In the wake of Ukraine’s hosting the Euro 2012 tournament, a new team is driving an ambitious traffic expansion at Donetsk Airport, the host of this year’s Routes CIS forum. Kirill Osypov, the youthful CEO of Donetsk Airport, is one of the few Ukrainians whose attention was definitely elsewhere during the Euro 2012 football tournament.
“Just two weeks before the beginning of the Euros, I became the general manager of the airport,” Osypov he says. Yet within the space of that fortnight, he had already hired 200 staff to meet the influx of football fans, demonstrating a dynamism that continues to transform the airport’s network as well as its culture. And this summer, as Osypov reaches the first anniversary of his appointment, he can point to some successes to justify his reforms.
“Last year, for the first time since Soviet times, the airport crossed the one million threshold in traffic. Passenger flow in Ukraine grew 13.5 per cent, while it increased at Donetsk by 21 per cent. This year we are also aiming to increase the passenger flow again, if the market will respond, by about 15 per cent –17 per cent,” he enthuses.
Preparations for the Euro tournament endowed Donetsk with a new 4km runway, large enough to have already hosted the colossal Antonov An-225 Mriya, along with a new seven-storey 58,000sqm terminal able to cater for up to five million passengers a year. An exhibition centre is also planned at the airport, which is located just 10km from the city centre. But revamped facilities are just one side of the story, for Osypov has also introduced a new culture to the management team, which is more open, more cosmopolitan and literally speaks the airlines’ language.
“We have started the process of changing the airport’s structure, and it’s running well,” he says. “All the people I have hired speak English fluently, as it is the aviation language, and I have tried to make a European and absolutely transparent and profitable organisation.”
Osypov’s own background includes 13 years studying in the UK, where he took a master’s degree, before he returned to his native Ukraine to work as a project manager/consultant at Scott Wilson, a strategic international management consulting company. He then headed public relations, marketing and infrastructure for the national agency that prepared for Euro 2012 and implemented infrastructure projects. At the beginning of May 2012, while working as director of an international consulting company, he was recruited to run Donetsk airport.
In the opening phase of building capacity and connectivity, Donetsk is targeting low-cost carriers (LCCs), explains airport CCO Oleksiy Dubrevskyy. “Low-cost carriers can build the market and compete with other means of transportation such as railways, cars or minibuses.” It’s already attracted four – Air Arabia, flydubai, Pegasus and Wizz Air Ukraine – which are meeting the leisure and business demand afforded by Donetsk’s growing middle class and its strong manufacturing base. “It’s an industrial area, with a very strong corporate sector and lots of companies in sectors such as metallurgy, chemicals, machinery – that’s why we are quite a sustainable market,” says Dubrevskyy.
In fact, as the leading city in the Donets Basin, Donetsk is at the heart of Ukraine’s most densely populated region outside Kiev. Last year, Forbes ranked Donetsk as the best city in Ukraine for doing business. Donetsk itself has a population of about one million, but it also forms part of a wider region, which includes the nearby industrial city of Makiivka with almost 400,000 citizens.
In addition, Donetsk’s catchment includes a sizeable Russian segment coming from nearby Rostov-on-Don, and now “about 15 per cent of our customers are Russian”, explains Dubrevskyy. He calculates its catchment area covers 6.5 million inhabitants, from a region that generates a fifth of Ukraine’s GDP.
Routes from Donetsk are mainly propelled by outbound demand, which is largely for travel to Europe for business and to the warmer climates of the Middle East and South Asia for holidays, says Osypov. In leisure travel, the latest development is a Chinese destination poised to start soon as a weekly charter from July, while Dubai is already a popular destination, from which many holidaymakers transit to Thailand and Sri Lanka.
A surge in charter flights reflects the potential of further developing vacation travel, adds Dubrevskyy. “In our summer charter programme last year the airport had about 220 charter flights. This year it will be about 480 or 500 flights,” he says.
Donetsk’s route map was hit hard by the collapse of its home carrier Donbassaero in January 2013, but the airport is now filling out with charter and scheduled flights from 12 carriers. Wizz Air Ukraine is a recent arrival, with flights to Dortmund and Kutaisi, while Air Arabia, flydubai and Pegasus serve Sharjah, Dubai and Istanbul’s Sabiha Gökçen. Meanwhile, Aeroflot, Transaero and UTair provide links to Moscow’s Sheremetyevo, Domodedovo and Vnukovo airports, respectively. UTair also serves Kiev Zhulyany, Larnaca, St Petersburg and Surgut.
