Developing revenue streams at Oradea Airport, Romania

What is your role with Oradea Airport?

As a fund specialist at Oradea Airport in Romania, my role encompasses identifying and securing both operational and investment funding for the airport. This involves a multi-faceted approach that includes sourcing potential funding opportunities, preparing the necessary documentation for funding applications and managing the submission of these applications.

Furthermore, I am a part of a team which is responsible for the comprehensive management of projects once funding is approved. This includes overseeing the project from initiation to completion, ensuring compliance with funding requirements and coordinating with various stakeholders to achieve project goals. My expertise lies in navigating the complexities of financial regulations and requirements to secure the necessary resources for the continued development and efficient operation of Oradea Airport.

What financial impact did the pandemic have on the airport and have you started turning a profit again?

The COVID-19 pandemic has had a significant financial impact on Oradea Airport, similar to the effects felt across the entire aviation industry. We experienced a decline in revenue, which forced us to reassess and adjust our budgets to maintain essential operations.

From a staffing perspective, we were compelled to place some employees on furlough due to imposed restrictions, which posed a major challenge for our team. Despite these difficulties, we managed to maintain a dedicated team to ensure the continuity of our services.

In terms of passenger traffic, the situation was fluctuating. During the early part of the pandemic, we primarily operated domestic flights, which were not completely restricted. With the commencement of Ryanair operations in July 2021, things slowly began to return to normal. However, new restrictions imposed across Europe continued to affect us, resulting in a lower number of passengers able to travel to and from Oradea.

Although the pandemic was an unprecedented phenomenon that deeply affected us, we are slowly beginning to recover. We are making concerted efforts to increase passenger numbers by diversifying routes and improving our services. Oradea Airport is now operating at normal capacity, and we are prepared to meet the needs of our passengers and support regional development. We are confident that we will be able to report increasingly positive financial results.

What financial impact has the Russia/Ukraine war had on your airport?

The Russia/Ukraine war has had a nuanced financial impact on Oradea Airport. On one hand, we have seen an increase in the number of passengers using our airport, possibly due to shifts in travel patterns within the region. However, on the other hand, there is a slight sense of unease among potential tourists given our relative proximity to the conflict zone.

We are continuously working to ensure a safe and welcoming environment for all our passengers and to maintain the confidence of travellers considering Oradea as their destination. Despite the challenges posed by the broader geopolitical situation, we remain committed to supporting regional connectivity and growth.

Oradea Airport has recently expanded its passenger terminal with an investment of 234.7 million lei. How was this funded?

Between January 2022 and December 2023, Oradea Airport implemented infrastructure investment projects totalling nearly €100 million. These projects included significant investments in safety and security (€14 million), runway extension (€30 million), and the most ambitious project, the expansion of the passenger terminal, valued at €50 million.

The funding for these projects was secured through accessing funds in accordance with the State Aid Scheme for investments in airport infrastructure, part of the large infrastructure operational programme ((POIM 2014-2020), Priority Axis 2 – Development of a high-quality, sustainable, and efficient multimodal transport system, Specific Objective 2.3), increasing the sustainable use of airports.

This remarkable achievement represents an exceptionally important step forward for Oradea Airport and the entire region. The expansion of the passenger terminal is a project of considerable scope and significance, reflecting our commitment to providing high-quality services and meeting the growing demands of our passengers. Through these investments, we have significantly modernised our infrastructure, thereby strengthening Oradea Airport’s position as an efficient and sustainable regional air transport hub.

We are proud of these accomplishments and the positive impact they will have on regional development and the experience of our travellers.

What features does the expanded terminal have in the commercial space?

The expanded terminal at Oradea Airport has been designed with a range of new facilities in the commercial space to enhance the passenger experience, which will become operational soon. The terminal was received from the contractor at the end of May, and we are currently in the process of organising and finalising these spaces.

There will be several shops offering passengers a wide range of products, from travel essentials to luxury items. Dining options will include new cafes, restaurants and bars, where delicious local dishes will be served, catering to diverse culinary tastes and dietary needs.

The duty-free shopping area is expanded, set to offer a variety of tax-free products, including local items such as cosmetics, perfumes, electronics and regional specialties.

We will also be setting up comfortable lounge areas where passengers can relax before their flights, with some lounges offering premium services such as complimentary drinks, Wi-Fi and quiet workspaces.

Regarding family facilities, the children’s play areas are already operational and welcoming young travellers.

Facilities such as currency exchange, ATMs, luggage storage and customer service desks are planned to assist passengers with their travel needs.

Additionally, the terminal features enhanced facilities for passengers with reduced mobility, including accessible restrooms, elevators and dedicated assistance services.

In the parking area, we have installed charging stations for electric vehicles to support sustainable travel options.

These improvements are part of our ongoing efforts to provide a more convenient, enjoyable and efficient travel experience for all passengers passing through Oradea Airport.

What is your current aeronautical to non-aeronautical split and how are you looking to diversify this?

