Polish Airports company absorbs bankrupt airport to be LCC alternative for new Central Airport

Last month, the city of Radom concluded negotiations for the sale of Radom-Sadków Airport to PPL Polish Airports SE. The airport filed for bankruptcy to launch a forced sale procedure, for which PPL was indicated as the future buyer. The intention is that the Radom airport will act as a low-cost carrier (LCC) facility alongside the New Central Polish Airport, which will be built by PPL close to the city of Łódź.


Summary:

  • Polish Airports has taken on a bankrupt airport to act as a supplementary offer to the New Central Polish Airport that is planned to be the country’s new main gateway;
  • It is believed that the plan is to use Radom-Sadków as a facility purely for LCCs to complement operations at the new main hub airport;
  • The proposed new airport system for Poland will deliver much needed capacity, but could leave many existing airports with limited, or no traffic.

Developing Radom to fulfil that role will require PLN900 million (EUR207 million). Initial development is expected to span 20 months, increasing its capacity to three million passengers per annum and increasing to a total of nine million in the future.

The airport, which was originally a military base and which only opened for commercial operations in Jun-2014, was owned and operated by Port Lotniczy “RADOM” SA, a corporatised state limited company, incorporated in 1989.

The philosophy behind its commercial opening was that, situated in central Poland, en route the second largest city, Kraków, and Warsaw, it was well placed at an intersection of pan-European transport routes, and with the benefit of modernised rail track by 2020 between Radom and Warsaw. But it never really fired the public imagination, attracting less than 10,000 passengers in both 2016 and 2017.

MAP – Radom Sadków airport is located in the eastern part of the municipal community of Radom, in immediate vicinity of a ringroad which is the initial section of E371 national roadSource: Radom Airport website

Moreover, it has been sidelined completely by the New Central Polish Airport (NCPA), the idea for which has been debated since 2006 but only proposed seriously, and government-supported, since 2016. NCPA will be situated in Baranów, a village in Grodziak Mazowiecki County, some 37 km (23 miles) west of Warsaw on the Łódź road and quite close to Sochaczew, another military airport which was targeted for commercial operations a decade ago. The intention is to connect it to major cities across the country by high-speed rail.

MAP -The New Central Polish Airport will be located Baranów, a village in Grodziak Mazowiecki County, some 37 km (23 miles) west of WarsawSource: Google Maps

The USD7 billion NCPA will have an initial capacity of 45 million ppa rising to 100 mppa and is expected become the main hub of LOT Polish Airlines. The project for Radom to support the NCPA by way of a low-cost facility somewhat replicates the role that exists now with Modlin Airport and Warsaw Chopin Airport.

Modlin is situated 30 km to the northeast of Warsaw near Legionowo.  It was also a military airport and is now unashamedly almost 100% ‘low-cost’, that segment accounting for 99.7% of seat capacity (from one budget airline). After opening with runway deficiencies, which caused its temporary closure, it grew quickly in its first year but that growth has tailed off dramatically.

CHART – Warsaw Modlin Airport passenger numbers are currently hovering just below the three million passenger figureSource: CAPA – Centre for Aviation and Warsaw Modlin Airport reports

The Mazovia Voivodship has concluded there is little future for Modlin, owing to PPL’s decision to favour Radom as the supplementary airport for Warsaw but is considering legal action over a “suspicion of data distortion” that supported that decision.

Looking at the bigger picture, PPL’s resources include Warsaw Chopin Airport, the biggest Polish airport with 15.75 million passengers in 2017 and one of the biggest airports in Central and Eastern Europe. PPL’s airports are listed below.

The possible privatisation of PPL has occasionally been mooted in the past but such thoughts are not current. It was examined by CAPA as long ago as 2010 in a report (members-only) entitled: Polish Airports State Enterprise privatisation this year?