Aviation Turkey: Could you please inform us on the evolution, the present structure reached, sectoral access and operational as well as financial status of TAV Airports Holding (TAV HH) known with its application of the model of Build - Operate - Transfer for Airports and Terminals that contributed to the global recognition of Turkish aviation with its successful implementations from the start?

Sani Şener: With a unique business model from the beginning, TAV is a company that was established by assuming the construction and operation of the Atatürk Airport in 2000. In that period, Turkey launched the policies of liberalization in aviation and privatization in airport operation. During the last 19 years, on account of this vision, two global brands emerged: THY in aviation and TAV in airports and the number of passengers exceeded 200 million in Turkey. After getting involved in this business in 2000, we projected the growth of the sector and regarded it as a critical worldwide opportunity. With the know-how we accumulated, we aimed for international growth and identified a target of becoming an operationally regional company and a global one in terms of finance.

The year 2012 was a critical milestone for TAV. In that year, 12 airports existed within our portfolio and we became a global company serving yearly 72 million passengers. We went through a public offering, we settled our institutional processes, and we became a preferred brand in this area focusing on airport building and operations. For the next step, we went through a search for an industrial partner and through our cooperation with Aeroport de Paris (ADP) Group in 2012, we created the world’s greatest airport operation platform.

In the last seven years, we have also maintained our development with the contribution of such cooperation activities. Together, we conduct business in third countries such as Croatia and Cuba. Currently, we operate 14 airports in seven countries. Additionally, our service companies perform activities in 21 countries at 62 airports where TAV does not exist. We are at the top of the global list of airport construction in the last three years. We have over 55 thousand employees together with our construction company. We have become a company preferred worldwide with our know-how.

Aviation Turkey: Today, with ADP partnership TAV HH is one of the 5 greatest airport operators in Europe. What are your comments on TAV HH’s global position? What would you like to say about TAV HH’s ADP shares and assessments for the future?

Sani Şener: Currently, TAV is a company that collaborates with the world’s leading airport operators, it is a brand preferred by the whole world and it exists at the same platform with Europe’s top five airport operators. We are partners with Fraport in Antalya. ADP is our partner, and Vinci is ADP’s partner. ADP is also the partner of Schiphol. We created the world’s greatest airport operating platform composed of 24 airports and a yearly number of 281 million passengers with ADP. The distinctive experiences and know-how we gained here provide an exceptional competitive power to TAV all over the world.

Aviation Turkey: It was announced that TAV HH served 29 million passengers in the first quarter of 2019 and that it achieved a net profit of EUR 24 million out of a total turnover of EUR 270 million. What is Turkey’s share in this financial statement? How has 2018 been for Turkey and what are your comments on the 2019 first quarter figures?

In Turkey, we are executing the operation of the Antalya, Izmir Adnan Menderes, Ankara Esenboğa, Milas-Bodrum and Gazipaşa-Alanya airports. As a result of the devaluation suffered by the Turkish Lira that started in the second half of 2018, the regression in the internal demand affected Turkey’s domestic lines traffic negatively. Due to both volatility and 2018 being a high base year, we observe the continuation of this regression in the first months of 2019 as well. On the other hand, the increase in the international lines traffic at our four airports that serve touristic destinations continue. Especially in Antalya which is Turkey’s second greatest airport in terms of international lines, we witness a successful graphic on account of the promotion and marketing activities we conducted in order to extend the touristic season to 12 months. Antalya Airport’s international lines traffic increased by 45 percent in the first four months of the year compared with the previous year and reached 2.8 million passengers.

Aviation Turkey: Zagreb and Skopje Airports operated by TAV HH were selected as the “Best Airports” of Europe in their categories. In addition to Zagreb and Skopje, the Muscat International Airport at Oman was selected as the “Airport improving its service quality the most” in the Middle East. The affiliates of TAV HH - BTA and TAV Operating Services- assumed all the food - beverage operations, lounge, car park and CIP services. Finally, the Riga Primeclass Lounge operated by TAV Operating Services was selected as “Passenger Lounge of the Year” in Europe. What are your comments on the activities of your companies that appear on the agenda with their achievements in such countries?

Sani Şener: Passenger satisfaction lies in the center of all our operations. Aviation is a strictly regulated strategic sector feeding various other sectors with high factors. Security based regulations have been increasing across the entire world in the recent period. Within such a framework, our endeavor is to offer a rapid and comfortable travel experience to our passengers. We are creating innovative solutions by tracking changing passenger requirements and expectations. At the same time, we increase efficiency by implementing the technological developments to company processes. Contrary to the past, recently developed information technologies allow us to have a detailed view of passenger behavior and to create instant solutions. We foresee a process where passengers will be able to plan all moments of their travels and where the airports will be transformed into social life areas. We own financial and operational competencies rendering us capable of conducting making business across the world.

