Fulya Pekcan - TAV › uploads › documents › ...2 TAV Airports 211 Annual Report Shareholding Structure Strong, institutional shareholder base Shareholder Number of Shares (1)

TABLE OF CONTENTS

TAV AT A GLANCE 02 Who We Are 10 What We Do 12 How 2011 Unfolded 14 Where We Operate 16 Highlights of 2011 22 Outlook for 2012

Yeşim Çınar TAV Security Security Officer

Selda Adalı Tunçel TAV Security Security Officer

Merih Taraktaş TAV Istanbul Terminal Operations Officer

Mustafa Çankaya TAV Airport Hotel Reservation Officer

Mesut Zerman BTA Software Specialist

Nursemin İşçimen TAV Airport Hotel Reservation Officer

Serdar Pektezol TAV IT Car Park System and Application Administrator

Sibel Tatlısu TAV Airports Financial Reporting Senior Specialist

Uğur Çolak TGS VIP/CIP Passenger Services Officer

Songül Aydın BTA Food Safety Chief

Uğur Konyar TAV Security Security Officer

Begüm Ay TGS Passenger Services Officer

Fulya Pekcan TAV Istanbul Ramp Tower Officer

Esen Sefer BTA Accounting Officer

Arzu Güzelaydın Ömür TAV Istanbul TOC Officer

M. Cengiz Yücel ATÜ ATU Bazaar Shop Supervisor

ASSESSMENTS 24 Board of Directors’ Message 26 CEO’s Message

TAV Airports Employees whose Paintings are Featured in the 2011 Annual Report

OPERATIONS 28 Airport Operations 64 Service Companies 78 Investor Relations and Stock Performance 80 Glossary

* This project was carried out under the supervision of artist Köksal Çiftçi.

2 TAV Airports 2011 Annual Report

Shareholding Structure Strong, institutional shareholder base

ShareholderNumber of

Shares (1) Share ( %)

Tepe İnşaat Sanayi A.Ş. 94,664,477 26.1

Akfen Holding A.Ş. 94,886,071 26.1

Sera Yapı Endüstrisi ve Ticaret A.Ş. 14,644,716 4.0

Non-floating (Other) 12,775,048 3.5

Free-float (Other) 146,310,939 40.3

Total 363,281,250 100.0 (1) As of December 31, 2011

Shareholders ( %)

Non-floating (Other) 3.5%

Akfen Holding A.Ş. 26.1%

Tepe İnşaat Sanayi A.Ş. 26.1%

Sera Yapı Endüstrisi ve Ticaret A.Ş. 4.0% Free-float (Other) 40.3%

Who we are?

Tepe İnşaat Sanayi A.Ş. Operating since 1969, Tepe İnşaat is among the leading companies in construction.

26.1%

Akfen Holding A.Ş. Akfen Holding is active primarily in infrastructure investments as well as in maritime investments (e.g. port operations), energy, real estate and construction.

26.1%

Sera Yapı Endüstrisi ve Ticaret A.Ş. Sera Yapı Endüstrisi ve Ticaret A.Ş. focuses on infrastructure and superstructure construction projects.

4.0%

OTHer SHAreHOlderS

Free-float (other)

40.3%Non-floating (other)

3.5%

FOuNdING SHAreHOlderS

3TAV at a Glance Assessments Operations

Organizational Structure

AIrpOrT OperATIONS SerVIce cOmpANIeS

Atatürk Airport (100%)

Esenboğa Airport (100%)

Adnan menderes Airport (100%)

Gazipaşa Airport (100%)

TAV Operation Services (100%)

TAV IT (99%)

TAV Security (100%)

* Only Commercial Areas

BTA (67%)Bilintur (33%)

ATÜ (50%)unifree (Heinemann)

TAV Airports served 451 thousand flights and 53 million passengers in 2011, bolstering its presence further in Europe and the Middle East. The Company undertook an ambitious investment program in 2011 whereby it took over the operation of the commercial areas of the Riga Airport in Latvia and won the tenders for Izmir and Medina Airports. The Company enhanced its recognition, reputation and brand value on a global scale through these investments.

Havaş (65%)HSBc (28.3%)İş Private Equity (6.7%) TGS (50%)

Havaş europe (67%)

Skopje and Ohrid Airports (100%)

riga* Airport (100%)

Batumi and Tbilisi Airports (76%)

monastir and enfidha Hammamet Airports (67%)

madinah Airport (33%)


milestones A global brand in airport operations

1997 • TAV was founded and it was awarded

the tender for the Istanbul Atatürk Airport.

1999 • ATÜ, which was established as a TAV

Airports venture to provide duty free shopping services, was incorporated into the TAV corporate structure; BTA, which provides food and beverage services, was established.

2000 • TAV began operating the Istanbul

Atatürk Airport International Terminal.

2001 • ”primeclass” CIP Service was launched.

2004 • BTA began operating the Istanbul

International Airport Hotel.

• Tepe - Akfen assumed construction and operation of the Esenboğa Airport Domestic and International Terminal.

• TAV İşletme Hizmetleri A.Ş. (TAV Operation Services) was founded.

2005 • TAV Airports was awarded the tender to

operate the Atatürk Airport International and Domestic Terminal Buildings, Parking Garage and General Aviation Terminal for 15.5 years.

• 60% of Havaş shares were acquired.

• Construction and operation of the Izmir Adnan Menderes International Terminal was assumed by TAV. TAV Bilişim Hizmetleri A.Ş. (TAV IT) was founded and the information technology services developed during the course of construction and operation of airport terminals were consolidated under this company.

• TAV was awarded the tender for the Tbilisi Airport in Georgia.

2006 • Operation and construction services

were restructured under “TAV Havalimanları Holding A.Ş.” (TAV Airports) and “TAV İnşaat” (TAV Construction) as two separate holding companies.

• Izmir Adnan Menderes Airport International terminals commenced service.

• Esenboğa Airport Domestic and International Terminal commenced operation.

• TAV Özel Güvenlik Hizmetleri A.Ş. (TAV Security) was founded and the private security services developed during the course of the construction and operation of the airport terminals were consolidated under this company.

2007 • TAV Airports Holding shares were

floated.

• Tbilisi Airport’s new passenger terminal commenced service.

• Batumi Airport commenced operation.

• TAV Airports was awarded the tender for the Monastir and Enfidha Hammamet Airports in Tunisia.

• 40% minority shares of Havaş were acquired. Havaş became a wholly-owned subsidiary of TAV Airports.

• TAV Airports became 100% owner of TAV Izmir and TAV Esenboğa.

• TAV Airports was awarded the tender for the operation of the Antalya Gazipaşa Airport.

• The Hopa Terminal operated by Havaş commenced service.

2008 • TAV Airports assumed operation of

Tunisia’s Monastir Airport.

• TAV Gazipaşa Yatırım-Yapım ve İşletme A.Ş. (TAV Gazipaşa) was founded to operate the Antalya Gazipaşa Airport.

• TAV Airports was awarded the tender for the operation of the airports in Macedonia’s capital Skopje and in Ohrid, as well as the construction of the Shtip Cargo Airport, of which TAV Airports also retains optional rights to operate. The related concession contracts were signed.

• Havaş was awarded the tender for a 50%-shareholding partnership in TGS (Turkish Ground Services Co.), a subsidiary of Turkish Airlines.

Who we are?


2009 • TAV Airports increased its issued capital

by TL 121 million.

• TAV Gazipaşa commenced operation at the Antalya Gazipaşa Airport.

• The Enfidha Hammamet Airport investment was completed.

• Agreement was reached for the sale of Havaş shares to HSBC (28%) and İş Private Equity (7%).

• Havaş acquired a 50% equity stake in TGS.

• IFC (International Finance Corporation), a World Bank institution, acquired a 15% equity stake in TAV Tunisie.

2010 • TAV Airports assumed the operation of

Macedonia’s Skopje and Ohrid airports for 20 years.

• The sale of the minority shares of Havaş to HSBC and İş Private Equity was completed.

• TAV signed a “Global Training Center” agreement with Airports Council International (ACI), whose membership includes more than 1,600 airports from around the world.

• TAV Operation Services launched the TAV Passport Card, which offers many services and privileges at airports operated by TAV.

• The operation of five service points (Kantin, Beerport, Kokpit Cafe, Kokpit Brasserie and İç Hatlar Botanik Cafe) at the Istanbul Atatürk Airport Domestic Terminal was assumed by BTA as of July 1, 2010.

• TAV Airports sold 18% of the shares of TAV Tunisie SA to the Pan African Infrastructure Development Fund.

