Sochi is a well-known Russian tourism location and the venue of the 2014 Olympic Games. Sochi Airport is located close to the Black Sea and Russia’s largest tourism destination. It serves about 5 million tourists each year. A Russian oligarch acquired four regional airports in 2004 – including Sochi. At that time, Sochi Airport accounted for about 500,000 domestic passengers. About 5% of all tourists came to Sochi by air. However, the airport was significantly underdeveloped and the passenger terminal had to be completely refurbished. The airport was a loss-making business and lacked the management experience to achieve the turnaround. The main drivers for growth were the increasing number of domestic and international summer and winter tourists.
In 2006, the new airport management engaged ACV to support the turnaround process. We developed a unique strategic airport development plan, including the master plan, airline marketing and a concept for ground handling services and retailing. In addition, we provided know-how transfers to the top management over a period of about 5 years.
Sochi Airport required significant equity injections until it completed its turnaround in 2010. At the time, the airport accounted for 1.8 million passengers. Thus, Sochi Airport turned from a loss making business into a profitable and well-managed infrastructure asset.
In 2012, 50% of the four regional airports were acquired by Singapore’s Changi Airport and the Russian Sberbank for a transaction value of about USD 1bn. Some USD 450 million was paid alone for Sochi Airport.