"Spain's first private airport aims at budget airlines"

Wednesday, May 19, 2004

Spain's first private airport aims at budget airlines


CIUDAD REAL, Spain (Reuters) - Spain, which attracts 50 million tourists a
year, is building its first private airport 200 km (125 miles) south of
Madrid in a bid to lure budget airlines away from the capital and spruce up
a deprived mining area.

The airport, expected to be operational from the second half of 2006, is
being built on the plains of La Mancha, best known as the stomping ground of
Miguel de Cervantes's Don Quixote and will be named after the
windmill-tilting knight.

The new airport has been nicknamed "Madrid's Luton" after the British
airport outside London which challenges London's Heathrow and Gatwick,
particularly in the budget flight market.

It is also similar to Belgium's airport at Charleroi, which is near enough
to Brussels to carry the capital's name on budget airline Ryanair's
destination list. The airport has helped the declining former steel town to
generate tourism.

The Don Quixote airport will try to woo low cost airlines with lower tariffs
and flexible timetables. They will also receive better treatment than in the
main state-run airports where dominant carriers are given priority.

A high-speed train link connects Ciudad Real with central Madrid in 45
minutes, making it a viable alternative to the capital.

"Mainly it is charter or budget companies that are approaching us who want
alternative sites near major centres," Tomas Herrera, managing director of
construction firm CR Aeropuertos, told Reuters in an interview.

He said CR was in the final stages of talks with 10 to 15 firms, of which
only three were major airlines.

Ireland's Ryanair and Easyjet have said they are interested.

"They don't want to go to the main centre because they don't treat them well
and they charge them the same as the major airlines...our tariffs will be,
in general, about 30% cheaper than Madrid," Herrera said.

"Here they can land at whatever time they like because the slots aren't
taken up by big companies."

The new airport, in the middle of empty plains, has the advantage of having
no restrictions on flying times, unlike Madrid's main airport which is
surrounded by residential areas.

But Herrera added that the airport, with capacity for two million passengers
a year and 25,000 tons of cargo, did not want to focus entirely on low-cost
airlines.

It is also catering for U.S. travelers, standardizing security with U.S.
systems.

Brussels lends a hand

The mining and agriculture-dependent area is on the European Union's list of
"objective one" deprived areas, meaning investors can claim back about a
third of their investment from Brussels.

Billed as a private project, CR Aeropuertos's shareholders include local
authorities and the regional chamber of commerce. Spanish utility Iberdrola
has an 11% stake in the firm.

CR Aeropuertos expects to invest 220 million euros ($259.6 million) in the
project, 75 million of which it has already paid out with the rest being
funded with 20-year project finance.

Regional and central governments are expected to invest some 880 million
euros mainly in infrastructure projects connected to the airport.

Locals broadly support the project. In one village of about 100 people, most
of the signs saying "No" to the airport have been scribbled over with "Yes."

"This is a very depressed area, people worked in agriculture or mining,
which today is obviously in decline, and people are excited about the
airport," Herrera said.

Herrera said foreign firms had shown interest in providing logistics and
maintenance services.

A group of companies, including some of the CR Aeropuertos shareholders, are
planning to build hotels, a casino and golf courses. The historic city of
Toledo - one of Spain's top tourist destinations - is also nearby.

The construction firm expects 700,000 passengers in the first year and 1.5
million in the third year of operation. It expects the project to be
profitable from the second year, not counting infrastructure amortizations.


 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************