• Havaş acquired a 50% equity stake in North Hub Services (NHS, Havaş Europe), a provider of ground handling services at Latvia’s Riga Airport.

• TAV Airports was awarded the tender for the operation of duty free, catering and other commercial areas at Latvia’s Riga Airport.

• TAV Airports Holding raised its ownership stake in TAV IT from 97% to 99%.

2011 • TAV commenced service at Latvia’s Riga

Airport after assuming the operation of the commercial areas of this airport.

• TAV Airports Holding raised its ownership stake in TAV Security’s share capital from 66.67% to 100%.

• TAV Airports Holding’s ownership stake in TAV Urban Georgia’s share capital increased from 66% to 76%.

• TAV Airports Holding raised its ownership stake in TAV Batumi Operations LLC’s share capital from 60% to 76%.

• BTA Denizyolları (BTA Sea Lines) was founded as a 50%-50% joint venture of BTA and TASS; BTA commenced service at İDO (Istanbul Fast Ferries Co.) locations.

• Skopje Airport’s new terminal commenced operation after the completion of its construction.

• TAV Airports, jointly with its partners Al Rajhi and Saudi Oger, signed a contract with Saudi Arabia’s Civil Aviation Authority GACA for the build-operate-transfer project of the Madinah Airport, the first airport privatization in Saudi Arabia.

• TAV Mobile, the mobile phone app that provides access to real time information at the airports operated by TAV Airports, was launched.

• TAV Airports Holding was awarded the tender for the leasing of the operation rights of Izmir Adnan Menderes Airport’s existing International Terminal, CIP, Domestic Terminal and auxiliary structures as the highest bidder on November 17, 2011.

• Havaş, a 65%-owned subsidiary company of TAV Airports Holding, increased its ownership stake in North Hub Services (“NHS”), a company providing ground handling services at Latvia’s Riga, Sweden’s Stockholm and Finland’s Helsinki airports, from 50% to 66.7% as of December 20, 2011. NHS will continue to operate at these airports under the “Havaş Europe” commercial brand.


Service companies

Business model and Strategy High level of integration and customer satisfaction achieved through a unique business model

Duty Free

Ground Handling

Food & Beverage

Information Technology

Security

Operation Services

Airport Operations

Atatürk Airport

Esenboğa Airport

Adnan Menderes Airport

Gazipaşa Airport

Madinah Airport

Monastir and Enfidha

Hammamet Airports

Batumi and Tbilisi Airports

Skopje and Ohrid Airports

Riga Airport

TAV Airports Holding

Who we are?


Inorganic Growth New investments in new

regions: Inorganic growth, on the other hand, is accomplished with investments in airport and service companies. The Holding continues to enrich its existing

portfolio by adding new airports and service companies

to it in the target region of Europe, Russia and the

Commonwealth of Independent States, Baltic Nations and

Georgia, Middle East, Africa and India.

Generating Value TAV Airports is increasing its

total value generation by strengthening the integration between its business lines.

Organic Growth Soaring passenger traffic: Organic growth is achieved through an increase in the

passenger traffic of the airports currently operated by TAV. While the Holding’s revenues grow in parallel

with the soaring passenger traffic, costs increase less than income since the majority of the Company’s expenditures consists of fixed costs. Thus

the Holding takes advantage of an operational leverage effect and generates higher EBITDA.


Investment priorities At the center of the world’s attention

The fastest growing aviation market in Europe

17% Compound Annual Growth Rate in passenger traffic between 2003 and 2011

11%Projected Compound Annual Growth Rate* in passenger traffic from 2009 to 2023

* Compound Annual Growth Rate (CAGR) calculated based on the Turkish Ministry of Transport’s total airline passenger traffic projection for Turkey of 350 million in 2023

Easy Access to the Rapidly Developing Middle East and North Africa Regions

Diversified portfolio composition

1stTurkey’s leading airport operator

12Number of airports operated in Turkey, Georgia, Tunisia and Macedonia*

* The commercial areas of Riga Airport are operated by TAV Airports.

TAV plans to begin operating the airport in Madinah, Saudi Arabia in the first half of 2012.

Strong growth momentum (2006-2011 period)

55%Compound Annual Growth Rate (CAGR) in EBITDA

17%Compound Annual Growth Rate (CAGR) in Revenues

18%Compound Annual Growth Rate (CAGR) in Passenger Traffic

19%Compound Annual Growth Rate (CAGR) in Employment

TAV Airports: A leading airport operator with a balanced portfolio structure

€ 53 million net profit: Steady financial performance and cash generation capability

Turkey: An alluring market with strong growth potential

Who we are?


Source: Determining Hub Efficiency in Europe, Middle East and North Africa: A Comparative Study; E. Nur Günay, Şükrü Nenem

Transportation Hubs Lowest cost in transfer flight connections ( %)

33

23

16

13

13

3

1

Istanbul Atatürk

Frankfurt

Cairo

London

Dubai

Paris

Madrid

Istanbul: The Region’s Most Efficient Transfer Hub

Istanbul stands out as the most efficient hub when compared with the other seven active and developing air transit hubs.


Turkey

€ 422 millionIstanbul Atatürk Airport (100%)

revenue: € 344 million

Share of Total Revenues

33%

Share of EBITDA

53%

Number of Employees

2,413

Ankara Esenboğa Airport (100%)

revenue: € 42 million Share of Total Revenues

4%Share of EBITDA

8%Number of Employees

840

Georgia€ 25 million

Batumi and Tbilisi Airports (76%)



2%

Share of EBITDA

5%

Number of Employees

747

Macedonia € 17 million Skopje and Ohrid Airports (100%)



2%

Share of EBITDA

1%

Number of Employees

664

Izmir Adnan Menderes Airport (100%)



3%

Share of EBITDA

9%

Number of Employees

559

Gazipaşa Airport (100%) Number of Employees

19

Tunisia Monastir and Enfidha Hammamet Airports (67%)

revenue: € 35 millionShare of Total Revenues

3%Share of EBITDA


693

Latvia Riga Airport (commercial activities) (100%)

Number of Employees

2

Saudi ArabiaSaudi Arabia Madinah Airport (33%)

Overview12 airports on three continents

revenue

€ 498 million Share of Total Revenues

47%Share of EBITDA

77%Number of Employees*

5,937

Airport Operations

* As of December 31, 2011

What We do?


duTy Free FOOd & BeVerAGe

GrOuNd HANdlING OTHer

BTA (67%)



8%Share of EBITDA


2,323

Has a total seating capacity of 12,500 at 146 points.

Supplies bakery products to various chains in Turkey.

Operates the 131-room Istanbul Airport Hotel.

Operates in Turkey, Georgia, Tunisia and Macedonia.

Commenced service at İDO (Istanbul Fast Ferries Co.) locations via BTA Denizyolları (BTA Sea Lines).

Havaş (65%)



19%Share of EBITDA


9,928

Operates at 22 airports in Turkey including Istanbul, Ankara, Izmir and Antalya with a market share of approximately 65%.

TGS (50%) operates in Istanbul, Ankara, Izmir, Antalya and Adana.

Has a 67% ownership stake in Havaş Europe.

Operation Services, Information Technology (IT) and Security



6%

Number of Employees

661

TAV Operation Services (100%)

Provides commercial space allocation and tourism services.

TAV IT (99%) Provides airport IT services.

TAV Security (100%) Provides security services at the Istanbul, Ankara, Izmir and Gazipaşa airports.

ATÜ (50%)



20%Share of EBITDA


1,420

Operates Turkey’s largest duty free shops.

Established a partnership with Unifree, a subsidiary of the leading German travel retailer Heinemann.

Operates in Turkey, Georgia, Tunisia, Macedonia and Latvia.

revenue

€ 552 millionShare of Total Revenues

53%Share of EBITDA

23%Number of Employees*

14,332

Service Companies

* As of December 31, 2011


TAV in Figures TAV’s rapid and steady ascent continues.

How 2011 unfolded?

Consolidated revenues increased by 12% in 2011. Aviation income (including ground handling) constituted 46% of total income, while non-aviation income made up the remaining 54% of revenues. A large portion of the revenues is denominated in foreign currency.

Revenues grew by 12% while EBITDA was up by 21% in 2011 thanks to operational leverage.

* Revenues and EBITDA were adjusted to include guaranteed passenger revenues but exclude construction revenues and expenditures.

Consolidated Revenues* (€ million)

Consolidated EBITDA* (€ million)

785

640

627

2011

2010

2009

2008

5082007

4022006

881

212

167

141

2011

2010

2009

2008

772007

292006

257

12%

21%

17% compound annual growth rate

(CAGR) between 2006 and 2011




Passenger traffic at the airports operated by TAV Airports increased by 11% compared to the previous year and reached 53 million in 2011.

