Options under consideration include having the new airport’s consortium of builders, known as IGA, construct and own the facilities and lease them to the airline, three people said, asking not to be identified because the deliberations are confidential. The national carrier, currently based at Istanbul Ataturk Airport, Turkey’s biggest, held talks with local and international commercial banks as well as export credit agencies to borrow around $850mn to finance the move, but may lack sufficient collateral to do so, two of the people said.
Turkish Airlines, formally known as Turk Hava Yollari AO, doesn’t have enough collateral for a loan of that size because most of its assets are planes already pledged as collateral when they were acquired, two of the people said. Allowing IGA to build the facilities and later lease them on a long-term contract appears to be a feasible option, they said. The company is also considering tapping capital markets with a debt sale, they said.
The new campus would comprise the carrier’s head office, hangars, ground-handling and other facilities at an $11bn new airport being constructed by a group of local companies. Turkish Airlines chairman Ilker Ayci said in March that the company will invest a total of $1.2bn to $1.5bn in moving its hub to the new airport.
IGA was founded in 2013 as a consortium of five Turkish construction companies: Limak, Cengiz, Kolin, Kalyon and MAPA. Each holds a 20% stake in IGA, and the group has previously participated in the building of 8 airports from Kosovo to Cairo, according to information on its website. Turkish authorities say the new Istanbul airport will initially carry 90mn passengers a year, almost 50% more than the capacity at Ataturk, which is operated by TAV Havalimanlari Holding AS, a unit of Aeroports de Paris.
Turkish Airlines serves nearly 300 destinations, more than any other airline in the world. The construction of the new airport is key to government ambitions backed by President Recep Tayyip Erdogan to make Istanbul one of the world’s premier hubs for air travel.
Spokesmen for Turkish Airlines and IGA declined to comment for this story.