Currently, at Oradea Airport, aeronautical revenues constitute approximately 34% of our total income, while non-aeronautical revenues represent 66%.

To diversify and increase both aeronautical and non-aeronautical revenues, we are focusing on several strategic initiatives.

For aeronautical revenue, we aim to attract more airlines and increase flight frequencies, thereby boosting passenger numbers. We are enhancing our route network with new flights, such as the recently launched LOT flight to Warsaw, which started operations in June this year. Additionally, we are excited to introduce new routes with HiSky to Bucharest and London, starting from October this year, and new flights with Anima Wings to Romania’s capital. The integration of in-house handling services has also contributed to streamlining our operations and increasing our revenue potential.

Regarding non-aeronautical revenue, as mentioned earlier, we are expanding and diversifying the commercial offerings in our recently expanded terminal. This includes a variety of commercial spaces such as duty-free area, as well as new cafes, restaurants and bars specialising in delicious local dishes.

These initiatives are crucial for balancing our revenue streams and transforming Oradea Airport into a modern and efficient regional hub, providing a complete and satisfying experience for all our passengers.

What’s the story been with cargo so far? And how are you looking to progress it in the future?

Cargo transport at Oradea Airport entered a new phase with the completion of the CTPark Oradea cargo terminal in 2023, the first industrial project of its kind in Romania. This modern cargo terminal, developed on land leased to CTPark following a rigorous selection process, can simultaneously handle four Category C aircraft and offers advanced facilities for the handling and storage of goods, significantly enhancing transport operations. The partnership with CTP, a dedicated investor, was crucial in realising this essential infrastructure.

Oradea Airport benefits from a strategic position in Central Europe, making it an ideal transit point for cargo transport. This favourable location allows us to efficiently serve both domestic and international markets, facilitating quick and efficient connections between different regions.

Looking ahead, we aim to increase the volume of cargo transported by attracting new cargo transport operators and developing an intermodal centre that will facilitate efficient goods transport by air, road and rail. This development will include the creation of integrated logistics links that enable the rapid and efficient transfer of goods between different modes of transport.

Our plans also include expanding storage and handling infrastructure and improving services offered to transport operators and logistics companies. These initiatives will strengthen Oradea Airport’s position as a regional logistics hub of reference, capable of meeting the growing demand for cargo transport and stimulating local and regional economic development.

In conclusion, through these measures, Oradea Airport aims to become a strategic point in the cargo transport network of Romania and Eastern Europe, offering superior quality services and modern facilities for all logistics operations.

How are you working to reduce your OPEX costs?

A major investment has been in renewable energy, with the installation of solar panels that generate green energy to support our own consumption, significantly reducing our electricity costs. We are actively pursuing additional funding programmes to further invest in sustainable infrastructure, enhancing our energy efficiency and environmental footprint.

We also leverage geothermal water for heating, which not only reduces our heating expenses but also aligns with our commitment to environmental sustainability. Our modernisation efforts have included extensive digitalisation of operations, addressing the prevalent issue of labour shortages by automating various processes and enhancing overall efficiency.

Furthermore, we are committed to aligning with the European Union’s “Fit for 55” initiative, which aims to reduce greenhouse gas emissions by 55% by 2030. Our initiatives, such as the implementation of solar panels, geothermal heating, and digitalisation of operations, are significant steps towards achieving these ambitious emission reduction targets.

Through these measures, Oradea Airport is creating a more sustainable and cost-effective operational environment, ensuring we remain competitive while making a positive contribution to the environment.

What’s the story with your CAPEX and how this will progress in the future?

At Oradea Airport, our CAPEX strategy has been dedicated to significant infrastructure improvements and strategic expansions, with a total investment of nearly €100 million. These projects, primarily funded through European financing, have focused on enhancing safety and security, extending the runway and modernising the terminal.

The expansion and modernisation of the passenger terminal have significantly increased our capacity and service offerings. We have also installed solar panels that generate green energy, thereby reducing our electricity costs and underscoring our commitment to sustainability. Additionally, the development of the CTPark Oradea cargo terminal has greatly enhanced our cargo handling capabilities.

Looking ahead, our future CAPEX will continue to prioritise sustainable development and operational efficiency. We plan to further invest in renewable energy sources, including additional solar panels and potentially wind energy solutions, to further decrease our carbon footprint and operating costs. We are actively pursuing grants and funding opportunities to support these green initiatives.

We are also focused on enhancing our infrastructure to support increased cargo operations. This includes developing intermodal transport facilities to ensure seamless connections between air, road and rail transport, thereby strengthening our position as a regional logistics hub.

In summary, our future CAPEX will be directed towards sustainable infrastructure, advanced technology integration and expanding our operational capacities, ensuring that Oradea Airport remains a modern, efficient and environmentally responsible hub.

About the interviewee

Nida Cherim is a Financing Specialist at Oradea International Airport, finding financial sources for developmental and operational costs of the airport. While her role includes issuing clarifications and notifications of financing applications, Nida is also responsible for liaising with partners and financiers.