Introduction
Athens is the capital city of and also the largest city in Greece. Ancient classical Athens was a great urban center that grew during the expansion of the trading port that was Piraeus. It was a global center for philosophy, arts, and learning (Athens History 2019). In the modern world, it is generally thought to be the fountain of modern civilization and democracy as a result of its systemic and societal influence on the Roman Empire and Europe as a whole. Today, Athens is a big metropolis with a central role in the cultural, economic, political, financial, maritime, and industrial life of Greece.
Istanbul is the city with the highest population in Turkey. It serves as an economic, historical, and cultural center. It is currently ranked fifth among the most popular tourist destinations in the world, its biggest attraction being its historic center. The city also houses the headquarters of various Turkish organizations and contributes more than twenty-five percent of Turkey’s gross domestic product.
These two cities are important economic giants located in the same geographical area. They are significant contributors in the fields of commerce and especially tourism (Ciommi et al. 2018, p. 2765). To drive their position and make them stronger in the region, both cities have modern airports intended to drive growth now and in the future. In spite of these efforts, Athens Airport has continued to face challenges that prevent it from meeting its actual potential while Istanbul Airport has grown to become one of the leading hubs in the global air services scene. Modern physical designs and technology, aggressive marketing, and increased capacity for handling passenger traffic are key considerations when setting up an airport and positioning it to become a global hub in both domestic and international aviation.
Consequences of Physical Design and Capacity Limitations for an Airport
The facilities are upgrades from previous international airports, with the key driving force being the limitation of its air services, especially passengers and cargo. Additionally, both of their predecessors lacked advanced designs to ensure maximum output in terms of passenger and cargo handling. This involves runways, terminal designs, and access from the catchment areas.
Athens Airport
Athens International Airport is the biggest international airport in Greece. It has been in operation since the year 2001 and is the chief base of Aegean Airlines and other Greek airlines (The Airport Company 2019). The airport was built as a replacement for the previous Athens International Airport, which was abandoned due to physical space restrictions. The airport’s major characteristics include two long runways and awaiting the lifting of legal restrictions by the Federal Aviation Administration and the European Aviation Safety Agency to allow it to handle some of the largest passenger jets worldwide.
The airport currently operates two terminals. These are the main and the satellite terminals. The satellite terminal is linked to the main terminal by an underground link. The airport is designed to have the capacity for extension in a modular manner in the future to accommodate increasing air travelers (The Airport Company 2019). The extensions are structured in a six-phase approach. The first phase, which is the current one, enables the airport to handle 26 million passengers annually (The Airport Company 2019). At its initiation, the current phase could handle 16 million passengers annually but has grown without necessitating progression to the next phase as a result of the employment of advanced information technology logistics (The Airport Company 2019). The 6th expansion phase will enable the airport to handle about 50 million passengers annually (The Airport Company 2019). To support this projected passenger traffic, the existing parallel runway module was designed with such numbers in mind. Athens International airport is accessible by road, metro, and railway.
Istanbul Airport
Istanbul airport is the chief international airport that serves Istanbul. The airport began operations in 2019 after the closure of Istanbul Atatürk airport. The new Istanbul airport was due to the previous airport’s operational restrictions. It lacked space for the construction of another runway, the growth of the city limited its growth, and there was worsening traffic congestion. Furthermore, there were political restrictions on additional charter or cargo flights to the airport. The new airport was therefore located north of central Istanbul, where there was ample space for expansion.
The construction of the new airport is being undertaken in stages, with expansion being rolled out over time. The first phase consists of the main terminal that can handle 90 million passengers annually (Anadolu Agency 2019). The airport will also employ the two parallel runway system, and these will terminate next to eight taxiways. The project is scheduled for completion in 2027, at which point the airport will have eight runways, 16 taxiways, and a passenger capacity of 150 million annually with room for expansion to 200 million passengers (McKernan 2019). Currently, the airport has one operational terminal being serviced by four runways.
