ECONOMY

Spata expects 20-25 pct drop

Athens’s new Eleftherios Venizelos airport expects to see a 20- to 25-percent drop in passenger traffic in the last quarter of the year as a result of the current crises in the global aviation and tourism industries brought on by the attacks in the USA, warned Matthias Mitscherlich, chief executive officer of airport operator Athens International Airport (AIA). The turmoil will have a major impact on the airport which could carry over to 2002, he told Kathimerini English Edition in an interview. For next year, we anticipate something like a 15-percent fall [in overall passenger traffic], the AIA head said, basing his prediction on preliminary forecasts issued by aircraft manufacturers such as Boeing and other aviation companies. If the estimates bear out, it could deal a serious blow to the airport which was officially opened on March 27, four weeks later than originally planned, and since then has been lambasted by tour operators and hoteliers for its high charges, allegedly one of the principal causes of this year’s less than rosy tourism arrival figures. Declining volume apart, the airport has another worry on its hands – the sharp jump in security costs. In common with airports around the world, AIA has beefed up the level of security to counter possible terrorist attacks, with the new measures expected to add 6 to 7 million euros to the annual security bill. The enhanced security, however, in no way impinges on the airport’s high standards. Irrespective of the September 11 attacks, the airport already has a high level of security. We are one of the few airports in the world to have 100-percent baggage screening carried by the latest technology, Mitscherlich said. AIA’s own 700-strong security team is complemented by 600 policemen equipped with explosive detection devices and sniffer dogs. In the weeks following the attacks on the US, the airport has hired more security personnel, amounting to a fifth of the total team. Random checking on both passengers and baggage has gone up to 50 percent from 10 percent. Screening has been intensified. The stepped-up security measures also apply to airport personnel who have to undergo centralized check-in procedures. While the airport can handle the extra costs for the moment – via cost-cutting measures in other areas to offset the burden – it might eventually turn to the state for assistance, Mitscherlich said. We don’t want to burden the state but by the end of the month or mid-November, we should know whether we require official aid, he noted. The alternative was to pass on security charges to airline travelers. Insurance cover is also another area in which AIA would like the state to help out, the airport head argued. Insurers terminated the airport’s third-party war liability risk cover shortly after the attacks on the USA, leaving it vulnerable. Right now, we don’t have cover for an eventuality like somebody hijacking a plane and crashing it somewhere else and the airport gets blamed for lax security, Mitscherlich said. We have asked the government to step in and provide a guarantee. We expect a reply very soon. On the thorny issue of high charges, the AIA head said the company is currently reviewing landing and parking rates, with the proposals scheduled to be put to the board next month and subsequently the International Air Transport Association. We believe what we have in mind can be done and it can be very substantial, he said, without going into specific figures. AIA’s decision to trim rates, however, has more to do with the fear of losing airline business than complaints from tourist bodies. Faced with a sharp drop in demand, major airlines around the world have announced big cuts in routes and frequencies and even grounded aircraft. Athens has seen its share of traffic drop significantly in recent weeks as a number of airlines reduce their flights. Olympic Airways will reportedly take 40 domestic flights and 30 international flights off its winter program at the end of the month. Budget carrier Easyjet’s outspoken Stelios Hadji-Ioannou went as far as publicizing an open letter to the government asking for cheaper charges. What we are trying to do is to find ways to help airlines hopefully come to Athens. Everyone has to make sacrifices in order to overcome a difficult situation, Mitscherlich said. The move will definitely have an impact on revenues although I don’t know yet [the full effect], he said. However, AIA considers it more important to maintain a good relationship with airlines, making them comfortable so they will be more attracted to Athens. The likely rate cut is also made possible by better-than-expected passenger volume growth. In the April to August period, the airport saw a 4-percent year-on-year jump in commercial flights, with international flights and passengers up by 8.6 percent and 5.6 percent respectively. In August alone, international volume increased by 10 percent while Europe in comparison had forecast low growth or no gains at all for the overall year, Mitscherlich pointed out. The AIA head is less than happy with tourism organizations’ complaints that high airport charges are partly to be blamed for the drop in tourism arrivals this year. Just to concentrate on the charges is not correct. There have been big benefits and lots of conveniences to airlines [at the airport], he said, citing the 25-percent decline in ground handling charges at Spata compared with the old Hellenikon airport. Charges that the expensive spatosima, the tax for airport modernization and development works, had scared off international travelers are also not true, Mitscherlich said. He said that European Union passengers, who account for 90 percent of incoming tourists, see an additional cost of only 3 euros. The burden is more on domestic travelers who, however, benefit from some of the cheapest fares in the EU.