Economy, Domestic Economy

IKIA’s Vast Potential Yet to Be Exploited

IKIA’s Vast Potential  Yet to Be ExploitedIKIA’s Vast Potential  Yet to Be Exploited

After years of sanctions imposed against Iran over its nuclear energy program, Tehran’s international airport is facing strong rivals in the Middle East. The government is trying to mobilize its potentials, experts say.

The Ministry of Roads and Urban Development last week announced the acquisition of three new automatic landing systems from Europe, which would improve air-to-land guidance. No information was released on the cost of this project.

Experts believe these acquisitions are the latest in a series of decisions to update airport infrastructure. Research conducted by the Iran Airports Holding Company found that at least $25 million are needed immediately to restore and update airports to the latest international standards.

One transportation expert points out that lack of commitment has led to international airliners picking Dubai or Istanbul as their regional transit hub, rather than Tehran’s Imam Khomeini International Airport.

“We made a mistake over the past 20 years by not developing this airport. Lack of strict planning has been the main reason behind the slow development. And by planning I do not mean the airport’s design but its financial and profit model,” Taadol newspaper quoted Alireza Shirmohammadi, a transport economics expert, as saying

  More Strategically Located Than Istanbul, Dubai

Shirmohammadi discounts the impact of sanctions and believes IKIA could have profiled itself better. The government has only recently started to shift focus to the potentially huge profits involved in having an international transit hub in its backyard.

Dubai, which handled just over 70 million international passengers in 2014, sold about $2 billion in duty-free goods. According to a study by Oxford Economics, the airport supports 400,000 jobs and contributes to 26.7 percent of Dubai’s GDP.

The government’s planning organizations only understood very late that Tehran is located more strategically than either Istanbul or Dubai for a range of flights commuting between China and Europe. Airliners would have a huge incentive to relocate their flight routes to reduce costs.

Imam Khomeini International Airport, currently the country’s main air transport hub, opened in 2004 and has a capacity of 6.5 million passengers annually. In the Iranian year that ended in March 2015, around 6.3 million passengers used IKIA.

“An international airport is considered an entry point to the country it is located in. It reflects the level of development in that country,” the expert said. “We should not wait and rehash the past; instead we should take concrete actions.”  

Nevertheless, sanctions have undeniably been a major obstacle to expansion of domestic airliners. FlyDubai and Emirates, which have recorded impressive growth over the past years, bring in substantial operating revenues for their base in Dubai airport. In Iran too, most large domestic carriers, including Iran Air, Mahan Air and Caspian Airlines, have chosen IKIA as their hub. These airlines have faced severe difficulty updating their fleet and buying new aircraft in the face of US and EU-imposed sanctions.

Iran’s isolation from international financial markets is also a hassle for transit passengers who would not be able to use their credit cards.

Although the government is making efforts to use the potential of air transport, sanctions are also an important obstacle for international airliners intending to relocate routes toIKIA.