Novaport Poised to Capitalise on Russia’s Nascent Liberalisation of Skies

| October 8, 2019

Russia’s skies are set to clear for foreign airlines. For so long entrapped by isolating policies, Russia’s aviation industry is beginning to show encouraging signs of life. A planned partial liberalisation of the country’s skies for foreign airlines could well bring Russia in line with the level of freedom enjoyed for decades in the airports of Western and Central Europe and see a leap in the number of foreign airlines jetting back-and-forth.

In late September, deputy prime minister Maxim Akimov, who supervises the country’s transport industry, gave his support for St. Petersburg’s Pulkovo airport to be granted new rights under the Open Skies regime, permitting “seventh freedom flights,” which would allow foreign airlines to fly to St Petersburg from any country, not just their place of registration.  Four other Russian airports already have “fifth-freedom” traffic rights, which entitle airlines to board passengers at a stopover during a flight between their country of origin and a third country.  Of these, two appear in the stable of Novaport, one of the largest and fastest-developing regional airport operators in Russia.

More liberal skies will inevitably demand improved airport infrastructure to match and cater to increased demand.  Boasting 16 airports in its impressive network across Russia’s vast geography and multitude of time zones, Novaport is exceptionally well placed to support the country’s nascent aviation liberalisation and ambitious infrastructure overhaul.

In 2016, Novaport acquired a controlling stake in Kaliningrad airport. The comprehensive overhaul and large-scale reconstruction of its passenger terminal, increasing its size from 12 to 40 thousand square metres, paved the way for the airport to become a key element of the transport system for the most western region of Russia.

Investing in Novaport and the Russian airport sector are Meridian Capital Limited, the international investment firm headquartered in Hong Kong with a diversified investment portfolio spanning consumer goods, real estate, hospitality, infrastructure and natural resources. Meridian Capital and its shareholders own 50% of the airport alongside co-owner AEON Corporation.

Yevgeniy Feld, founding principal of Meridian Capital, explained the Novaport’s significance as “a flagship investment in our global portfolio at Meridian Capital Limited. We are extremely supportive of the on-going liberalisation of Russia’s skies. Novaport continues to devote significant resources to the modernisation of regional airport infrastructure and believes that the potential impact on economic development is enormous. The exceptional commitment to enhancing efficiency and raising standards by our partner and co-owner AEON Corporation ensures that Novaport will continue to demonstrate impressive growth and remain at the heart of efforts to improve Russian airports and regional connectivity”.

Russia’s commitment to Open Skies, and the introduction of a simplified e-visa scheme in key locations such as Kaliningrad, mean that Novaport is exceptionally placed to cater to any future boom in passenger numbers. If, and when, the Russian Transport Ministry approves Pulkovo airport’s proposal, the possibilities for expansion appear endless.

As of December 2018, Novaport holds a major equity stake in 14 regional airports across the Russian Federation: Novosibirsk, Chelyabinsk, Volgograd, Tomsk Astrakhan, Chita, Tyumen, Perm, Murmansk, Kemerovo, Kaliningrad, Mineralnye Vody, Ulan-Ude, Vladikavkaz and owns minority interests (48-49%) in Barnaul and Stavropol airports.

 

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