Critical Assessment
The previous Athens international airport could handle 11 million passengers annually (Anadolu Agency 2019). This capacity offered a limitation in the number of passengers that could be handled through the airport in the face of a rapidly expanding Athens driven chiefly by the tourism industry. The airport’s main operational restrictions were that it could not handle larger passenger jets and therefore needed upgraded modern runways. It was also limited in terms of infrastructure linking it to the city of Athens. These limitations led to congestion of passengers, strained support infrastructure and poor customer satisfaction at the airport, therefore, necessitating the construction of the new airport.
The new Athens airport still has the capacity and design limitations when compared to Istanbul international airport. Athens Airport can handle 16 million passengers, while the Istanbul airport can handle 90 million passengers annually (Anadolu Agency 2019). This difference in capacity is determined by the difference in the design of terminal sizes and passenger handling facilities. It is a significant difference that makes Istanbul a preferred destination, as opposed to Athens, with far more superior passenger handling capabilities. The larger passenger terminal at Istanbul provides enough space to handle large passenger volumes and as a result, Istanbul airport is thriving while Athens faces challenges.
Airport Strategy
Athens Airport
Athens Airport is managed through a public-private partnership management model that involves the Greek state through Athens Airport SA and the private sector in a 55% to 45% stake agreement, respectively (The Airport Company 2019). Private investors include PSP investments, a Canadian company, and the Copelouzos Group. Athens Airport saw a growth in profits before tax and operating revenue and ADF in 2018 as compared to 2017 (Facts and Figures 2019). The company’s expenditure has increased through its absorption of more long-term debt and the upgrading of its facilities (Facts and Figures 2019). Profit before tax grew by 19.9% from 2017 to 2018 while operating revenue and ADF grew by 8.9% from 2017 to 2018 (Facts and Figures 2019). The year 2016 was significant for Athens Airport in both the international and domestic scenes. In that year, the airport was able to surpass its target of handling 20 million passengers annually (Facts and Figures 2019). It was also able to sustain an increase of 10.7% in passenger numbers consequently (Facts and Figures 2019). This trend was maintained in 2017 with the airport achieving a traffic increase of 8.6% to achieve a total of about 21.7 million passengers (Facts and Figures 2019). In 2018, passenger traffic grew by 11% to attain its greatest volume of 24.1 million passengers (Facts and Figures 2019). Concurrently, aircraft traffic also reported a growth of 10.8% to reach 217,094 movements (Facts and Figures 2019).
Many airlines that operated long haul flights terminated their contracts with the airport while others reduced the volumes of their operations to the seasonal basis, terminating operations during winter. The debt crisis that faced the Greek government resulted in a reduction in passenger traffic through the airport for over six years (Dimitriou, Mourmouris & Sarzetaki 2017, p. 5251). This period also saw the closure of Olympic Airlines that operated long haul flights via the airport. As a result, in the year 2013, the airport handled only 12.5 million travelers representing a 3.2% drop from the year 2012 and 25% less than the volumes reported in 2007, which had the highest volumes at the time (Papatheodorou et al. 2019, p. 30). The airport was, however, able to recover as from 2014 as ten airlines began operations at the airport, and Aegean airlines increased its network by 30% (2018 Financial Results 2019). Ryanair also established a base at Athens airport with eight new destinations (2018 Financial Results 2019). Thus in 2014, the airport reported more than 21% growth in passenger traffic to reach 15.1 million travelers (2018 Financial Results 2019).
Istanbul Airport
Istanbul airport was constructed through government tender that was issued for construction and operation of the infrastructure until 2030. The tender was awarded to the consortium Cengiz-Kolin-Limak-Mapa-Kalyon that was obliged to pay a down payment to the government in addition to value-added tax spanning over 25 years beginning from 2018 (Kormuculer 2015). It has created between 194,000 and 225,000 jobs translating to an additional household income of about 4.4 billion dollars and between 4.2% and 4.9% contribution to national income (Fasone, Kofler & Scuderi 2016, p. 37). The airport can handle 2.5 million tonnes of cargo, representing almost double the capacity of Atatürk airport (Anadolu Agency 2019). It has also signed contracts with logistics firms worth about 250 million euros (Anadolu Agency 2019). Indirect revenues have been realized in subsidiary sectors and other branches such as technical service and logistics (Fasone, Kofler & Scuderi 2016, p. 39).