TAV Airports provides services at 12 airports in five countries on three continents with nearly 20 thousand employees.

Average Number of Employees

17,535

12,194

11,289

9,473

2011

2010

2009

2008

2007

8,1462006

19,838

13%

Passengers (million)

232006

48

42

41

2011

2010

2009

2008

302007

53

11%






Operations map expanding operations in Turkey and abroad

Where We Operate?

MACEDONIA

TAV’s 2011 commercial Flight Traffic 11.9 thousand

TAV’s 2011 passenger Traffic 838 thousand

revenue by country 2%

Skopje

Ohrid

TUNISIA


TAV’s 2011 passenger Traffic 2.3 million


enfidha

monastir

Passenger Fees

Ground Handling

Landing

Parking

Fueling

Duty Free

Food and Beverage

Car Park


TURKEY

TAV’s 2011 commercial Flight Traffic 396 thousand

TAV’s 2011 passenger Traffic 48 million


Istanbul Atatürk

Ankara Esenboğa

Izmir Adnan menderes

Antalya Gazipaşa

GEORGIA


TAV’s 2011 passenger Traffic 1.2 million


Tbilisi

Batumi

LATVIAriga Airport (Commercial Activities)

SAUDI ARABIA madinah Airport Operations are to be taken over in the first half of 2012.


Operational Summaryrapid uninterrupted growth in every line of business

Highlights of 2011

International passenger traffic at the airports operated by TAV Airports increased by 9% to reach 31.9 million.

International Passengers (million)

29.3

2011

2010

31.9

9%

In line with the expanding operations map, the Company’s average number of employees increased by 13% in 2011.

TAV Airports Average Number of Employees

17,535

2011

2010

19,838

13%

Domestic passenger traffic at the airports operated by TAV Airports increased by 14% to reach 20.8 million.

Domestic Passengers (million)

18.3

2011

2010

20.8

14%

International commercial flights at the airports operated by TAV Airports were up by 5% in 2011.

International Commercial Flights

266,991

2011

2010

281,123

5%

Domestic commercial flights at the airports operated by TAV Airports were up by 14% in 2011.

Domestic Commercial Flights

148,759

2011

2010

170,030

14%


Financial Summaryrecord-breaking financial success

TAV Airports’ revenues increased 12% and reached € 881 million in 2011 as a result of organic and inorganic growth.

Operating Revenues* (€ million)

785

2011

2010

881

12%

EBITDA soared by 21% in 2011 thanks to the operational leverage effect.

EBITDA* (€ million)

212

2011

2010

257

21%

TAV Airports generated net profit of € 53 million in 2011 thanks in part to the 11% growth in passenger traffic at the airports operated by the Company.

Net Profit (€ million)

50

2011

2010

53

6%

Summary Income Statement* (€ million) 2010 2011

Operating Revenues 785 881

Operating Expenses 632 689

Net Operating Profit 153 192

Net Financial Expenses (57) (67)

Profit/(Loss) Before Tax 64 92

Income Tax Benefit/(Expense) (12) (40)

Net Profit/(Loss) 50 53

Profit/(Loss) Attributable to Minority Interests 2 (1)

EBITDA 212 257

EBITDAR 342 387

* Includes guaranteed passenger revenues but excludes construction revenues and expenditures. (Total guaranteed passenger income at Izmir and Ankara was € 33 million for 2011.)


Summary Balance Sheet (€ million) 2010 2011

Cash, Cash Equivalents and Securities 32 76

Restricted Bank Balances 382 356

Total Assets 2,039 2,081

Financial Liabilities 1,236 1,224

Total Liabilities 1,499 1,519

Shareholders’ Equity 540 562

Net Debt 821 792

Total Assets (€ million)

2,039

2011

2010

2,081

2%

Shareholders’ Equity (€ million)

540

2011

2010

562

4%

Free cash flow (net cash generated from operations - cash used in investments) in 2011 was € 250 million, up from € 217 million in 2010.

(€ million) 2010 2011

Net Cash Generated from Operations 336 355

Acquisition of Property and Equipment (80) (43)

Addition to Airport Operation Rights (38) (61)

Acquisition of Intangible Assets (1) (1)

Free cash Flow (FcF) 217 250

Free Cash Flow

Financial Summary

Highlights of 2011


Consolidated Net Debt (€ million)

821

2011

2010

792

-4%

Composition of Debt (€ million)

1 year

500

400

300

200

100

0

2 year 3 year 4 year 5 year 5+year

Other

TAV Holding-standalone

Havaş

TGS

TAV Gazipaşa

TAV Macedonia

ATÜ

TAV Georgia

TAV Izmir

TAV Esenboğa

TAV Tunisie

TAV Istanbul

Capital Expenditures (€ million)

Property and Equipment Airport Operation Rights Intangible Assets

The consolidated net debt of TAV Airports Holding was down by 4% to € 792 million.

2011

2010

2009

2008

2007

120

215

312

119

106


Highlights A productive and successful year when major investments were undertaken

TAV Airports Holding was awarded the tender held by the Turkish State Airports Authority (DHMİ) for the leasing of the operation rights of Izmir Adnan Menderes Airport’s existing International Terminal, CIP, Domestic Terminal and auxiliary structures as the highest bidder on November 17, 2011.

Skopje Airport, annual passenger capacity of which was increased to 4 million by TAV Airports, commenced service.

TAV Airports, through the consortium it has formed jointly with its partners Al Rajhi and Saudi Oger, was awarded the tender for the operation of the Madinah Airport for 25 years.

TAV Airports, jointly with its partners Al Rajhi and Saudi Oger, signed a contract with Saudi Arabia’s Civil Aviation Authority GACA for the build-operate-transfer project of the Madinah Airport, the first airport privatization of Saudi Arabia.

Adding Istanbul Fast Ferries Co. (İDO) to its service network, BTA acquired the operation right for 33 food and beverage sales points in terminals, fast ferries and ferryboats operated by İDO.

TAV Mobile, the app developed for smart phones and tablet PCs that provides passengers access to real time information, was launched.

A wine store featuring mostly Georgian wines was opened in the duty free section of the Tbilisi Airport.

Izmir Adnan Menderes Airport was granted Level 1 Carbon Accreditation Certification by the ACI in 2011.

The “open gate” policy was initiated at the Ankara Esenboğa Airport.

An MoU (Memorandum of Understanding) was signed between the Turkish State Airports Authority (DHMİ), TAV and Turkish Airlines for the CDM (Collaborative Decision Making) project in order to enhance passenger, airline and sector satisfaction and optimize capacity at the Istanbul Atatürk Airport.

The trigen facility at the Istanbul Atatürk Airport resumed operation, resulting in major energy cost savings.

TAV assumed the operation of 1,300 square meters of commercial area at Latvia’s Riga Airport at the beginning of 2011 and commenced operations. Total area taken over by TAV Airports reached 2,295 square meters during the year.

TAV received the “Best Partner” award from the Riga Airport management.

TAV Airports Holding raised its ownership stake in TAV Security’s share capital from 66.67% to 100%.

TAV Airports Holding’s ownership stake in TAV Urban Georgia’s share capital increased from 66% to 76%.

TAV Airports Holding raised its ownership stake in TAV Batumi Operations LLC’s share capital from 60% to 76%.

Havaş, a 65%-owned subsidiary company of TAV Airports Holding, increased its ownership stake in North Hub Services (“NHS”), a company providing ground handling services at Latvia’s Riga, Sweden’s Stockholm and Finland’s Helsinki International Airports, from 50% to 66.7% as of December 20, 2011.

Skopje Airport’s new terminal commenced operation after the completion of its construction.

TAV Macedonia was deemed worthy of the best project award in the Public Investment category at the International Real Estate and Investment Fair that was organized for the first time in 2011.

Istanbul Atatürk Airport International and Domestic Terminal Food Court area was renovated.

TAV Operation Services and the Bank of Georgia inked the partnership agreement allowing exclusive clients of the Bank of Georgia to use the “prime class” Lounge.

Highlights of 2011


AwardsInternational awards won as a result of diligent and dedicated efforts

The 2010 Annual Report of TAV Airports was deemed the “Best of Show” (Best in the World) at the International Annual Report Competition held in New York City, USA.

The 2010 Annual Report was recognized with the Gold Award in the “Airport Management” category at the “Galaxy Awards” competition organized by MerComm in the United States.

