Greece is on the verge of a significant transformation in its regional airport management as the Growthfund prepares to issue a call for expressions of interest in an open international tender for the concession of 22 airports currently operated by the Civil Aviation Authority. The move comes after months of deliberation and follows a decision to abandon a previous incentives plan that required approval from the European Commission.

Shift in Strategy and European Approval

The Growthfund, a state-owned investment vehicle, has decided to proceed with an open tender for the en-bloc concession of all 22 airports in its portfolio. This decision follows the freezing of an earlier incentives plan, which aimed to attract investment by offering existing concessionaires of Greece’s largest airports an extension of their contracts in exchange for upgrades at the 22 smaller airports.

The incentives plan, however, is currently stalled as it requires approval from the European Commission, a process expected to take more than a year. With the surge in international arrivals and the booming tourism industry, this timeline is deemed impractical. As a result, the Growthfund has opted for a more immediate solution through an open international tender.

Well-informed sources told Kathimerini that if the open tender fails to attract interest, Greece will have a stronger case to push for the approval of the incentives plan, which could be expedited by the European authorities.

The Airports Involved and Investment Needs

The 22 airports set to be tendered include Alexandroupoli, Araxos, Astypalaia, Chios, Ikaria, Ioannina, Kalymnos, Karpathos, Kasos, Kastellorizo, Kastoria, Kozani, Kythira, Leros, Limnos, Milos, Naxos, Nea Anchialos, Paros, Sitia, Skyros, and Syros. These airports are spread across the Aegean and Ionian islands and serve as critical nodes in Greece’s regional air traffic network.

According to market estimates, the future cash flows of these airports, even if passenger traffic were to double, would generate annual revenues of no more than €65-70 million. However, the required investment to upgrade and modernize these airports is expected to start at €200 million and could rise depending on the extent of the interventions needed at each location.

The need for investment is exposed by forecasts from the Airports Council International (ACI World), which projects a significant increase in global passenger traffic over the next three decades. This highlights the urgency of upgrading Greece’s regional airports to meet growing demand and maintain competitiveness.

Impact on Trade and Tourism

The tender for the 22 regional airports is expected to have a significant impact on Greece’s trade and tourism sectors. Improved infrastructure at these airports could enhance connectivity, support local economies, and attract more international visitors.

For local communities, better airport facilities could mean more direct flights, reduced travel times, and increased business opportunities. This could be especially beneficial for smaller islands that currently rely heavily on ferry services and have limited air connectivity.

According to the Growthfund, the upgrades will focus on modernizing terminal facilities, improving runway capacity, and enhancing digital infrastructure. These improvements are major for handling the expected rise in passenger traffic and ensuring compliance with international aviation standards.

What Analysts Say

Analysts have expressed cautious optimism about the tender process. While the potential for investment is clear, the success of the tender will depend on the ability of the Growthfund to attract qualified bidders with the necessary financial and operational capabilities.

One analyst noted that the open tender process could attract both domestic and international investors, provided the terms of the concession are attractive enough. However, there are concerns about the financial viability of the airports, given their current revenue levels and the high investment costs required.

“The key will be to ensure that the concession terms are structured in a way that balances the interests of the investors with the needs of the local communities and the national economy,” the analyst said.

The Growthfund is expected to issue the call for expressions of interest in the coming weeks, with the aim of finalizing the tender process before the summer travel season. This timing is strategic, as it allows potential investors to assess the opportunities and prepare their bids.

The tender will be open to both Greek and international investors, and the Growthfund has not ruled out the possibility of joint ventures or partnerships. The final selection of the concessionaire will depend on the proposals submitted, with a focus on financial viability, operational efficiency, and long-term sustainability.

As the process unfolds, the Growthfund will be closely monitored by both domestic and international parties, including the European Commission, which will be watching to ensure compliance with EU regulations and competition laws.