The airport, opened in 2018, had total passenger traffic of 95,330 for the year. This figure grew to 28.8 million for the period between January and August 2019 (Anadolu Agency 2019). Istanbul Atatürk airport handled 63.7 million passengers in 2017 and 67.9 million passengers in the year 2018 (Anadolu Agency 2019). It was ranked 11th and 10th respectively globally in terms of passenger numbers. Of note, however, is that despite the growth in passenger numbers between 2017 and 2018, there was a 2% drop in domestic passenger numbers from 2017 to 2018 (Anadolu Agency 2019). Currently, the new Istanbul airport handles passengers and cargo while the Atatürk airport only handles cargo.
The Centre for Economics and Foreign Policy Studies of Turkey predicts that worldwide global air traffic is set to increase at a yearly average of about 4.4% until the year 2025 (Eren 2019, p. 670). This is in spite of the local Turkish aviation sector exceeding the global sector in terms of growth. The operations of the airport are expected to contribute 2.76% of the country’s GNP and create around 107,000 jobs by 2025, translating to 5.3 billion TRY in new household income (Eren 2019, p. 670). The new Istanbul airport serves passenger airlines while Istanbul Atatürk serves cargo airlines. Istanbul airport serves 68 passenger airlines, while Atatürk serves 19 cargo airlines (Anadolu Agency 2019). The division of passenger and cargo operations between the airports has enabled a smooth transition from Atatürk to the new Istanbul airport by relieving pressure on Atatürk and the Turkish aviation industry. This arrangement addresses one of the major challenges that faced the old airport: the restriction by the Turkish Airport Authority of increased charter and cargo flights to the airport.
Running more than one airport presents an advantage to the Turkish aviation industry. The new Istanbul airport brings modern facilities that enable the handling of larger passenger numbers enabling Istanbul to become an aviation giant in the region. Additionally, the new airport addresses the challenges that were facing the old airport, such as limited expansion capacity due to the rapidly growing city and restrictions by the Turkish Aviation Authority. Some of the weaknesses of running more than one airport include the fact that the venture is costly, requiring massive capital investment and massive environmental destruction because airports require large tracts of open land for efficient operation. In the case of the new Istanbul airport, environmentalists were opposed to the project due to the massive deforestation that was involved.
Critical Assessment
Both airports are run through public-private partnerships that provide the necessary capital and expertise to run modern international airports efficiently. However, Athens airport was significantly affected by the Greek government debt crisis that resulted in the cancellation of operations by major airlines operating long-haul services (Eren 2019, p. 670). This period was marked by a significant drop in annual passenger numbers handled through the airport. It was able to increase its annual passenger numbers up to an all-time high of 24.1 million passengers in 2018 (Facts and Figures 2019). In comparison, Istanbul airport handled 67.9 million passengers in the same year (Anadolu Agency 2019). In both airports, there were higher volumes of international passengers compared to domestic passengers. However, the volumes were significantly higher in Istanbul airport than Athens Airport. The airport strategy employed in Istanbul airport has resulted in significantly higher passenger numbers and cargo volumes as compared to the strategy employed at Athens Airport. The revenues realized at Istanbul airport are also significantly higher than those realized at Athens airport. This is why Istanbul airport continues to thrive while Athens airport faces challenges in the quest to become a global aviation hub.
Running more than one airport has allowed Istanbul to harness the increased capacity for handling passengers at the new airport and cargo at the old airport as the transition is being made towards complete adoption of the new airport. As a result, Istanbul airports are able to handle more cargo and more cargo airlines as compared to Athens airport which operates both functions in a smaller airport with limited capacity.
