Turkey is the world's leading brand in airport operations, TAV Airports pandemic results due to flight restrictions brought in late last year, 14,3 million domestic flights, has served a total of 12,7 million passengers, including 27 million in the outline.
Sani Şener, Chief Executive Officer of TAV Airports “The year 2020 entered the history books as a year of great changes due to the Kovid-19 outbreak. The volume of global aviation fell to almost zero during this period, as aviation authorities completely stopped international flights in the second quarter of the year to slow the spread of the virus.
The flight restriction measures taken in the second quarter were slightly eased in the third quarter, and accordingly, we experienced a strong recovery period in TAV Airports' international passenger traffic in the third quarter of 2020. However, restrictions on commercial travel still persist across most countries, including the geographies where we operate. In most countries that allow commercial travel, passengers are expected to undergo a quarantine period in their destination country and document a Kovid-negative test result before boarding the plane. As a result of these practices, unrestricted reciprocal travel opportunities are still among very few countries.
The number of passengers we serve in 2020 has decreased by 2019 percent compared to 70, due to travel restrictions applied to varying degrees throughout the year. All components of the industry, consisting of airport operators and airlines around the world, also had a similar year. The industry expects commercial flight restrictions to be lifted towards the second half of the year, as vaccination, which started in December 2020, exceeds a critical threshold in 2021.
We responded very quickly and effectively to the decrease in our turnover due to the crisis on the expenses side. Our operating expenses in the nine-month period between April-December 2020(*) We managed to reduce it by 50 percent. The decrease we achieved in operating expenses for the whole year was 41 percent. Although we succeeded in making significant cuts in all expense items, the biggest reduction in our operating expenses was made possible by the use of unpaid leave during the year by benefiting from the partial work support provided by the governments and all our employees, including the management level. Therefore, I would like to thank our employees and business partners for their contribution to our fight against the crisis.
We have previously informed our investors that pandemics in our contracts are clearly defined as a 'Force Majeure' and that we have made Force Majeure applications to our regulatory aviation authorities to compensate for lost operation times at airports in our portfolio. Our application is for our airport has resulted in Turkey. All the airports we operate in Turkey was extended operational period of two years, 2022 and 2024 lease payments are postponed.
Turkey, Tunisia and Macedonia Those of the airport's open since July 2020. Our airports in Georgia are still only open to flights with a limited number of countries. We expect Medina Airport, which welcomes the first Umrah passengers in January, to fully open at the end of March. Zagreb Airport remained open throughout the outbreak.
After the reopening of the borders, the most important factor determining the volume of international passenger traffic is that countries include each other in mutually safe destination lists (green list). Each country accepts passengers from the countries included in the green list it determines without the need for quarantine. With the two countries taking each other on the green list, a significant increase in commercial travel traffic begins. The number of countries on the list with mutual green Turkey increases we have seen a significant recovery in the third quarter traffic. However, Turkey is located between the countries sending the most tourists travel again made subject to restrictions in the fourth quarter, the UK and Germany.
As of September 2020, those of us who airport in Turkey, located in the green list of mutual opportunity that allows unrestricted travel to Turkey accommodated passengers from a limited number of countries. Although the number of countries our passengers come from is quite low, Bodrum reached 2019 percent of 59 passengers in September, and Antalya 45 percent.
These realizations clearly show that there is a strong demand for holiday destinations that make up the majority of our portfolio, despite the pandemic conditions if travel restrictions are lifted. In addition, industry experts generally expect that short-haul flights, long-haul flights and holiday travel will improve faster than business travel in the upcoming period. The airports in our portfolio, which generally serve short-distance holiday destinations, therefore have the potential to recover quickly with the lifting of travel restrictions in the upcoming period.
Almaty Airport closed the year 2020, which was a very difficult year for the entire industry, with a net profit, thanks to its defensive business model. We expect Almaty, which is strategically located with the potential to become one of the main cargo centers of the New Silk Road between China and Europe, to make a significant growth contribution to TAV's future due to the lack of rental payments and no renewal risk.
We will explain the details of the Tunisian debt restructuring, which we expect to be finalized in a short time, when the agreement is closed. We expect a significant amount of value to emerge for us in Tunisia with this restructuring.
The year 2020 was one of the most difficult years the world has witnessed in recent history. Each of us went through tough tests in different ways during the year, but at the same time, many of us had the opportunity to spend more time with our families. As TAV, we did everything in our power to stand by our employees and relieve their concerns. TAV, which has become a global brand, will continue to successfully manage this epidemic and its unprecedented effects, with the strength it derives from its strong balance sheet, the high efforts of its employees and the unwavering support of its shareholders. I would like to express my sincere gratitude to our employees, business partners and shareholders who brought the TAV brand to this day with their efforts and support ”.
(*) Cash operating expenses before depreciation, amortization and impairment
SUMMARY FINANCIAL AND OPERATIONAL INFORMATION
|(million euros)||2019||2020||% change|
|EBITDA margin (%)||37.4%||7.5%||-29.9 points|
|Net Profit / (Loss) From Continuing Operations||73.4||(278.1)||ad|
|Net Profit / (Loss) From Fixed Operations||299.7||(6.8)||ad|
|Total Net Profit / (Loss)||373.1||(284.9)||ad|
|Number of passengers (mn)||89.1||27.0||-70%|
|- International line||55.5||12.7||-77%|
|- Domestic line||33.6||14.3||-57%|
* TAV Istanbul data are not included in the turnover and EBITDA calculation. Likewise, Istanbul Atatürk Airport is not included in the passenger numbers.