Vitalii Portianko was elected as the new head of the Odessa International Airport, a company with a passenger traffic of about 1 million people, after its previous director Oleksii Kochanov was appointed as the general director of the Boryspil airport. Portianko previously held the post of executive director of the company. In an exclusive interview with the Center for Transport Strategies, he discusses the role of the Odessa airport as a regional aviation hub, cooperation with low-cost airline companies, passenger traffic, and a new passenger terminal.
To what degree are you satisfied with the direction in which the Odessa International Airport was going at the time of your appointment?
I received a "good inheritance” - a new passenger terminal that is being built and which has passed through many stages in terms of coordination and preparation of work - and I do not need to alter anything or break up any mechanism. I only need to take over the baton and bring the construction of the terminal to completion in 2014, to the cutting of the ribbon. By the way, we have already erected the frame of the building, i.e. we are going according to schedule.
Following a recent visit to Odessa by Deputy Prime Minister Oleksandr Vilkul, the media provided various reports about an increase in the total cost of construction of the terminal. In reality, what is the current estimated cost of this project?
I do not know anyone in the construction industry who can state precisely the final cost of a project at the beginning or during the implementation of that project... The projected cost of construction of the terminal is UAH 638 million. I am recalling this from memory, but I may be slightly mistaken. The deputy prime minister, as a true professional, also did not state an exact figure. The construction project is large: everything will depend on weather conditions (winter is ahead!) and how the contractors involved in this project will operate. For example, the roof is ordered from a different place, and it has to be transported. Again, transport services, how much gasoline and other fuels will cost, and so on.
In the past two years, the airport has been steadily increasing its volume of passenger traffic. With introduction of a new passenger terminal in 2014, it is clear that the company’s passenger capacity will increase significantly. How do you assess the objective prospects for an increase in passenger traffic through Odessa? Are there grounds for it to increase sufficiently in in the next few years to enable the airport’s new facilities to operate at full capacity?
This summer was revealing, especially when it comes to Russian airline companies and Russian regions. The number of flights is increasing and the Russians will increase rather than reduce the number of flights next winter! This is very important to us. It is necessary to understand that we "live on every ton." Every ton of takeoff weight is our meal ticket… Especially in the winter, when it is also necessary to thaw everything, heat, clear the runway, and maintain lighting equipment in proper conditions. Nevertheless, I am sure that Odessa is very attractive to passengers and airline companies primarily in CIS countries. For example, we are negotiating with the Air Astana on launching flights. Odessa is not "represented" in Central Asia, and it is necessary to fly there through a hub located in another country.
Does this mean that you are confident that you will operate the new facilities at full capacity?
We have no other option; we are obliged to operate them at full capacity. Investors are investing money, we have every opportunity to operate, and I am confident that we can cope with this task. The city will cope with this task. The attractiveness of Odessa as a cultural and historical center is increasing with each season, and it's clear.
Are you confident that the airport will avoid the problems involving accommodation of all the services related to non-aviation operations at the new terminal? Will this be comfortable for businesses and passengers?
There will possibly be such problems, but we are ready for them. We know how to deal with these issues. It is clear that our airports were previously "trapped" in the aviation business and this was definitely the priority. However, right now, we are already ready for the possibility of, for example, 50 percent of our revenues to be generated from non-aviation operations. We are learning, and we understand that. A special working group has been set up, and we are already creating the technical platforms that will generate revenue from non-aviation operations.
Deputy Prime Minister Vilkul spoke in Odessa about the upcoming start of construction (reconstruction) of the airport complex and a runway, which should be completed in 2015 ahead of the European Basketball Championship. The cost of the project is UAH 1.7 billion. Does the Odessa International Airport intend to invest funds in this project under state guarantee?
I will only say that we need a runway. This this is a good example of a symbiosis of state and business. Operation of a passenger terminal and development of passenger traffic are impossible without a runway. The government has made the decision to construct it, we already understand the timing of this project, and I am confident that the runway – an object of strategic national importance – will be built.
The Odessa airport started cooperation with the flydubai airline company on September 20. Is the company paying special attention to attracting low-cost airline companies to Odessa?
Pay attention to this: yes, this company is positioned as a low-cost airline company, but keep in mind that a low-cost airline company that has a business class is no longer quite a low-cost airline company. I think that it is simply the right selection of products that are being offered to the market – it is balanced and reasonable because some of the things that differentiate this company from the "low-cost” concept are adapted to the demands of our market.
Our competitor is the Chisinau airport, but it is currently ahead of us in terms of passenger traffic and infrastructure
Many things are mixed now, it is difficult to call a company a "pure" low-cost or vice versa because no one is standing still. Well, perhaps those that have been operating in this capacity for many years are. Flydubai is a good example of flexibility regarding the requirements of the market: for example, they previously made no provision for a business class, but they introduced it to meet the requirements of the Ukrainian market. Their second "plus" is that they are positioned as a subsidiary of the Emirates airline company, and our customers, our passengers know the Emirates company very well. Moreover, Dubai itself is one of the first hubs for Odessa. At a time, the Tavria low-cost airline company was one of the first to launch flights to Southeast Asia via Dubai.
Does the Odessa International Airport, which is increasing its capacity and passenger traffic, intend to aspire to the role of a regional hub?
... Are we are talking about the south of Ukraine?
About the south of Ukraine and about Moldova and Transdniestria. We see these passengers here. Yes, we are aspiring to the role of a regional hub.
In that case, which airports do you consider as the competitors of the Odessa airport?
We do not see ourselves as a competitor of the Boryspil airport or the Simferopol, Donetsk, and Lviv airports. Our competitor is the same Chisinau airport, but it is currently ahead of us in terms of passenger traffic and infrastructure. Eight years ago, they built a new terminal, invited foreign consultants, and began implementing new technologies and now they have significantly increased their level of service. However, there is the mentality of our region, the Odessa mentality - they want to fly "from home," fly out at a convenient time, they want to be seen off... And it is necessary to say that it is specifically this mentality that has helped us to survive in tough times because Chisinau was the preferred option, considering the short distance to Chisinau and the service it offered.
By the way, speaking of Chisinau, I am comparing the "strengths" of the airports, of course. We also have another big competitor with the status of a "hub," and that is the Istanbul airport, which is a serious, strong competitor. At the same time, it is also a partner because we have two Turkish carriers flying from there with remarkable frequency. Therefore, there is no direct competition in aviation. I would call it modeling of a product with adaptation to market conditions. There are no direct competitors and everyone is working to generate traffic. We can be the first hub for Istanbul’s second hub or the first hub for Boryspil. It is quite possible to "combine" all these.
Is there a long-term strategy for development of the Odessa airport? What should it be in ten or fifteen years?
Yes, considering today and the current statistics, we are looking five, ten, or more years ahead. I know how we are going to operate tomorrow, but how we will operate in three, five, or 10 years is much more interesting. The concept for development of the Odessa airport provides for this. There are first, second, and third phases of the terminal, they are modular terminals, and they will connect the old and new passenger complexes. Regarding passenger traffic, I am confident that it will increase. The demand for air transport is increasing every year, and we will be able to operate in various directions if there is a runway. We can also introduce a cargo terminal, we are thinking about it and we even know where it will be located. When this will happen will depend on the situation on the market. We are also capable of becoming a maintenance base. We are ready to develop these segments if there is demand on the market.