Dr M. Sani Şener is Member of the Board of Directors and President & CEO of the TAV Group.
“You can’t transfer culture. You can only integrate cultures and this is crucial for success in business.”
TAV was established in 1997 and this year celebrates its 20th anniversary. How has the firm evolved during these last two decades and what are the main challenges for the future?
TAV is an airport development, management and construction group; an integrated airports holding offering customized turnkey solutions for airport projects on a global scale. TAV was established to develop Istanbul Ataturk International Airport in Turkey back in 1997. Istanbul Ataturk was the first example of airport privatization in Turkey. With the successful implementation of the Build-Operate-Transfer scheme, the Government followed the same procurement route for other airport projects in the country where TAV has become the preferred partner, pioneering the creation of an entire industry. The Group is one of the very few in the world to pursue this unique business model of being an integrated and specialized airports holding. In addition to operating 17 airports worldwide, TAV boasts airport service subsidiaries for duty-free, food & beverage and information technologies. In construction, TAV Construction has a global reputation, being regarded as one of the leading contractors in the world. Overall, including all TAV companies, the Group is present at 76 airports throughout the world.
In your words “strategy means nothing unless you can execute it”. What are the basic pillars of TAV’s strategy that have driven its growth?
Istanbul Ataturk has been a learning ground for TAV. We have accumulated the necessary know-how in all areas of airport construction, finance and operations. Privatization and deregulation policies paved the way and we have grown our base in our home country with the addition of four more airports. Consequently, we decided to use our know-how to expand our portfolio to the region. Our aim was to become a global company financially, and a regional leader operationally. Accordingly, we extended our footprint to Georgia, Macedonia and Tunisia. Cultural commonality, geographical proximity and administrative similarity helped us, and we have reached 10 airports in the first decade. We managed to form harmonious partnerships and as a public company, we were able to maximize the value for our partners, shareholders, employees and all stakeholders. In the second decade, our aim is to further diversify our portfolio as our service companies began growing beyond TAV. The formula for success is simple: we formulate the right strategy, we find the right people and we execute assiduously.
TAV’s portfolio is currently composed of 17 airports, and six of them are located in the Gulf Region, one of the most challenging markets. In which other markets is TAV expected to grow?
There are 7 billion annual air traffic passengers in the world today and this number increases by 3-5 % on average every year. Although we have the financial and operational capabilities to do business on a global scale, our focus is on emerging market countries as the growth is much higher in these geographies. For this reason, the Gulf Region is very important and therefore, very competitive. During the past decade, we have established a strong presence in the region. Our construction arm, TAV Construction, has built airports at five GCC (Gulf Cooperation Council) capitals: Abu Dhabi, Bahrain, Doha, Muscat and Riyadh. The total value of contracts undertaken by TAV Construction has exceeded USD 19b and it has been ranked No. 1 in airport construction globally by ENR, consecutively for the last three years. Our success at Medinah Airport in Saudi Arabia paved the way for new opportunities and recently, we – together with our partner Al Rajhi Group – have been selected to develop and operate three more airports in the Kingdom. Additionally, we’ll be developing and operating two airports in Cuba in the near future. Besides the GCC, we’ll continue to focus on the Asian, African and Asia-Pacific markets.
Is the public-private partnership (PPP) model the future of airport projects?
Airports are strategic infrastructure projects that require a huge amount of investment. Due to the lack of public funds, new airports could not be constructed, expanded or refurbished, especially in emerging markets, hampering the sufficient supply of capacity to meet the demand created by airlines. Institutional development will lead to privatization, and creation of physical infrastructure is much easier with private sector involvement. Selecting PPP or EPC business models for an airport is directly related to the specific business plan of each country. For example in Turkey, PPP projects proved to be hugely successful, but in GCC countries, there is no lack of public funds and the airlines and airports are very well connected to each other – so they have mainly preferred to go with EPC contracts. Our company is positioned to match the requirements of PPP or EPC contracts. Both business models have advantages and disadvantages, however on the whole, from the speed of construction and the ease of operation, private airports have always been and will always be the choice of the authorities in the future.
At the “IBM Connect 2017” event in San Francisco, USA, you recently presented the new digital communication platform TAVFACE that will encourage in-house communication for TAV Group companies and employees. Can you tell us a little bit more about this platform?
TAVFACE is a common digital communication platform that gathers over 55,000 TAV employees working at 76 airports in 17 countries where TAV products and services are provided. It was developed by TAV IT, using IBM’s Connections platform. TAV has been focusing on passenger satisfaction in all its operations and creates innovative solutions using technology, which strengthens the position of TAV in the IT sector. The airport IT solutions created by TAV are preferred worldwide. Developed to create an in-house language and gather our tens of thousands of employees on the same platform, TAVFACE has increased our in-house communication synergy and efficiency.
You usually talk about the “standardization of customization” or the “TAV method”. Why is the integration of cultures so important in airport projects?
Globalization has enabled the free flow of capital, goods and people. In today’s world you can transfer capital, goods and know-how between geographies, but you can’t transfer culture. You can only integrate cultures and this is crucial for success in business. At TAV, we have accumulated a huge amount of know-how about airport business. Our ability to integrate cultures has provided us with the basis to put this know-how into use in different regions. We are able to propose customized solutions to meet the requirements of varied airport projects around the world. Additionally, we can do this in a standardized and systematic fashion in order to create the greatest value for our stakeholders.