Airports in Poland – a 1.2bn Euro business opportunity

Airports in Poland are currently experiencing very rapid growth, as a result of the fastest increase in air traffic anywhere in the world. However, Polish airports still suffer from underinvestment, inadequate infrastructure and limited capacity. The sector is expecting investments worth an estimated €1.2bn between 2007 and 2013, with credible plans to establish several new civil airports in Poland.

Airports in Poland are currently experiencing very rapid growth, as a result of the fastest increase in air traffic anywhere in the world. However, Polish airports still suffer from underinvestment, inadequate infrastructure and limited capacity. The sector is expecting investments worth an estimated €1.2bn between 2007 and 2013, with credible plans to establish several new civil airports in Poland.

The article “Airports in Poland – a €1.2bn business opportunity” published in mid-February by PMR, analytical and consulting company, highlights the excellent prospects of the Polish airport industry. In 2006 more than 15.3 million travellers visited Polish airports, over one third more than in 2005. In the same period, average airport passenger traffic in Europe grew by some 7%.

The structure of air travel in Poland has changed visibly in the last two years. Considering the number of passengers they process each year, Poland’s regional airports are catching up with the country’s main airport in Warsaw. In 2006 regional airports checked in nearly two-thirds more passengers than in 2005; at the same time, passenger traffic in the Warsaw airport rose by less than 15%. Thus, the share of the country’s central airport in the total civil air transport market has decreased to just above 50% and will shrink further to reach some 40% by 2020. This confirms the theory that soon the future of the Polish airport industry will be shaped foremost by the regional ports and not, as has been the case to date, by the central airport.

Nowadays, Poland’s airport network is six times less dense than in more developed European countries. On average in Poland there is one civilian airport per almost 3.2 million inhabitants; while in the EU15 this ratio stands at around 460,000 citizens per airport. This means that in some regions of Poland, people must travel more than 200 km to get to the nearest civil airport. Given these statistics, there is no doubt that Poland needs several new airports handling passenger traffic.

The government strategy for developing the national network of airports and airport ground facilities envisages the creation of several new airports, with priority given to the less developed regions of eastern Poland, i.e. Warminsko-Mazurskie, Podlaskie, Lubelskie and Swietokrzyskie voivodships. With the exception of Podlaskie, which has only one potential location for a civil airport (Bialystok-Krywlany), each of the remaining three voivodships has two possible locations for civil airports – with an option of either adapting an already existing sports or military airport or building a new airport (the latter option being significantly more expensive to implement). Thus, we expect that in the Lubelskie voivodship, the Swidnik location will be chosen over a site in Niedzwiada where an airport would have to be built from scratch. And in Warminsko-Mazurskie, the currently unused Szymany airport is likely to be selected rather than the region financing the construction of an expensive new airport in Olsztynek. In the Swietokrzystkie voivodship, the construction of a new airport (in Obice near Kielce) is more plausible because the local municipality has already started buying land for the airport which will cost nearly €130m.

Taking into account the Polish realities, we estimate that construction of a brand new civil airport in Poland is some €80m more costly than the conversion of an existing airport. For that reason other cities, including Nowy Dwor Mazowiecki, Minsk Mazowiecki, Sochaczew, Radom, Opole, and Gdynia have expressed their enthusiasm for establishing local or regional civil airports through converting already existing sports or military local airports. In addition, other cities, including Czestochowa, Koszalin, Pila, Rybnik and Nowy Sacz, are also considering similar investments.

Based on what we know today, as many as nine new airports may well be established, necessitating estimated investments of at least €425m within the next five years – asserts Bartlomiej Sosna, construction market analyst at PMR.

In addition to the new airports, existing airports also have major investment plans for the years 2007-21013. The biggest investment plans have been unveiled by the Krakow airport, followed by Wroclaw, Warsaw, Katowice, Gdansk and Rzeszow. We estimate that the existing airports’ investment plans for the next seven years will necessitate expenditure of approx. €775m. Considering the investments planned on new airports, between 2007 and 2013 as much as €1.2bn will be spent on civil airports in Poland – expects Bartlomiej Sosna.

Afterwards, between 2013 and 2020, further large investments are also expected. Though these are not exact figures, according to preliminary calculations, only seven out of twelve existing airports have estimated their investment needs for that period at nearly €500m. To this sum, one should also add large capital expenditure on part of new civil airports which will become operational within the next few years.