TAV Airports Holding’s 2010 Annual Report received the Gold Award in the “Transportation and Logistics” category from the League of American Communications Professionals (LACP) while ranking in the top 50 reports in the Europe-Middle East-Africa (EMEA) region and among top 10 reports in Turkey.

At the “Turkey Investor Relations Awards” organized for the third time in 2011 by Thomson Reuters Extel Surveys and Acclaro, TAV Airports won awards in six categories, “Best Investor Relations CEO,” “Best Investor Relations CFO,” “Best Investor Relations Officer,” “Best Investor Relations Website,” “Best Investor Relations Unit” and “Best Disclosure of Financial Results,” including a first-place finish in the “Best Investor Relations CEO” category.

ISS Corporate Services (ICS), one of the world’s most prestigious independent corporate governance rating organizations, increased TAV Airports’ corporate governance rating score to 9.09. As a result of this score, TAV Airports Holding became the holder of the second highest rating in the Istanbul Stock Exchange Corporate Governance Index.

The Emerging Markets Airport Awards recognized TAV Airports in three categories. At the award ceremony held in Dubai, United Arab Emirates, TAV Airports was chosen as the “Best Emerging Market Airport Management Company.” Izmir Adnan Menderes Airport International Terminal captured the “Best Emerging Market Achievement Airport for Eco Innovation” title while Georgia’s Tbilisi Airport was deemed the “best” in its region (Russia/CIS); both of these airports are operated by TAV Airports.

As a result of its leadership in internal audit, TAV Airports was deemed worthy of the “Internal Audit Awareness” award by the Internal Audit Institute of Turkey (TİDE) Board of Directors.

TAV Georgia won the “Golden Brand Award Best Brand” in the “Public Transport and Service” category at the Golden Brand 2010 organized by Global Idea, a leading market research firm in Georgia, and The Financial, a news portal.

TAV Airports was recognized with the 2011 Corporate Governance Award 2011 by the World Finance Magazine.

Moodie awarded Cakes & Bakes, a subsidiary company of BTA Catering, with the “Best Supplier” award.

Istanbul Atatürk Airport was named “Best Airport Operator of the Year” at the Skalite 2011 Awards, known as the “Tourism Oscars” in the industry and organized by Skal International Istanbul Club to raise the bar for quality in tourism.

W3 Awards gave the “Silver Award” to the Istanbul Atatürk Airport website in the “Transportation” and “Travel” categories and to the TAV Investor Relations website in the “Financial Services” category.

TAV Passport was deemed worthy of the “Best Service” Award by gecce.com.

ICT Summit Eurasia - Bilişim Zirvesi’11 designed as a platform to encourage cooperation within the Eurasia region, recognized the communication technology projects undertaken between the countries of the region. Leaving many established information technology companies behind with its Enfidha - Hammamet Airport information technology infrastructure project, TAV IT was awarded the first place at the award ceremony.

TAV Macedonia, won the best project award at the Real Estate and Investment Exhibition organized for the first time in Macedonia in 2011.


Outlook for 2012 New projects undertaken on the path to becoming a world renowned company

pASSeNGer ANd cOmmercIAl FlIGHT TrAFFIc IN THe WOrld

passenger Traffic Growth in Selected Airports (%) (2011)

TAV Airports 11

Schiphol 10

Europe 7

Frankfurt 7

Aena 6

Aéroport de Paris 6

World 5

BAA 4

TAV Airports surpassed the passenger traffic growth rates in the world and in Europe and continued its trend of outperforming the industry in 2011. TAV Airports, the leading brand in the rapidly developing Turkish aviation industry, also continues to expand its business geographically by assuming operation of new foreign airports.

Turkey’s number 1 airport operator with strong regional growth performance

Holding the concession rights to operate the airports of Turkey’s largest three metropolitan areas (Istanbul Atatürk, Ankara Esenboğa, Izmir Adnan Menderes), TAV Airports expanded its operations map overseas to include Tunisia, Georgia, Macedonia, Latvia and Saudi Arabia. TAV continues to grow by seizing on regional infrastructure development opportunities.

2011 Passenger Traffic (million)

Ankara* 8.5 Antalya 25.1

Istanbul SAW 12.7 Izmir* 8.5 Istanbul Atatürk* 37.5

* Airports operated by TAV

Outlook for 2012


Turkish Aviation Industry and TAV Airports

Turkish Market Total Passenger Traffic (million)

TAV Airports Total Passenger Traffic (million)

2011 117

2003 34

2007 70

2009 86

2005 57

2010 103

2006 65

2008 79

2004 45

2011 53

2003 9

2007 30

2009 42

2005 17

2010 48

2006 23

2008 41

2004 10


between 2003 and 2011



Source: DHMİ (State Airports Authority, excluding transit passengers)


Board of directors’ message 2011 has been another stellar year when TAV Airports’ concrete accomplishments were recognized with a large number of awards.

Sibe

l Tat

lısu,

TAV

Air

port

sBoard of directors’ message


The gigantic turbulences experienced in the world economy and in the financial markets that serve to price in the economic expectations have left a number of destructive and permanent marks on the global scale since 2007. As many industries go through difficult times during this period, undoubtedly the aviation sector that TAV operates in is also significantly impacted by these adverse circumstances.

TAV Airports has overcome many crises in its relatively short history, from the September 11 attacks and the avian flu to the volcano eruption in Iceland and the Russia-Georgia war in Georgia, the last such crisis being the popular uprising in Tunisia. From this perspective, we can say that crises have become a part of the natural flow of life for TAV Airports Holding.

When we look back and analyze the operational and financial performance of and the giant strides made by TAV Airports, which operates in the aviation industry that is highly sensitive to the business cycle and economic developments, over the last five years that was a period of major economic turbulence, we see a bastion of stability operating in an unstable background. Growing its passenger traffic, revenues and EBITDA by an average of 18 %*, 17 %* and 55 %*, respectively, over the last five years, the Company is realizing its policy of being a center of stability in Turkey’s region in its own economic sphere of influence thanks to its strong and steady growth. Continuing to grow at an accelerating pace, TAV Airports has become a leading company that steers its industry in all regions in which it operates.

This journey that began 15 years ago with a single airport in our own backyard led to today’s regional powerhouse that serves at 12 airports on three continents. We always stood out with our values and work ethic throughout this journey. Leveraging the opportunities presented by the culture we all grew up as part of, we worked in utmost harmony with many partners from many different faiths and speaking many different languages on three continents. As one of the most effective practitioners of the matrix-style organizational structure that has been gaining prominence in the contemporary management literature, TAV Airports steered its operations that now span a vast geography in the most efficient manner.

TAV Airports owes its current success to its employees, each of whom is among the best professionals in his or her field. We created a corporate culture at the Company, which makes the best of the opportunities offered by our unprecedented organizational structure, where the best is achieved in the shortest amount of time irrespective of external circumstances. This comes about as a result of engaging collective intelligence in decision-making processes as well as each employee being equally responsible as all other employees with regard to the Company’s future.

As affirmed by independent rating agencies, we continued to be a “best practice” example of corporate governance by thorough implementation of corporate

governance standards in the most comprehensive manner in Turkey. While conducting our business, we aimed to attract billions of dollars of foreign capital into Turkey while maintaining the sensitive balance between professional discipline and creative freedom. We deployed the foreign capital that we have secured for growth, but we also managed to maintain the distinction of being an organization that makes decisions expeditiously and shares information effectively while growing.

One of the most important elements of TAV Airports Holding’s corporate culture is its focus on diversity and its understanding that sees diversity as wealth. Approaching our employees in accordance with this philosophy, we managed to add the personal knowledge and know-how of each employee to the Company’s shared intellectual capital pool. Consequently, TAV Airports became an exemplary company in working in harmony with different cultures in a very diverse set of regions.

We anticipate the volatility to continue in every segment of the economy for a little longer in the period ahead. TAV Airports Holding will continue to represent Turkey successfully on the global stage thanks to the impetus stemming from its values that brought the Company to this day as well as its invaluable experience. We would like to express our deepest gratitude to our employees who made TAV Airports what it is today.

Ali Haydar KurtdarcanVice Chairman of the

Board of Directors

Hamdi AkınChairman of the

Board of Directors

Dr. M. Sani ŞenerMember of the Board of

Directors, President & CEO * CAGR: Compound Annual Growth Rate


ceO’s message TAV Airports continued to grow faster than the industry despite the global economic uncertainties and the instabilities created by the radical transformations taking place in the regions where the company operates.

Sibe

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lısu,

TAV

Air

port

s ceO’s message


Esteemed Shareholders,

Founded in 1997, TAV Airports has become a respected regional brand in the Eurasia/Africa axis in merely 15 years, which would be considered as short as the blink of an eye as far as the history of corporations is concerned. The most important factor we owe this accomplishment to is the diversity-oriented perspective that we have acquired from Turkey, which is among the few major centers of diversity on the planet.

