Tehran's IKIA Airport Striving to Compensate Pandemic Losses

EghtesadOnline: Tehran's Imam Khomeini International Airport has focused on tapping into new sources of revenue to cover expenses and overcome financial hardships resulting from the outbreak of Covid-19 in the past couple of months.

News ID: ۷۵۱۴۹۴

16 November 2020

Currently, local airliners as well as Emirates, Qatar Airways and Turkish Airline are operating flights to/from IKIA, according to Mohammad Mehdi Karbalaei, Imam Khomeini Airport City's CEO.

"We have also held talks with Lufthansa and Austrian Air to persuade them to resume Tehran flights," he said.

He did not provide further details about European airliners' possible return.

"More flights are operated from/to the airport compared with eight months ago. However, operations have seen a tenfold decline compared to the months before the outbreak of the virus," he said.

Latest statistics released by Iran Airport Company indicate a 23% growth in the total number of foreign flights using Iranian airspace during the month to Sept. 21.

"Instead of increasing the financial burden, we have decided to offer incentives to our partners, in order to support them during the current difficult times," he said.

Iran's aviation industry, a sector harshly hit by the spread of the new coronavirus, needs at least three years to recover. Official figures say airlines are facing a cash flow crisis after the industry was grounded and travel demand dropped by 90% during Norouz (the Iranian New Year starting March 20), so much so that some of them claimed they couldn’t pay their staff.

The number of air passengers reduced by 76% and flights by 90% during Norouz, according to data released by Iran Airports Company.

The impact of coronavirus has resulted in Iran's 16 airlines losing up to 30,000 billion rials ($110 million) from Feb. 20 to April 8, as the Association of Iranian Airlines estimated.

Applications for 24,000 billion rials ($87 million) in coronavirus bailout loans for airlines and other aviation sectors have been submitted to the Ministry of Cooperatives, Labor and Social Welfare.

Airport City

Karbalaei said fostering commercial activities in IKAC's Special Free Zone tops the schedule.“As aviation revenues have declined significantly following the virus spread, our solution is to focus on non-aviation revenues," he added.

Developing the area surrounding Imam Khomeini International Airport to create an airport city has been on the Ministry of Roads and Urban Development’s agenda as part of the objectives outlined in the Fifth Five-Year Economic Development Plan (2011-16).

Accordingly, the government-owned IKIA Airport City Company was established to manage the project’s execution and supervise its investment activities.

A report by Financial Tribune’s sister newspaper Donya-e-Eqtesad reveals details of the project.

An airport city or aerotropolis is an urban plan in which the layout, infrastructure and economy are centered on an airport. The plan stipulates that an airport can do more than extending traditional aeronautical services through new non-aeronautical commercial facilities, services and revenue streams.

The project to develop commercial facilities around IKIA is aimed at creating a suitable platform for both national and international companies to cluster around the airport and engage in business activities.

The master plan for the airport city includes 25 commercial facilities and townships around IKIA.

A health village to provide high quality medical services to both national and international patients, a rest area complex to serve the transit passengers, a media city, a convention city, a knowledge city to enhance knowledge-based economic activities, sports city, an IT park, a cultural village, a clean industries park, an archeological park, a sports complex, a leisure city and a hi-tech park are some of the facilities planned in the airport city.