest in a mid-sized airport in its home city;
  • These are just two recent examples of the growing interest being shown by airlines in airports;
  • Historically, airline interest in operating or even owning terminals (or entire airports) is not uncommon although it is often a case of talk rather than action;
  • However, It is likely to increase while IATA continues to complain about airports being bought by the financial sector for the wrong reasons.

Airline interest in operating or even owning terminals (rarely, but occasionally entire airports) is not uncommon although historically it is often a case of talk rather than action. In the latest examples, Kuwait’s Jazeera Airways has spoken proudly of its “very own terminal” (T5) at Kuwait International Airport, which opened in May-2018, marking the first passenger terminal in the Middle East to be owned by an airline and the first terminal to be owned by a non-governmental airline.

As The Blue Swan Daily previously reported, Kuwait seems to be driving forward the privatisation ethos in the Middle East as it plays catch-up with competitors. Alongside the ‘Jazeera Terminal’ its Terminal 4 will be operated under a five-year USD130 million concession contract, by Korea’s Incheon International Airports Corporation.

CHART – Jazeera Airways is currently the second largest operator at Kuwait International Airport, but its capacity remains about half that provided by Kuwait AirwaysSource: CAPA – Centre for Aviation and OAG (data: w/c 27-Aug-2018)

Not to be outdone, Turkish Airlines is believed to be considering the purchase of a majority stake in Istanbul’s Sabiha Gökçen International Airport from Malaysia Airports Holdings Berhad for USD1.2 billion. On its interest in the facility in the eastern part of the conurbation, Turkish Airlines CEO Ilker Ayci stated: “We are interested in airport operator shares within our core business domain”.

It may appear to be a little strange that Turkish should want to buy into an airport where it has less than one third of the seat capacity, compared to over 80% at its Atatürk Airport base in the west of the city but the situation there is more complex than at Kuwait. Atatürk is to close when the Istanbul New Airport opens, and that procedure starts in Oct-2018.

CHART – Turkish Airlines has been growing its activities at Sabiha Gökçen International Airport to complement its hub operation at its Atatürk Airport base, and accounts for a third of the weekly capacitySource: CAPA – Centre for Aviation and OAG (data: w/c 27-Aug-2018)

The main shareholder at Atatürk, TAV Airports, which had the concession until 2021, is not represented at the new airport, which is the responsibility of a consortium of five Turkish companies. The ‘old guard’ has gone, the new airport won’t be capacity-constrained like Atatürk, and Turkish Airlines’ power will be subject to far greater competition.

It makes sense for Turkish to protect its interests at Sabiha Gökçen, possibly in conjunction with TAV Airports, which has previously expressed interest in Sabiha Gökçen and which will receive compensation for the closure of its Atatürk concession. Malaysia Airports Holdings Berhad (MAHB) has been considering the divestment of some, or all, of its stake in Sabiha Gökçen for some time so that it can invest closer to home.

LEARN MORE ABOUT AIRPORT PRIVATISATION… Airport Finance & Privatisation Review 2018  

In the same way, British Airways might be tempted to take a stake in London Gatwick Airport when the third runway gets underway at Heathrow. A sale of the French government’s stake in the Paris airports could prompt a reappraisal of Air France’s view on airport privatisation. Indeed, given IATA’s negative views on airport privatisation some of its member airlines could be forgiven for taking the line “you’ve got to be in it to win it.”

While our remarks on British Airways and Air France are merely speculative observations, it is surprising how many airlines are investors in airports, or have expressed a desire to be.

In the United States many home-based airlines lease terminals (and sub-lease parts of them) but there are very few examples of actual ownership. That wasn’t always the case though and one of the very first privatisers of airports was none other than Pan Am back in the 1960s.

Throughout the world the CAPA – Centre for Aviation Airport Investors Database identifies 44 airlines that at some time or other over the last 15 years have expressed an interest in investing in airports or at least taking on a management role – 14 are from Europe, 22 from Asia Pacific, three from Latin America, two each from North America and the Middle East and one from Africa.

While in most cases this interest has been nothing more than hot air. Some have gone on to make purchases, including, surprisingly, Ryanair; Lufthansa (Fraport) and Qatar Airways (Moscow Vnukovo Airport, MoU signed). Others at the other end of the scale include Bangkok Airways (three small Thai airports with possibly more investment to follow) and the UK’s Eastern Airways (Humberside Airport).