An Infrastructure Ministry commission presented the results of an analysis of the Boryspil airport’s operations to employees of the airport on January 12 and recommended measures to increase the airport’s profitability. The text of the presentation (in Ukrainian) can be downloaded in pdf format here.
"There is a set of problems at the Boryspil airport. The airport has invested a huge amount of funds that need to be serviced. Thanks to these loans, we were able to organize the Euro 2012, but they are now being used inefficiently and the airport’s management has still not paid attention to non-aviation revenues. However, the Boryspil has significant potential in this area,” the Ministry of Infrastructure quotes Minister of Infrastructure Andrii Pivovarskyi as saying.
First Deputy Minister of Infrastructure Volodymyr Shulmeister is quoted as saying that this expert commission analyzed the operations of the airport in the past six years, comparing the main indicators of its operations with those of leading airports around the world. For example, the Boryspil airport’s non-aviation revenue accounts for only 20% of its total revenues while the industry average is 41%. In this area of development, Ukraine’s largest airport is about ten years behind other airports around the world: airports around the world generated about a quarter of their revenue from non-aviation operations activities in 2004 (the analysis lists more than 20 airports and airport holdings).
According to the ministry, the key problems of the Boryspil airport include the following: lack of a clear development strategy, construction and procurement inefficiencies, falling operating and financial indicators, a low rate of profitability, an inefficient revenue structure and inflated costs, problems with working capital, a dangerous level of credit load, the formality of quality control of services, lack of competitive flexibility, etc.
The commission proposed an action plan for overcoming these problems in the short and medium term.
"Firstly, it is necessary to increase revenues from non-aviation operations, on which all airports in the world operate. These include trade and catering, and additional services - parking, taxis, and advertising. In the future - work to increase the number of flights, transit flights, and cargo handling. In addition, the operating costs and management structure should be optimized and a switch should be made to for quality cost budgeting and financial management," Shulmeister said.
The Ministry of Infrastructure will resolve these issues together with the new head of the Boryspil airport.
As reported, the creation of a pool of candidates for the post of general director of the airport will continue until January 19. The minister of infrastructure expressed the hope that the new head of the airport will be selected at the beginning of February.