Moscow airports expect 60 million to 65 million passengers by 2020

With air travel booming in Russia for a fifth successive year, Moscow's three main airports -- Sheremetyevo, Domodedovo and Vnukovo -- are touting their plans to meet growing demand as far ahead as 2020.

The three airports are planning to become bigger, sleeker and more user-friendly as the competition heats up for the millions of extra passengers per year expected to fly to and from the city. But while the country's pre-eminent hub for decades, state-owned Sheremetyevo, remains mired in bureaucratic delays, its rivals are forging ahead with ambitious plans involving large-scale private sector investments.

"The competition among Moscow's airports is tougher than anywhere else, we battle for every client," said Dmitry Kamenshchik, chairman of Domodedovo operator East Line Group, at a recent briefing on the airport's development strategy.

The fastest growing of the three airports, Domodedovo saw traffic soar 30 percent last year to 12.1 million passengers. The southern Moscow airport is now breathing heavily down the neck of its main competitor, Sheremetyevo, which last year handled 12.8 million passengers.

Kamenshchik said that, judging by results so far this year, Domodedovo had already overtaken Sheremetyevo by volume, and that passengers were voting with their feet for Domodedovo's state-of-the-art facilities over Sheremetyevo's aging infrastructure.


With East Line's investment into facilities of $500 million, Domodedovo is widely viewed as the best airport in Russia and is now one of the top 10 in Europe, Kamenshchik said.
East Line plans to increase the airport's size to 215,000 square meters by next year, including an all-glass multilevel plaza with parking for 4,500 cars, a hotel and even a supermarket and a cinema, while capacity will increase to 16 million passengers per year.

The first airport to become accessible by rail, Domodedovo is also in talks with Russian Railways, or RZD, to build rail links to most of Moscow's train stations. It currently has one rail link, to Paveletsky Station in central Moscow.

"We are taking our expansion stage by stage," Kamenshchik said. "There could be a big boom in the market and we have to be ready for it. But with the base that we have created, we can complete any project in 12 months."

The airport predicts it will serve anywhere between 23 million and 40 million passengers per year by 2020, and is planning to construct three new terminals to meet this demand.

Eventually, Kamenshchik said, Domodedovo will grow into a miniature city, including a business area with office buildings and warehouses, entertainment theme parks and shopping centers.

East Line's ambitious plans, and investments to date, have helped it woo several domestic and international carriers to Domodedovo, including British Airways, El Al and, most recently, Spain's Iberia.

However, East Line's plans encountered a snafu last month in the form of a government re-evaluation of its 75-year lease on the airport. Claiming that East Line's lease was granted in an improper manner and has yielded just peanuts to the state, the Federal Property Management Agency terminated the lease agreement.

But Kamenshchik said East Line's enthusiasm had not been dampened or its operations affected in any way. He said he expected a new lease agreement to be signed later this year with fixed rates that would also apply to Sheremetyevo and Vnukovo.

He said that government ministries were keen to resolve the situation.

"Otherwise I would have said: 'Stop, no more investment, let it be like everywhere else,'" he said.

Kamenshchik cited the airport as a good example of private investment coming in to aid a major overhaul of the country's cash-strapped transport infrastructure -- cooperation the government has stated it wants to encourage.

Vnukovo, the smallest of the three airports, is looking to catch up with its two big rivals. It is a rare example of cooperation between the authorities and the private sector gone well.

Controlled by City Hall, Vnukovo has profited from the city's continued construction and development spree under Mayor Yury Luzhkov.

Vnukovo last year completed construction on a new terminal next to its Soviet-era one, and has hired German firm Obermeyer Planen & Beraten to draw up plans for a new international terminal at an estimated cost of $300 million.

Obermeyer, which has worked on airport projects in Germany, China and most recently in Novosibirsk, is due to present the draft concept for the terminal by May.

According to Vnukovo's preliminary plans, the new 120,000-square-meter, all-glass terminal will give the airport capacity for 7,500 passengers per hour, translating into an annual capacity of between 18 million and 23 million passengers.

Last year, Vnukovo's traffic fell 11 percent to 2.5 million passengers, but this year the airport's management hopes to attract an extra 1 million passengers.

"Experts predict traffic of between 60 million and 65 million passengers by 2020 through Moscow alone," said Vitaly Vantsev, Vnukovo's first deputy general director. "If that happens, there will be enough work for all three airports."

Vnukovo also plans to extend one of its two runways and complete its rail link to Kievsky Station with an underground platform at the airport by this August.

The new terminal will cost an estimated $300 million, to be mainly financed by the Moscow city government and Aviatsionnaya Neftyanaya Kompania, the two main shareholders in the airport.

Vantsev said the airport would hold a tender for the terminal this year and complete its construction by 2007.

State-owned Sheremetyevo has also been through a series of tenders to upgrade its dilapidated facilities, but due to a series of shake-ups in its management and bureaucratic delays, major improvements have yet to take place.

Sheremetyevo-2, the country's main international entry point, originally built for the 1980 Olympic Games, has in recent years been referred to as "the nation's disgrace."

Meanwhile, the fate of the airport's third terminal, which was previously planned to open in 2003 but never progressed beyond a 2001 groundbreaking ceremony, is still up in the air.

Federal Property Management Agency officials earlier this month came up with a proposal to privatize Sheremetyevo next year, but the Transportation Ministry was quick to denounce the plans, arguing in favor of selling off the airport after improvements were made to raise its value.

Sheremetyevo's new management team, installed last October, is working on a new development plan to be presented later this year, deputy general director Sergei Nedoroslev said by telephone.

The airport has so far limited its makeover for Terminal-2 to cosmetic changes, such as expanding the arrivals area, redecorating ceilings and installing machines for making fresh fruit juice.