Airport Expansion Underway in Poland

Thanks to Poland’s accession to the European Union and the full opening
of the nation’s skies, traffic at Polish airports has surged. Airport expansion is an
opportunity for development no city wants to forego. As a result, at present every
port in the country is a construction site. In the current year, the related expenditure
will total PLN 440m (€ 115m).

Thanks to Poland’s accession to the European Union and the full opening
of the nation’s skies, traffic at Polish airports has surged. Airport expansion is an
opportunity for development no city wants to forego. As a result, at present every
port in the country is a construction site. In the current year, the related expenditure
will total PLN 440m (€ 115m).

In 2005, more than 11.5m travelers visited Polish airports, nearly 31% more than in
2004. In the same period, the average passenger traffic in Europe grew by a mere ca. 6.3%.
The port in Warsaw posted the steepest increase – close to a million more passengers;
Krakow ranked second (761 thousand more) ahead of Katowice (504 thousand) and
Gdansk (214 thousand).

The structure of air travel in Poland has changed visibly. The Frederic Chopin Airport
in Warsaw continues to have the largest share in the market. In 2005, it attended to
more than 7,071,000 passengers, i.e. 61% of all passenger traffic in Poland that year.
Nevertheless, this was a drop from its 2004 share of 68%. Based on analyses of the Civil
Aviation Office, in the upcoming years the air passenger market will continue to change.
In around 2020, the regional ports will be attending to most of the flights. To prepare,
regional airports must expand.

Despite the fact that in the upcoming years, passenger traffic will rise less steeply,
nevertheless, Polish ports’ statistics will be much more dynamic than the European
average. According to the forecasts of the Civil Aviation Office, in the next 15 years the
market will expand to accommodate as many as 39m travelers at Polish airports a year.
The International Air Transport Association expects that in 2005-2009, passenger traffic in
Poland will increase on average by 11.2% a year – the highest growth rate projected for
airport traffic for any facility in the world, from among countries which have more than
2m persons traveling on air carriers each year. Even the Chinese skies will be populated at
a slower rate than in Poland.

The especially bright prospects before the Polish air transport market are primarily
the offspring of the country’s accession to the European Union and the related full
opening of the Polish skies to international air carriers, which has also prompted greater
activity among carriers already established in Poland. There are also many new players
– primarily low cost airlines – thanks to which the number of offered connections as well
as passengers, have risen.

For regional Poland, the development of airports is an opportunity for better
regional accessibility, a higher ranking as investment and travel destination, higher capital
expenditure both on airports as well as their immediate and more remote vicinity, new jobs
in air transport and passenger services at the airports as well as in regional tourism, more
investments designed to improve road and airport infrastructure, greater regional prestige
as well as metropolitan structures and functions. Airports have become a material factor
underlying development of cities and regions. Good transport access is a basic prerequisite
for any region to be considered a viable localistation for a new business investment.
A high number of flight connections mean better regional economic growth which, in
turn, spurs higher demand for new connections. In addition, according to the Airports
Council International, in 15 years 60 airports in Europe will reach maximum capacity, and
20 (including the Prague airport) will be completely jammed. This creates a huge window
of opportunity for Polish airports, at least to take over some transatlantic connections.

This is why airport operators in Poland, on the wave of good economic conditions and
equally sound outlooks for the future, have launched infrastructure investment projects.

The forecast high rates of growth in passenger traffic make investments in airport
infrastructure a necessity, as without them the ports will not be able to handle the higher
flux of passengers. The higher number of air carriers will also necessitate investments in
the navigational infrastructure.

In the opinion of Krzysztof Koziol of Budimex: Expansion of airports comprises yet
another growth opportunity for the Polish construction sector and, as a consequence, for
better performance of construction firms. Airports are not made up of just halls, runways
and ramps, they also encompass a complete road (and sometimes rail) infrastructure as
well as facilities (offices and warehouses) that attract commercial investments.

According to PMR’s estimates, approximately PLN 440m will be invested in Polish
airports in 2006.