Thanks to this perspective that allows TAV Airports to act together in harmony with cultures that are very different from each other, the Company is able to create value by finding a common denominator among a diverse array of cultures spanning a vast geography from northern European Union countries such as Latvia, Finland and Sweden to Georgia, Macedonia, Tunisia and Saudi Arabia. As the open and friendly foreign policies pursued by Turkey strengthen our ties with our neighbors with each passing day, they also help TAV Airports extend its journey that began in its own homeland toward the greater region in leaps and bounds.

In this regard, we have recorded a major landmark in the Company’s history in 2011. TAV Airports Holding, as part of the TIBAH consortium that it established jointly with Al Rajhi and Saudi Oger, two leading groups in the Middle East was awarded the tender for the capacity expansion and operation until 2037 of the Madinah International airport, which holds a very special place in our hearts for being one of the holy cities of Islam. We are all very excited and proud to have the privilege of designing and operating the gate of entry to the city of Madinah with the investment we will make there.

During the year, TAV Airports was also awarded the tender for the operation, until year-end 2032, of the domestic and international terminals of the Izmir Adnan Menderes Airport, which is the entrance gate to the Aegean coast, one of the major tourism and culture hubs in Turkey. We are also glad to contribute to the faster growth of the region through the € 250 million investment TAV will undertake in Izmir as a result of this tender.

As a company that earns 54 % of its income from non-aviation businesses, TAV Airports takes special heed of the development of its service companies. ATÜ, which has become an admired market leader in the region in the duty free retailing business line, commenced operation at the Riga airport, an airport that is not operated by TAV; thereby demonstrating the flexibility of the Company’s business model once again. In a similar vein, TAV’s food & beverage firm BTA established a joint venture with TASS which took over the operation of Istanbul Fast Ferries Co (İDO), under the name of BTA İDO, and began catering to 50 million customers of İDO with the BTA quality. In addition, Havaş, Turkey’s largest ground handling company, now also serves airline passengers in Riga, Helsinki and Stockholm under the Havaş Europe brand.

In 2011, a year marked by new investments, TAV Airports continued to operate its existing portfolio of airports most effectively. Istanbul Atatürk Airport, always one of the major focal points of the global aviation industry that also holds the distinction of being TAV Airports Holding’s crown jewel as well as the number one entry point to Turkey, registered an impressive growth rate of 17 % in 2011. Corresponding to an additional 3 million passengers, this increase alone is equivalent to the passenger traffic of a mid-size airport.

Aside from Tunisia, all airports in our portfolio achieved very strong, double-digit growth rates in 2011. The political turmoil in Tunisia disrupted the Company’s growth in this country in 2011. However, as a company that has invested in the next 35 years of Tunisia alongside respected multilateral partners such as IFC and PIADF, we are aware that economic liberalization will increase this country’s tourism potential and enhance the value of our assets; therefore, we are more optimistic than ever about Tunisia’s future.

In a year when global airline passenger traffic grew by 4.9 % according to ACI data, TAV Airports increased its total passenger traffic by 11 % to 53 million. As a result, the Company’s total revenue was up by 12 % to € 881 million and EBITDA increased by 21 % to € 257 million while EBITDA margin ticked up by 2.2 percentage points to reach 29.2 %. The Company increased its cash generation capability at an accelerating pace and generated € 250 million in free

cash flow during this period when it also recorded the strongest financial results in its history. Consequently, TAV Airports managed to reduce its net debt to € 792 million as of December 2011 even after making investments amounting to € 106 million during the year. Increasing our headcount by 8 %, we ended 2011 as a larger and stronger company with 20,269 employees and continued to be among the largest job creators in Turkey in 2011.

2011 went in the books as a major milestone in the Company’s history as the year where TAV’s “Smart Growth” strategy began to bear fruit. TAV Airports Holding’s Board of Directors crowned the Company’s successful financial results in 2011 by resolving to recommend to the General Assembly that a dividend of TL 0.25 per share be paid to the shareholders.

Our commitment to creating value for the society we belong to in every area during the course of our operations reveals itself in every activity we conduct. As one of the most important indicators of this commitment, TAV Airports published its first sustainability report in accordance with the GRI reporting standards in 2011. The Company will continue to conduct its business along the lines of sustainability in the coming years.

What has transformed TAV Airports, whose success in corporate governance and strategic communication is affirmed by independent sources each and every year, into an exemplary and admired company in the region is our ability to keep polar opposites in balance and turn our differences into strength, qualities that are embedded in the DNA of the Company and all of its employees. These skills that helped TAV Airports get to where it is today are also the principal assurance of the achievements that the Company will continue chalk up in the coming years. I would like to take this opportunity to express my sincere gratitude to our employees, the most valuable assets of TAV Airports, to our passengers, and to our esteemed shareholders whose support we always feel on our side.

Dr. M. Sani Şener Member of the Board of Directors and President & CEO

28 TAV Airports 2011 Annual Report Airport Operations

Airport Operations Turkey: Fastest growing aviation market in europe

Center of attention Thanks to its rich history, culture , beautiful nature, developing economy, trade volume and strategic position, Turkey is becoming a powerful center of attraction in Europe as well as in the Middle East.

Second largest population With 75 million people, Turkey has the youngest, the most rapidly growing and the second largest population in Europe.

Source: IMF

Steady growth momentum Turkey is the sixth largest economy in Europe and the 16th largest in the world.

Turkey’s steady growth momentum in recent years and the potential it offers attract investors.

Turkey ranks close to the bottom in Europe in terms of GDP per capita despite its high growth rates, indicating ample room for growth.

GDP per Capita in 2011 (US$ thousand)

Source: IMF, International Monetary Fund, World Economic Outlook Database, September 2011

Hungary 14,808

Turkey 10,576

Czech Republic 20,925

Slovenia 25,939

Poland 13,966

Croatia 14,529

Slovakia 17,888

Latvia 12,226

Greece 27,875

Spain 33,297

Romania 8,665

6,266Serbia

Bosnia and Herzegovina

3,574

4,714

Ukraine

Nominal GDP 48

3 615

943 1

,083

1,01

2

877

730

531

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

(10.0%)

(5.0%)

0.0%

5.0%

10.0%

647 74

2

798

Turkey’s Growth Trend (US$ million)

Real GDP Growth ( %)


Source: Ministry of Culture and Tourism of the Republic of Turkey

The number of tourists visiting Turkey increases with each passing year.

Increasing Tourist Arrivals

countries 2011 change 2010 2009

Germany 4.8 10 % 4.4 4.5

Russia 3.5 12 % 3.1 2.7

United Kingdom 2.6 -3 % 2.7 2.4

Iran 1.9 0 % 1.9 1.4

Bulgaria 1.5 4 % 1.4 1.4

Georgia 1.2 14 % 1.1 1.0

The Netherlands 1.2 4 % 1.1 1.1

France 1.1 23 % 0.9 0.9

Syria 1.0 8 % 0.9 0.5

USA 0.8 18 % 0.6 0.7

Other 12.0 14 % 10.5 10.5

Total 31.5 10% 28.6 27.1

Growth in the Number of Aircraft

The number of aircraft grew at a compound annual growth rate of 14% between 2002 and 2011.

In 2011, the number of companies active in the Turkish civil aviation industry rose to 155 and the total turnover of the sector reached US$ 12 billion. The Turkish aviation industry aims to continue with its accomplishments and raise the number of aircraft to 750 and passenger traffic to 350 million by 2023, when we will be celebrating the 100th anniversary of the Republic.

Total Number of Aircraft in Turkey*

2011 349

2003 162

2007 250

2009 299

2005 240

2010 332

2002 110

2006 259

2008 270

2004 202



Source: Directorate General of Civil Aviation (SHGM)

Turkish Aviation Industry 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Domestic 9 9 14 21 31 32 36 41 51 58

International 25 25 31 36 34 38 44 44 53 59

Total 34 34 45 57 65 70 79 86 103 117

Tourist Arrivals 13 14 18 21 20 23 26 27 29 31

The global civil aviation industry continues to grow with a capacity of approximately 20 thousand commercial aircraft, nearly 5.4 billion passengers, 2,000 commercial airline companies and airports as of 2011. The forecasts call for the commercial aircraft capacity to rise to 40 thousand and the number of passengers to reach 9 billion by 2027.

