Development concept until 2045 adopted
Air traffic in Ukraine is booming. The growing number of low-cost airlines, the introduction of visa-free travel for the Schengen area and the increasing numbers of migrant workers and tourists are bringing the country’s airports to their limits. Modernization and expansion work are therefore necessary at many airports.
Boryspil Airport in Kiev is one example. With the market entry of Ryanair in autumn 2018 and an increasing number of flight connections, the existing Terminal F was put back into operation in spring 2019. After several years of downtime, work is now also continuing on the construction of a large multi-story car park across from Terminal D. According to press reports, Israeli investor Ofer Kerzner plans to start construction of an eight-story airport hotel with 264 rooms in 2019.
However, the Ukrainian government has much larger plans for Boryspil Airport. A development concept adopted in May 2019 envisages investments of EUR 3.4 billion by 2045. The Austrian Airport Consulting Vienna was involved in the development of the concept. The number of passengers at the largest airport in the country could rise to 54 million by 2045 (compared to 12.6 million in 2018), according to estimates from the consulting company.
First expansion phase: 2019 to 2021
The concept is divided into several phases. The first phase until 2021 comprises the refurbishment of the second runway, the extension of Terminal D, including the transfer areas and the modernization of the baggage claim area for domestic passengers. In addition, freight capacity will be expanded, a new office center will be built, and bus connections are going to be improved.
Second expansion phase: 2022 to 2024
The second phase comprises the construction of a new cargo terminal and the modernization of the first runway. Construction of a new central passenger terminal will also start.
Third expansion phase: 2025 to 2031 and further development until 2045
The third phase will see the completion of the second phase of the new central passenger terminal and the construction of a new office building. Capacities will be created to service and repair aircraft. It is planned to gradually expand the airport infrastructure, in particular the passenger and cargo terminals, by 2045. Traffic connections will also be improved. Something has already changed here in recent months: since November 2018, Boryspil has a rail link to the city center of Kiev.
Financing planned with own funds and international loans
The majority of the costs for the expansion of Boryspil Airport will be contributed by the airport operator (EUR 2.4 billion). The remaining EUR 1 billion will be covered by loans. One possible source are international development banks. As part of the Indicative TEN-T Investment Action Plan, six airport projects with an investment volume of EUR 470 million will be implemented in Ukraine. The bulk of this, EUR 300 million, will be invested in Boryspil Airport.
Financing under a concession model is also being discussed. A decision taken by the government in April 2019 poses a threat to the implementation of current and future projects at Boryspil Airport: instead of 40%, the airport and a number of other state-owned companies now have to pay 90% of the profits generated in 2018 to the government. If this rule is maintained in the future, there will be no scope for investment, according to experts.
Another important factor for the future of Boryspil Airport is the further development of Ukraine International Airlines (UIA), the country’s largest airline, which has recently been losing money. In 2018, a loss of around US$ 100 million was incurred, as UIA is getting competition from low-cost airlines.
Ukraine: Selected airport projects
|Dnipro: Construction of a new airport “Prydniprovia” as a future airport for the large cities of Dnipro, Kryvyi Rih and Zaporizhzhya||EUR 400 million||Planning phase; government provides EUR 7 million for project documentation||Passenger volume of up to 3 million; Alternative to new construction: renovation of the existing Dnipro Airport (costs: EUR 214 million)|
|Boryspil: Rehabilitation of the second runway and construction of a cargo terminal||EUR 300 million||Planned realization until 2021||Part of the TEN-T Initiative of the European Union|
|Odessa: Construction of a new terminal and runway||US$ 130 million||In progress; completion by the end of 2019||Contractor for the construction of the new runway: Avtomagistral Pivden http://automagistral.com.ua|
|Mukatchevo: Expansion of the former military airport into an international passenger airport||Between EUR 80 million and EUR 120 million||Planning stage||Selection of Mukachevo as the future central airport for the Transcarpathian region by the Ministry of Infrastructure in November 2018|
|Kyiv International Airport: Runway Expansion||EUR 84 million||Planning phase; implementation in 3 to 5 years||Expansion of the passenger terminal is also planned|
|Winnyzja: Airport modernization (including runway rehabilitation and installation of new signaling equipment)||US$ 80 million||Planned start of construction work: summer 2019; implementation 2019 to 2020||–|
|Bila Zerkwa: Development of the existing military airport into an international freight airport||EUR 59 million||In preparation, planned implementation by 2022|
|Saporishshja: Construction of a new terminal||US$ 20 million||Planned commissioning in summer 2019||–|
|Lviv: Modernization of the old terminal and construction of a freight terminal||–||Planning stage; implementation planned for 2019 to 2022||–|
|Cherniwzi (Czernowitz): Airport modernization||–||Planning stage||Possible implementation within the framework of a public-private partnership|
|Mariupol: Recommissioning of Mariupol Airport||–||Planned recommissioning 2019 or 2020||–|
Source: author’s research