Elsewhere, Lufhansa flies to Munich and Turkish Airlines connects Donetsk with Istanbul Atatürk, while the country’s largest carrier following the collapse of AeroSvit earlier this year, Ukraine International Airlines, flies to Kiev and operates seasonal routes to Baku, Tel Aviv and Yerevan, along with charter flights to Antalya, Barcelona, Burgas, Dubrovnik, Heraklion and Tunis. On a purely charter basis Wind Rose flies from Donetsk to Antalya, Burgas, Dalaman, Heraklion, Kiev, Sharm El Sheikh and Tivat, while Astra Airlines operates to Thessaloniki.
For inbound traffic, the draw of Donetsk’s industrial activity is bolstered by its experience of event hosting, says Dubrevskyy. “We have good experience in MICE [meetings, incentives, conferences and events] – in addition to the 2012 Euros, we have hosted Champions League matches as well as a recent World Ice Hockey Championship. In July, the World Field and Track championship will be held here.”
Reflecting the city’s origins as a centre for the iron industry, its several parks feature a host of iron sculptures, including a 19th century palm tree that became a symbol for the city. Along with some scars from heavy industry, Donetsk’s surrounding area includes the Khomutovskaya steppe as well as the picturesque Sviatohirsk Cave Monastery.
In 2012, some 240,000 travellers stayed in hotels in the Donetsk region, a rise of more than 24.4 per cent on the previous year. About 50,000 of these travellers came from abroad, mainly from Russia and Germany. While football was the main draw, a series of other events spurred business travel to the city. The Expo-Donbass centre hosts about 20 exhibitions a year, drawing delegates last year from sectors including energy, ecology, furniture and education.
While Donetsk sees its potential as unique within Ukraine, the gateway benefits from a nationwide goal of expanding the aviation sector, as well as investment in infrastructure such as railways. “The government started two years ago to work very aggressively on developing infrastructure and a transport network,” says Dubrevskyy.
Meanwhile, Europe is aiming to clinch an Open Skies agreement to bring Ukraine within its Common Aviation Area (CAA). “I couldn’t comment on exactly when it will happen, but as a regional airport we would benefit, getting the traffic that we can’t get right now,” says Osypov.
For Donetsk, the dividends of a deal with the European Commission, which some officials anticipate could happen this year, could be substantial, believes Dubrevskyy. “The open sky project will enable us to reach another threshold, like the Polish experience,” he says. “In Poland, when they implemented Open Skies, the airport passenger flow doubled and this effect lasted for three or four years.”
While Open Skies may not be an imminent prospect, airlines are upbeat about the opportunities at Donetsk. At Routes Europe in May, Wizz Air CEO, József Váradi, pointed out that investment in Euro 2012 infrastructure is combining with the collapse of Ukraine’s national carriers to accelerate liberalisation. “Behind the Euro 2012, they developed infrastructure – lots of airports, new terminals, new runways, etc. That capacity must be put to work and they need airlines to utilise that investment, so I think that at the moment that’s a primary driver of the changes we are experiencing,” he says.
The football tournament also helped to put Donetsk, along with Ukraine, on the map as a destination, notes Osypov. “I wish they understood a bit more than they do right now,” he says. “But thanks to Euro 2012, people are now more and more aware of the region.” For now, though, Osypov sees his immediate challenge as grabbing the attention of the international aviation industry. “Our task is to appear on the airlines’ radar,” he says.
He recalls the recent surprise of a team from Emirates that visited Donetsk to establish the gateway as a relief airport for an A380 flight to Moscow. “They were so impressed – they didn’t even know we had an airport,” he quips. But Donetsk’s hosting of Routes CIS is poised to build on the legacy of the Euros to give the airport a higher international profile.
“The government and the state government are supporting us in holding this event because they know it will bring awareness and show the full potential of our region,” says Osypov. “Just two years ago, one year ago, it was a completely different situation. Now, with liberalisation, and the support of government and the authorities, we can achieve these goals.”
This article was modified from a story that appears in the latest issue of Routes News, the world air service development magazine, and which can be viewed online here.
Related Content