Aviation Turkey: You announced that your service companies, which are your third area of growth, formed a 37 percent combined turnover, and that the TAV Operating Services Company accessed Spanish airports by acquiring the majority of the shares of Spain based company GIS and that you accelerated growth strategies in South America and Europe. What is the status of your global activities with your service companies ATÜ, Havaş, BTA and TAV Technology? Are you setting sights on new markets and areas within this new period?

Sani Şener: The growth strategy of TAV Airports is a very clear strategy based on three fundamental pillars. First of all, through investment strategies with attractive return profiles, we are always searching for smart inorganic growth, “smart growth” opportunities. Secondly, we wish to serve to more passengers at our airports that we maximize and operate by supporting the organic growth of our existing portfolio and operations with all types of new technologies and increasing efficiency. Within the scope of the third pillar of our growth strategy, we aim for our service companies to extend out of TAV as well, by using business opportunities at the new airports besides just the TAV Airports ecosystem. As TAV Airports, we completed a successful year in terms of all three areas that are fundamental to our growth strategy. In line with our strategy of focusing on profitable inorganic growth opportunities, we acquired 50% of the shares of the company running Antalya Airport in 2018 in return for EUR 360 million. In this way, we added the 14th airport to our portfolio. Our service companies, which are our third area of growth, now form 37% of our combined turnover. With ATÜ, Havaş, BTA, Operating Services and TAC Technology, TAV’s footprints have reached from the USA to Denmark and to Indonesia, spanning 76 airports in 21 countries.

Aviation Turkey: TAV was examined as a “Case Study” at Harvard Business School. How did that happen, how did it develop and what is the current situation? Could you inform us about this development?

Sani Şener: Harvard Business School (HBS) is amongst the world’s leading schools in the area of business management sciences. HBS performed a case study on TAV which started in Istanbul and how it became a global brand. The case study, written by an academician at the HBS Prof. Juan Alcacer and the HBS Istanbul Research Center Director Esel Çekin, is based on a Turkish company starting from scratch and rising to become one of the greatest airport operating platforms by adopting the build- operate- transfer model in its journey fueled with a great vision. On the course of this study, 12 academicians from HBS visited Istanbul, I made a presentation to them and they decided to make a case study of TAV immediately after the presentation. Prof. Alcacer and Çekin examined our company for two months and made one-on-one interviews with our executives. Upon the publication of the study, I was invited to Boston and we explained TAV to the MBA students at a course with our CFO Burcu Geriş and Deputy CEO Serkan Kaptan. Previously you asked me about my career, well one of the milestones shaping my career was being able to represent our country by talking about our company directly to the world’s most distinguished students at Harvard University. I was very proud that a Turkish company was selected as a model.

Aviation Turkey: Now let’s talk about the issues many are wondering about… You ended your activities at the Atatürk Airport with an emotional farewell with all your employees. What type of global and national business strategies do you have for the future now that TAV HH’s greatest initiative - the most crucial airport introducing the implementation of the “Airport and Terminal ‘Build - Operate - Transfer’ Model” to the world with its achievements has been closed?

Sani Şener: We are involved with many projects across the world. We are not able to announce all these projects due to their confidentiality and as they have not yet reached a certain level of maturity. Most recently we participated in the tender launched for the Sofia Airport in Bulgaria and placed the best offer with our partner ADP. We expect the results to be announced in the days to come.

In the medium term, Airbus and Boeing expect the worldwide airline traffic to grow by an average of 4.5 - 5% every year within the next 20 years. According to the projections of the IATA, the total number of airline passengers in the world will doubled within the next 20 years. Eurocontrol’s expectation regarding the total amount of Turkish airline passengers is 7% yearly growth until 2020. A more rapid increase in air traffic is expected in developing countries as their middle class expands. Increases in population, urbanization, globalization and growth of newly developed middle classes will be the driving force of air traffic growth throughout the next 20 years especially in the main geographies where TAV is active. TAV Airports will continue to perform activities in Eastern Europe, Baltic Countries, Middle East and African Regions that constitute the geographies of TAV’s main activities.

Aviation Turkey: What is the latest status of the compensation process you have been executing with the State Airports Administration (DHMI)? What will be TAV HH’s activities in the future of this airport which will be conducting its activities as a general aviation and terminal operator? What will TAV HH’s role be in this process?

Sani Şener: We made great progress in the negotiations we have been conducting since 2018. We made many efficient face-to-face meetings with the independent audit companies that both deliver consultancy services to us and DHMI as well as with the executives of DHMI. We expect the negotiations to be finalized within a short time upon the full capacity launch of the new airport and the closing of Atatürk Airport. After that time, we will share all detailed information with the public