What Istanbul's newest airport will mean for Turkey and its investors

Published 31.10.2018 22:12

Yesterday, I was on the inaugural flight from Istanbul Airport to Ankara. Turkish Airlines flight 2124 became the first commercial flight to take off from the airport, and it went off without a hitch. In short, the new airport is massive. The one terminal that is currently operating is on par with the largest airports in the world. Istanbul's newest airport will undoubtedly be a vital addition to an economy in need of an increase in investment.

Fifty percent of all Fortune 500 companies are headquartered within 10 miles of a hub airport. That's a staggering statistic that illustrates the importance of being connected to global transport networks. Istanbul's current airport, which this new airport is meant to replace, is bursting at the seams. Operating at way over full capacity, Ataturk Airport was long overdue for retirement. This new airport will carry 200 million passengers annually when all phases of construction are completed in the next five years and will be able to carry 90 million passengers by the end of the year.

Critics of the airport have said that it was both unnecessary and too big, and have cited environmental concerns. The first two points of criticism are ones I can address directly from personal experience. Istanbul had no choice but to build a new airport. Istanbul has become a global hub, and Turkish Airlines can no longer grow at this rate without added flight capacities, which depended on an increase of capacity coming online in the form of a new airport. Nearly all gates of the current airport are always full, passengers are strewn throughout the halls leading to gates and the common areas are standing room only.

As for the third criticized point, the Turkish government notes that there were strip mines in the area where the current airport is and that the area was an environmental disaster before any airport was planned. This airport replaced the coal mines and measures have been taken to offset any environmental impact according to the government.

A final point made by critics about the airport specifically and infrastructure projects in general is that Turkey cannot afford investments at a time of fiscal tightening and a heightened risk environment. While it is true that funds are far more valuable and thus more scarce now than in previous years, Turkey has no choice but to go ahead with investing in upgrading infrastructure. Istanbul Airport was a no-brainer and will immediately add to the bottom line of Turkish Airlines and Turkish companies doing business dependent on air travel and cargo. Having been completed without any taxpayer funds made the project even more attractive.

Should there be other infrastructure projects where the math works out, with little to no taxpayer investment and added benefit to the economy, the government should not hesitate to invest. Global economic crises appear to be on the horizon, and it will only be through these types of large-scale investments that Turkey will be able to best weather them.

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