Source: ICAO

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Istanbul Atatürk Airport One of world’s most preferred airports

In addition to being the largest and busiest airport in the region, Istanbul Atatürk Airport is also europe’s fastest growing and the world’s 29th busiest airport according to 2011 statistics. Also an attractive hub for transit flights, Atatürk Airport receives an increasing number of passengers each day thanks to the large population and high tourism and commerce potential of Istanbul, one of world’s largest metropolitan areas.

• The trigeneration plant that has 10 MW electricity, 10,786 kW hot water and 5,781 kW cold water production capacity resumed operation, resulting in major energy cost savings.

• The “Rota” program that was developed by TAV IT to better manage the aircraft parking space need arising from increased air traffic began to be used by the Turkish State Airports Authority (DHMİ).

• Landings and takeoffs that were previously monitored only via frequency using the data received from flight and ground radars began to be monitored over the internet.

• Atatürk Airport hosted flights of 116 airline companies at the international terminal and eight airlines at the domestic terminal in 2011.

• 34 new airline companies began scheduling flights from the Atatürk Airport including Asiana Airlines, Ata Airlines (Iran), Air Bishkek, Iran Aseman Airlines, Kuwait Airways, Carpat Air, China Southern Airlines, Yakutia Airlines, Hainan Airlines and Tailwind Airlines.

• Istanbul Atatürk Airport was named the “Best Airport Operator of the Year” at the Skalite 2011 Awards, known as the “Tourism Oscars” in the industry.

Major Developments

What is Open Gate? Initiated in 2011 and expected to be completed in 2012, the Open Gate system encompasses moving the security control points at the entrances of the waiting areas of gates to more central locations; redrawing air-land boundaries through these points; and subjecting all passengers, transit passengers, personnel and materials that move to the airside (isolated areas) to a security check in accordance with “pre-boarding control standards.”

In addition, as part of the Open Gate policy: • Passport control and pre-boarding security checks and scans of passengers will be performed at a single checkpoint. • Land-Air boundary will be drawn clearly as requested by ICAO and ECAC. • The liquid limitation policy will be fully implementable since the duty free and food & beverage areas will be inside the Isolated Lounge. • Passenger discomfort due to the existing gate lounges being small and insufficient to accommodate large aircraft will be eliminated. • Flight delays due to security concerns will be prevented. • The airside will be safe and secure at all times since entrance to all waiting lounges will be kept under surveillance.

Airport Operations

TAV at a Glance 33Assessments Operations

Indoor Car Park Area 180,000 m²

Indoor Car Park Capacity 7,076 vehicles

Outdoor Car Park Area 28,300 m²

Outdoor Car Park Capacity 1,034 vehicles

Duty Free Area 6,100 m²

Number of Duty Free Stores 25

Number of Bus Gates Domestic: 9 International: 16

Runways 17R/35L 3,000x45 M 05/23 2,600x60 M 17/35R 3,000X45 M

Number of Destinations International: 236 Domestic: 33

Catering Area 15,744 m²

Number of Check-in Counters International: 224 Domestic: 96

Passport Counters Departures Floor: 48 Arrivals Floor: 42

Number of Bridges International: 26 Domestic: 12

Flight Traffic by Airline ( %)

Other 27

Turkish Airlines 68.4

Turkish Airlines 75.4

International

domestic

Atlas Jet 2.3

Onur Air 14

Atlas Jet 7.7

Other 2.8

Lufthansa 2.3

Key Indicators

37.5

32.1

29.8

23.9

20.3

18.4

11.8

11.4


2011

Domestic

Domestic

International

International

2010

2009

13.6

306

274

266

200

179

170

95

96

Commercial Flights (thousand)

2011

2010

2009

106

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Ankara Esenboğa Airport Service quality worthy of Turkey’s capital

reflecting Turkey’s modern face as the region’s newest airport and shortening the distances covered by its passengers thanks to its unprecedented design that combines the international and domestic terminals under a single roof, Ankara Esenboğa Airport offers a pleasant customer experience both before and after the flight.

Major Developments • Catering areas and shopping centers were expanded to best meet customer

needs within the terminal.

• The lounge located in the International Terminal began to be operated by “primeclass.”

• Ankara Esenboğa Airport hosted scheduled and charter flights of 24 airline companies in 2011.

• International Terminal hosted flights to 29 destinations in 18 countries while the Domestic Terminal served flights to 38 destinations.

• NAS Air launched flights from Ankara Esenboğa Airport in 2011.

• Beginning to generate its own electricity with a cogeneration plant in 2008, TAV Esenboğa met 70% of its energy consumption needs from this energy production facility in 2011.

Key Indicators


Other 33

Turkish Airlines 41

Turkish Airlines 77

International

domestic

Lufthansa 12

Pegasus 12

Pegasus 14

Other 11


8.5

7.8

6.1

1.4

1.3

1.1

6.4

5.0

2011

2010

2009

7.1

Domestic Domestic International International


72

63

51

12

12

10

51

41

2011

2010

2009

60

Airport Operations

Expiration of Operation May 2023

Car Park Area 108,000 m²

Car Park Capacity 4,053 vehicles




Number of Check-in Counters International: 78 Domestic: 80


Number of Bridges 18

Number of Bus Gates 10

Runways 2 2RWY 03/21 runways 3,750x45, 3,750x60 m

Begü

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/ Ank

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Airp

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TAV

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Men

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Izmir Adnan menderes Airport The airport growing with Izmir’s potential

Turkey’s third largest city, Izmir also boasts the second most important commercial port in the country. Serving 49 airline companies in 2011, the Izmir Adnan menderes Airport International Terminal hosted flights to 87 destinations during the year. TAV Airports was awarded the tender that was held in 2011 for the operation rights of the domestic and international terminals until year-end 2032.

Major Developments

• The Domestic Terminal commenced operation under the management of TAV Airports on January 2, 2012.

• The CIP and General Aviation segmentation project was completed and commenced service as of the end of the year for the use of CIP and other privileged passengers.

• Number of passengers, flying particularly to Germany, France, Ireland, Poland and Austria, registered increases in 2011.

• TAV Izmir hosted flights of 49 airline companies in 2011.

• The number of international destinations reached 87.

• Eight new airlines including Easy Jet, Aer Lingus and Azerbaijan Airlines launched seasonal scheduled flights.

• TAV Izmir renewed its verification for the Level 1 of the Carbon Accreditation Program.

• 11% reduction in electricity consumption and 1% reduction in water consumption were achieved as part of the sustainability initiatives in 2011.

Airport Operations


Expiration of Operation December 2032




Number of Bridges 9


Runways 34R - 16L 3,240x45 m 34L - 16R 3,240x45 m



Number of Check-in Counters 66


Key Indicators


Onur Air 7

International

Other 36Pegasus 15

Lufthansa 8Sun Ekspres 31 Atlas Jet 4

2.1

1.7

International Passengers (million)

2011

2010

2009

2.5

16

13

International Commercial Flights (thousand)

2011

2010

2009

17

42 TAV Airports 2011 Annual ReportAr

zu G

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, TAV

Ista

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/ An

taly

a G

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Airp

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Antalya Gazipaşa Airport New gateway to the eastern mediterranean

Serving as an international boutique airport in Antalya, one of the major destinations of Turkish tourism, Gazipaşa Airport stands out as the most convenient access point to Alanya. Gazipaşa Airport served three airlines and hosted 106 domestic and 90 international flights in 2011.

Airport Operations




Car Park Capacity 150 vehicles

Duty Free Area 94 m²

Passport Counters Departures Terminal: 2 Arrivals Terminal: 3 Departures Gate: 1 Arrivals Gate: 1

Runway PCN 77/R/X/T 2,000x45 m


Catering Area 57 m²


Key Indicators

13,9129,924

4,648

Passengers

2011

2010

3,988

19690

212

Commercial Flights

2011

2010

106

Major Developments

• After beginning to host scheduled domestic flights in July 2010, Antalya Gazipaşa Airport started hosting scheduled international charter flights in 2011.

• Runway extension and expansion investments were made.

• Transavia Airlines conducted Gazipaşa Airport’s first international flight in 2011.

Domestic

Domestic

International

International

• 30% conservation in electricity consumption was achieved in 2011 by reducing the airport and immediate vicinity lighting levels by one-third as part of the sustainability initiatives.

44 Airport OperationsTAV Airports 2011 Annual Report

Georgia Gateway of commerce to the caucasus

Demographic Composition

Ages 15 to 64 years Ages 65 years and older

18.7 % 65.8 % 15.5 %

Ages 0 to 14 years

Strategic position The completed oil pipelines in the region such as the Baku-Tbilisi-Ceyhan pipeline support the strategic position of Georgia, which is located at the crossroads of Europe and Asia.