The Current Situation of Atatürk And Its Potential Role in The Future
The revelation that Istanbul Atatürk airport was no longer handling passenger flights and would be replaced by the new Istanbul Airport was taken to mean the end of an era, not only for the old airport but also TAV holdings, the company responsible for running the airport because it would not be involved in the running of the new Istanbul airport (Keskin & Ulas 2017, p. 336). The company has, however, managed to remain operational and profitable through diversification of its operations and upgrading of local airports such as Antalya. Istanbul Atatürk has lost its place as a major income earner for TAV, with the most impact being felt in the loss of duty-free sales at Atatürk.
Since 6th April 2019, Istanbul Atatürk airport only carries out cargo, general aviation, business flights, maintenance, air taxis, and handling of diplomatic and state aircraft. Before commercial passenger operations were moved to the new Istanbul airport, Atatürk had served more than 60 million travelers in the year 2015 (Anadolu Agency 2019). It was ranked 11th among the busiest airports globally in 2015 in total passenger traffic (Anadolu Agency 2019). When the transition was made in April 2019, the airports had been operated simultaneously for five IST months (Anadolu Agency 2019). The airport, as of now, uses the IATA airport code ISL after its original code was transferred to the new travel hub. The facilities at the airport include now-defunct passenger terminals, a cargo terminal, and other facilities. The airport had two passenger terminals that were linked to one another. Other facilities on-site include the headquarters of Turkish Airlines and Onur Air.
Atatürk airport has lost its role as a commercial flight airport; however, there are still roles that it can play in the Turkish aviation industry (Anadolu Agency 2019). The airport may be used for local aviation functions, thus working as an airfield. Two of its runways are to be preserved and used for general aviation purposes. One terminal is also set to be preserved to be used for private jets. This terminal can be utilized by private individuals and VIPs who desire some privacy in air travel. Aviation schools can also use the terminal for training pilots, maintenance technicians, engineers, and traffic controllers. The hangars can be used for the support and maintenance of commercial and private airlines. The airport is scheduled to handle cargo operations for the next year before these functions are also fully taken over by the new Istanbul airport.
Several facilities available at the airport may be handed over to the military for use in training and also active use by the air force. This is a sensible consideration because the infrastructure present at the facility is capable of handling large volumes of air traffic. The large terminal buildings can be converted into the convention and fair centers (Favargiotti 2018, p. 91). Holding fairs and conventions at this location would have a positive impact on the local service industry, including hotels and other service providers around the airport. This is because the reduced domestic and international passenger traffic translates to less business for this industry.
Strategy for Athens to Make It a Domestic and International Hub
The airport should partner with other key stakeholders to encourage visiting the city. Athens International Airport, the city of Athens, and AEGEAN have partnered to form the Athens Tourism partnership. This partnership aims to market the city as an ideal destination for the world, especially during winter, spring, and autumn. This promotion of the city as an ideal final destination is a strategic move aimed at strengthening the city’s position in the global tourism market (Kim & Lee 2018, p. 431). It will see the city receive more tourists annually, therefore, translating to increased passenger numbers and business for Athens airport. The airport will also have an opportunity to increase its network of global destinations and the number of airlines that are served. Aggressive marketing is a key strategic consideration that will ensure the growth of Athens as a tourist destination (Font & McCabe, p. 870).
Conclusion
The global aviation industry is a highly competitive scene that requires players and other stakeholders to continuously improve their operations and explore new ways of carrying out their operations to ensure that their airports grow to become global hubs in local and international aviation. Athens and Istanbul are world tourist destinations offering beautiful attractions, mainly in the form of ancient culture. Their respective airports are thus poised to handle large volumes of passenger traffic as tourists travel in and out of these destinations. Both cities have responded by building new, ultra-modern airports to meet their obligations to travelers. However, growth has not been uniform despite these airports being similar to Istanbul growing to become a global hub while Athens is struggling. From the analysis, it is evident that other factors have a role to play, such as the Greek government’s debt crisis. Additionally, key stakeholders need to work together in aggressively marketing their destinations to ensure that they reach more travelers and establish new destinations.
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