Kasteli Opens Its Wings

New international airport on Crete to provide visitors with enhanced arrival experience.

InsightsIn Focus
At the forefront of Greece’s ambitious plans to modernise its network of regional airports is the spacious Kasteli International Airport, in the works on the island of Crete. Located approximately 40 km south of Heraklion, the island’s largest city, the contract for the new airport was ratified in May 2019 with broad support in the Greek parliament. Slated to begin operations in the summer of 2024, the new airport aims to provide Crete’s foreign tourists (5.2 million in 2018) with a greatly enhanced arrival experience. In due course, the airport could also serve as a transport hub for the rest of Greece and the wider region. Heavily favoured by German, British, and French travellers for its beaches and cuisine, Crete needs to improve its overburdened transportation infrastructure if it is to sustain its roughly 15% share of the country’s galloping growth in visitors from abroad. Traffic at the existing airport near Heraklion, the country’s second busiest, has steadily grown since 2013, pushing it well beyond its 6 million domestic and international traveller capacity. In 2018 alone, tourism grew more than 10% over the previous year, with 8 million travellers passing through the airport that Kasteli will soon replace. While the new airport’s initial capacity will be 9 million passengers, this will ultimately rise to 15 million. The idea of building a new international airport on Crete has long been under discussion. The project was first floated in the mid-1980s, and an original target date for opening the new airport by 2014 came and went. The decision to finally move ahead with the project now comes as Greece implements a multi-billion-euro infrastructure and privatisation programme that included the recent concession of 14 other regional airports around the country to German airport operator Fraport, as well as a €1.7 billion road works project on Crete. The new airport is expected to feature a 71,620 m2 passenger terminal, initially able to serve from 57,500 to 65,000 daily passengers. But its facilities will also include a 15,000 m2 cargo terminal and an apron area for 44 aircrafts. A 3.8 km runway, one of the airport’s four, will enable giant airliners like the Airbus A380 to bring visitors to the island from around the globe. The construction and operation of the airport is being undertaken by the Ariadne Airport Group. The group is a consortium consisting of India’s GMR Group, whose portfolio includes the Indira Gandhi International Airport in New Delhi, and Greek construction firm Terna, on a 35-year concession. Construction costs are estimated at €450 million. Combined with new road, water, and sanitation works, as well as a plethora of other investments, loans, and land expropriations, the overall project is expected to cost €1.5 billion. The Greek government will participate in the cost of construction to the tune of €180 million and maintain a 45.9% minority ownership position. In January 2019, the European Investment Bank (EIB) announced it would provide a loan for €180 million to finance the state’s contribution. “The EIB recognises the commitment to redevelop the existing Heraklion Airport area to unlock economic, environmental, and social benefits. This redevelopment is an integral part of our loan conditions,” said Andrew McDowell, Vice President of the EIB, who is responsible for lending operations in Greece. “This project will decisively change the island’s position on the world air transport map,” says Regional Governor of Crete Stavros Arnaoutakis. “It will give a major push to tourism on Crete on an annual basis, upgrade the island’s geostrategic role, and, at the same time, consist of an important investment that will offer hundreds of new job positions on a continual and steady basis in coming years,” he adds. The construction phase will provide jobs for some 1,500 workers. According to the Air Transport Action Group (ATAG), once the airport is in operation it will directly and permanently employ between 7,000 and 7,500 workers, with the prospect of indirectly generating another 35,000 to 37,000 jobs in the area. The airport is a key reference point on Greece’s fast-changing infrastructure map. With the new highway and other projects planned for the island jointly valued at €7 billion, the fifth biggest in the Mediterranean, Crete is ready for take-off.
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