Trade routes Located on the eastern end of the Black Sea, Georgia controls the trade route that passes through the Caucasus Mountains.

Growth potential With a population of 4.3 million, Georgia was among the fastest growing economies in the region until the tensions with Russia over Abkhazia and South Ossetia.

Georgia’s Growth Trend (US$ billion)

Nominal GDP Real GDP Growth ( %)

200.0 200

0 0

400.0 400

600.0 600

800.0 800

1,000.0 1,000

1,200.0 1,200

1,400.0 1,400

1,600.0 1,600

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Travel and Tourism Indicators

Foreign Tourist Arrivals (thousand) Tourism Revenues (US$ billion)

( 5.0 %)

0.0 %

5.0 %

10.0 %

15.0 %

12.9

10.8

11.7 12

.9

13.3

13.7

14.2

14.9

10.2

20.0

15.0

10.0

5.0

0.0

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: IMF

Source: World Economic Forum


Tbilisi International Airport modern flight base linking Georgia to the world

Tbilisi International Airport is the first international project of TAV Airports Holding. The airport serves nearly all air traffic of Tbilisi and Georgia which offer new business and trade opportunities. Tbilisi Airport registered 29% growth in passenger traffic and 19% increase in commercial flight traffic in 2011.

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Turkish Airlines 7 Pegasus 4

International

Other 49Aerovit 9

Azerbaijan Airlines 6 Georgian A/W 19 Lufthansa 5

Major Developments

• Tbilisi Airport hosted flights of 24 airline companies in 2011.

• Six new airlines launched flights in 2011: Ata Airline, Air Astana, China Southern, Ural Airlines, Fly Dubai and Air Cairo.

• Tbilisi Airport hosted flights to 26 international and two domestic destinations, serving a total of 28 destinations.

• TAV Georgia won the “Golden Brand Award Best Brand” in the “Public Transport and Service” category at the Golden Brand 2010 organized

by Global Idea, a leading market research firm in Georgia, and The Financial, a news portal.

• Tbilisi Airport was honored by the EMAA with the Best Emerging Airport Award in the region of the Commonwealth of Independent States and Russia.

Key Indicators

822

703

Passengers (thousand)

2011

2010

2009

1,058

16.5

13.8


2011

2010

2009

19.6

Expiration of Operation February 2027

Car Park Area 750 m²



Number of Bridges 3


CIP Area488 m²

Runway 13R / 31L 3,000x45 m





Airport Operations


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Batumi International Airport Symbol of exemplary international cooperation

As an airport used jointly by Georgia and Turkey, the Batumi Airport has become the symbol of a major regional cooperation. This crucial cooperation plays a significant role in the development of the region and reinforces strong ties between the two countries.

Expiration of Operation August 2027





Runway 13 / 31 3,000x45 m




Key Indicators

88.6

69.3


2011

2010

2009

133.9

2.3

1.8


2011

2010

2009

3.5


Turkish Airlines 17

International

Other 35Georgian A/W 41 Belavia 7

Major Developments

• Under the partnership of Anadolujet and Borajet, Ankara-Batumi flights as well as Batumi-Moscow direct flights commenced.

• The number of international flights soared by 54% while passenger traffic was up by 51%.

• 90% of the commercial areas inside the terminal were leased and new advertising areas were created.

• The Batumi Airport hosted scheduled flights of five airline companies in 2011: Turkish Airlines,

Georgian Airlines, Belavia, Anadolu Jet and Kenn Borek.

• The Batumi Airport hosted flights to two domestic and 12 international destinations, serving a total of 14 destinations.

Airport Operations


Tunisia On its way to becoming Africa’s flight hub…

Tourism-oriented growth Tunisia, one of the important countries of the Mediterranean, stands out with its sea trade routes and unparalleled tourism potential. Ninety percent of the visitors of Tunisia, a country whose popularity is rising by the day, prefer air transit to get there.

Passenger traffic, which declined because of the “Arab Spring” that began in December 2010, is expected to rise again as stability is restored in Tunisia.

Effective privatization policies Tunisia, a country of 10 million, enjoyed strong economic growth momentum over the last decade thanks to the privatization policies pursued by its government. Hosting approximately 10 million passengers annually, Tunisia is on its way to becoming a major tourism hub.

Advanced infrastructure Standing out with its advanced air and rail transport infrastructure in particular, Tunisia ranks 37th in the international infrastructure development survey conducted by the “World Economic Forum Competitiveness.”

-

2.0 %

4.0 %

6.0 %

8.0 %

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tunisia’s Growth Trend (US$ billion)

Tunisia North Africa Africa

-

2,0002,000

1,000

4,0003,000

6,000

4,000

5,000

8,0006,000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011


Tourist Arrivals (thousand) Tourism Revenues (US$ million)

Source: IMF, African Economic Outlook.org

Source: World Economic Forum Report


Ages 15 to 64 Ages 65 years and older

26.0 % 67.5 % 6.5 %

Ages 0 to 14 years


monastir International Airport Where the world meets Tunisia

located in Tunisia, one of the leading tourism destinations in North Africa, and positioned merely two hours away from many european capitals, the monastir Airport has been operated by TAV since January 2008. except for air traffic control, all operations at the monastir Airport are administered by TAV Tunisie SA, a 67%-owned subsidiary of TAV Airports Holding.

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Runway PCN: 45 2,950x45 m; asphalt




Key Indicators

3.9

3.8

Passengers (Monastir + Enfidha) (million)*

2011

2010

2009

* More than 90 % of the passengers are international flight passengers.

2.3

31.8

30.4

Commercial Flights (Monastir + Enfidha) (thousand)

2011

2010

2009

20.8


enfidha Hammamet International Airport One of the fastest growing airports in North Africa

The enfidha Hammamet International Airport, which has the potential to become one of the major air travel hubs in North Africa, is the second airport in Tunisia operated by TAV Tunisie SA after the monastir International Airport, which is located 65 kilometers from the enfidha Hammamet Airport.

Constructed by TAV with a € 500 million investment and having commenced operations at the end of 2009, the Enfidha Hammamet Airport plays a key role in Tunisian tourism because of its proximity to key tourist attractions.

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Enfid

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Conducting intensive marketing efforts in an attempt to increase the air traffic of the Enfidha Hammamet Airport, TAV Tunisie SA reached agreements with numerous major airline companies and tourism agencies in the region. Agreements were made with nearly 30 airline companies.

Airport Operations


Major Developments • ICT Summit Eurasia - Bilişim

Zirvesi ’11, a platform to encourage cooperation within the Eurasia region, presented awards to the communication technology projects

undertaken between the countries of the region. Leaving many established information technology companies behind with its Enfidha - Hammamet Airport information technology

infrastructure project, TAV IT received the first place prize at the award ceremony.


Car Park Area and Capacity 130,000



Number of Bridges 18


Runway PCN: 104 3,330x60 m; asphalt





Thomas Cook UK 5

International

Other 33Nouvelair Tunisia 22

Transavia France 6Tunis Air 32 Air Berlin GMBH 2

54 Airport OperationsTAV Airports 2011 Annual Report

macedonia crossroads of commerce in the Balkans

Soaring passenger and air traffic Located at the heart of the Balkans and attracting many tourists thanks to its history as well as cultural structure diversity, Macedonia is also a major crossroads of commerce in the Balkan region due to its location. After the visa exception that took effect in 2009, passenger traffic between Macedonia and the 500-million strong European Union took off. Macedonia completed the negotiations to join the European common airspace and its air traffic is expected to rise rapidly after being admitted to the common airspace.

Growth expectation* Macedonia, a country of 2.1 million people, is expected to record an annual average GDP growth rate of 7.4% between 2010 and 2015. The constantly growing tourist arrivals also support the country’s tourism potential.

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5050

100100

150150

200200

250250

300300

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011


Tourist Arrivals (thousand)

Macedonia’s Growth Trend (US$ billion)

Nominal GDP

(2.0 %)

0.0 %

2.0 %

4.0 %

6.0 %

8.0 %

8.7 9.

7

9.1 10

.1

10.8

11.4 12

.2

13.0

2007

2008

2009

2010

2011

2012

2013

2014

2015

9.2

Real GDP Growth ( %)

Tourism Revenues (US$ million)


Ages 15 to 64 years Ages 65 years and older

21.5 % 67.8 % 10.7 %

Ages 0 to 14 years

* Source: IMF


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Skopje Airport TAV’s pride in the Balkans

making its first move into europe, TAV Airports assumed the operation of the Alexander the Great Airport in macedonia’s capital Skopje as of march 2010. In 2011 passenger traffic was up by 12% while flights of 18 airlines to 16 international destinations were served.

Major Developments

• The Skopje Airport began to be used exclusively as a civilian airport in 2011.

• As part of the approximately € 100 million investment, the new passenger terminal, car park and the cargo hangar were renovated and the runway was extended.

• A BMS (Building Management System) was installed at the new

terminal building that commenced operations, achieving energy efficiency and savings.

• TAV Macedonia became a sponsor of the Macedonia Men’s Basketball team.

• TAV Macedonia received the best project award in the Public Investment category at the International Real Estate and Investment Fair.

• Passenger traffic at the Skopje Airport was up by 11% in 2011.

• In 2011 the number of airline companies served rose to 18 after Wizz Air, the largest low-cost carrier in Eastern Europe, as well as Pegasus, Air Berlin and Belle Air Europe launched flights at the Skopje Airport.

• The Skopje Airport hosted flights to 16 destinations.

Airport Operations


Expiration of Operation March 2030




Catering Area1,000 m²



Key Indicators

685

603


2011

2010

2009

764

11.1

12.1


2011

2010

2009

10.9

Number of Bridges 6


Runway Code E / ILS CAT I 2,980 m


Ohrid Airport macedonia’s tourism paradise

declared a world heritage site by uNeScO and famous for its history and natural beauty as well as the lake it is named after, Ohrid is among macedonia’s major tourism destinations. The Ohrid Airport served 25 different airlines and hosted flights to 24 destinations.

Fuly

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, TAV

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Airport Operations


Major Developments

• As part of the investments undertaken, the VIP building, aircraft hangar and new car park was built and the terminal building was renovated.

• Corendon, Finn Air and Arke Fly were airlines that launched flights in 2011.

• The Ohrid Airport recorded the highest passenger growth rate in the world with an increase of 169% in January 2011 and 189% in September 2011.

Expiration of Operation March 2030









Runway Code E / ILS CAT I 2,250 m

Key Indicators

45

37


2011

2010

2009

74

627

676

Commercial Flights

2011

2010

2009

904


latvia The rapidly growing country of Northern europe

located in Northern europe on the shores of the Baltic Sea, latvia stands out with its capital riga. Forestry and forestry products, the machinery industry and textiles are the major sources of income and economic activity in latvia, a country of 2.2 million people. The latvian economy regained stability after the 2008 crisis and grew by 5.5% in 2011.

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, TAV

Sec

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y / R

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Airp

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Airport Operations


riga Airport rapid transformation that began with TAV

The operation right of the 4,650 square-meter commercial space encompassing the duty free, food & beverage services and other commercial areas of the riga International Airport, the second service link of TAV Airports in europe after macedonia, was awarded to TAV latvia for a period of 10 years on January 1, 2011. riga Airport’s passenger traffic in 2011 was 5.1 million, up by 9.5% compared to 2010.

Expiration of Operation December 2021

Major Developments • TAV Latvia assumed the operation

of the commercial spaces of the Riga Airport totaling 2,295 square meters.

• The duty free shops taken over by ATÜ commenced service after being renovated.

• The investments made increased the brand recognition of TAV in Latvia.

• The Riga Airport’s passenger traffic in 2011 was 5.1 million.

• TAV Latvia received the “Best Partner” award from the Riga Airport management thanks to its excellent performance.

Total Commercial Area* 2,295 m²

* Area in operation as of year-end 2011


3.72008

3.22007

2.52006

1.92005

1.12004

0.72003

2009 4.1

2010 4.7

2011 5.1

28% compound annual growth rate of passenger traffic between 2003

and 2011

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64 TAV Airports 2011 Annual ReportSe

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/ H

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Service companies


Ground Handling Services: Havaşcomplete ground handling services executed with precision

In 2011, Havaş handled 116,120 flights, both scheduled and charter, of 200 airlines in a total of 22 airports. Havaş continued to expand its client base by adding two more airlines, Air Transat and Hainan, to its portfolio in 2011. The consolidated revenues of Havaş reached € 197 million in 2011, up by 21% on the previous year.

Major Developments

• More than 200 airlines were served at 22 airports under the Havaş brand, six airports under the TGS brand, one under the CAS brand and three under the Havaş Europe brand.

• The Company commenced service at the Sinop and Amasya - Merzifon airports in Turkey.

• 15 new airline companies, including Air Transat (Canada) and Hainan Airlines (China) that have charter flights from the Istanbul Atatürk Airport, joined the client portfolio of Havaş.

• NHS, which served 30,591 flights in 2011, was renamed “Havaş Europe” as part of its strategy to grow with the Havaş brand.

• Havaş Europe served 20 airline companies with an average of 415 employees.

• The apron traffic at the Istanbul Atatürk and Antalya airports began to be controlled and directed using the aircraft monitoring system developed by Proveo.

• The verification project in accordance with the ISO 14064-1 greenhouse gas standard continued at Havaş stations.

• Warehouse cargo volume increased by 43% to 21,798 tons.

• The Company’s Esenboğa Airport station was recognized by Qatar Airways with the Best Performance for 100% OTP Award.

• Havaş was awarded a Certificate of Appreciation by the Ministry of Labor and Social Security, General Directorate of Public Employment of Turkey.

• All charter stations were awarded a Certificate of Appreciation by SAS Scandinavian Airlines.

• The Company received the Turkish State Airports Authority (DHMİ)’s Certificate of Appreciation as part of the Libya humanitarian aid operation.

• The Antalya Airport station of Havaş received Pegasus Airlines’ AGCS Audit Certificate of Achievement.

• The Company’s Antalya Airport station was recognized with the 2011 winter season Letter of Achievement of the Aeroflot - Russian Airlines.


Products and Services Passenger Services Ramp Services Cargo and Mail Services Load Control, Communications and

Flight Operation Services Representation and Management Services Transportation Services Warehouse Services

Subsidiaries Turkish Ground Services (TGS) Havaş Europe Cyprus Airport Services (CAS) TAV Gözen

Key Financial Results

163.5

125.9

Total Revenues (€ million)

2011

2010

2009

197.4

25.5

24.2

EBITDA (€ million)

2011

2010

2009

34.3

269

183

Number of Aircraft Served (thousand)*

2011

2010

2009

308

* Excluding CAS

Service companies


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68 TAV Airports 2011 Annual ReportSe

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Ü


duty Free: ATÜThe world’s best brands in unrivalled duty free shops

Founded as a joint venture of TAV Airports Holding and unifree duty Free A.Ş., ATÜ is the unrivalled operator of Turkey’s duty free shops, offering more than 50 thousand products of the world’s best-known brands with attractive prices in 64 stores covering an area of 14,460 square meters.

Major Developments

• Duty free operations commenced at the Riga Airport in 2011.

• Four new stores covering a total sales area of 420 square meters commenced service at the new terminal in Macedonia.

• The number of passengers served and the sales revenues recorded major increases due in part to the “open gate” policy that was launched at the Ankara Esenboğa Airport.

• ATÜ Retail Institute was established in order to increase customer satisfaction and employee productivity.

• Customer complaints were reduced to an extremely low ratio of 0.05%.

• The accessory category product portfolio was expanded. Agreements were made with new brands such as Apple.

Key Financial Results

340.0

290.3

Total Revenues (€ million)

2011

2010

2009

415.4

30.8

27.7

EBITDA (€ million)

2011

2010

2009

42.4

9.0

9.5

EBITDA Margin ( %)

2011

2010

2009

10.2

Products and Services Arrival duty free Product portfolio enhanced with local culture Increasing concept diversity

Arzu

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tanb

ul /

BTA


Food & Beverage Services: BTAUnique world flavors that enhance the airport experience

BTA offers passengers a diverse selection of foods ranging from traditional Turkish cuisine to major international cuisines at world class standards with a service approach based on comfort and quality.

Major Developments

• Istanbul Airport’s domestic and international terminal food court areas were renovated and the restaurant selection was enriched with the addition of world-renowned chain brands.

• By offering a variety of price alternatives to passengers, the number of guests served by BTA in its Turkish airport operations increased by 15%.

• BTA established a partnership with TASS to manage the food & beverage operations of İDO (Istanbul Fast Ferries Co.) and founded BTA Denizyolları ve Limanları Yiyecek ve İçecek Hizmetleri Turizm Sanayi ve Ticaret A.Ş. (BTA Sea Lines).

• BTA Sea Lines commenced service at 38 food & beverage sales points o

Documents

Fulya Pekcan - TAV › uploads › documents › ...2 TAV Airports 211 Annual Report Shareholding Structure Strong, institutional shareholder base Shareholder Number of Shares (1)