2. The investment project aimed to the reconstruction and global
modernization of the airport in the city of Zhytomyr, achieving its international
status, to set up a low-cost hub on its base, in the Zhytomyr, Kyiv, Rivne,
Khmelnytsky and Vinnitsya regions, a cargo freight center, as well as an aircraft
maintenance and repair base.
Passenger transportation
Cargo freight services
Aircraft maintenance
and repair
Pre-customs storage
Belarus
Poland Zhytomyr Kyiv
Vinnitsya
Rivne
Khmelnitsky
3. Founded in 1937, the Zhytomyr Airport was not used between 1990
and 2014. Since 2014, a private investor has been engaged in its restoration.
During this time, the following stages have been successfully completed:
✓ Passenger terminal reconstructed
✓ Main airport infrastructural objects reconstructed
✓ Maintenance hangar constructed, fit for the Boeing 737, Airbus 320 types
✓ Planning the construction of the logistic center for the postal couriers
4. Increasing the capacity of both existing airports and commissioning new ones remains a very
topical issue at the moment.
The total passenger flow of Ukrainian airports in 2018 amounted to a record of 20.55 million
people. Compared to 2017, when all the country's airports were served by 16.5 million people, the
indicator for 2018 showed an increase of more than 20%. This trend will continue in the coming
years. In just 11 months of 2019, the total passenger flow of Ukrainian airports has already amounted
to 22.58 million people, which is 18.7% higher than the indicator for 2018.
15.1
10.810.6
12.9
16.4
20.5
22.6
0
5
10
15
20
25
2013 2014 2015 2016 2017 2018 11M 2019
MILLIONPEOPLE
YEAR
PASSENGER FLOW
5. The tendency of further growth in air transportation is evidenced by several factors, both
global and domestic.
Firstly, Boeing and Airbus’s order book portfolios were already filled 6–7 years ahead and
totaled more than 14,000 aircraft (Boeing more than 7,000 aircraft, Airbus 7,600). On June 29, 2018,
according to the Flightradar software product, a record number of aircraft, 19,285 airliners, were
simultaneously recorded in the airspace, although on average this mark does not exceed 11,000
aircraft. In 6-7 years, there will be two more in the sky.
The second factor stimulating the further
growth of air transportation in Ukraine is the
signing of the Agreement on the Common
Aviation Space. After the full implementation
of the agreement, air carriers of Ukraine and
the EU will enjoy unlimited commercial rights
in carrying out flights in the direction Ukraine
- EU and between any EU member states,
which will certainly increase the presence of
European airlines in the Ukrainian market by
several times.
6. The most promising direction for the development of the passenger segment of Zhytomyr
International Airport is to create an alternative to the Borispol and Zhulyany airports. Already, the
total passenger flow of these two airports exceeds 17 million people per year. Having won only 2% of
this part of the market (340 thousand people per year), the project will provide a planned load.
It should be noted that with a greater distance from the Zhytomyr airport from the
western regions of the city of Kyiv (Svyatoshinsky, Podolsky, Shevchenkovsky, Obolonsky) in
comparison with the Borispol airport, the time required to reach them is approximately the same -
about 1-1.5 hours.
Competent positioning of the Zhytomyr
International Airport as a low-cost hub, with a
modern passenger terminal, high-quality service
for transporting passengers from neighboring cities
and Kyiv (from the Zhytomyr metro station), with
options for cheap long-term parking of cars near
the airport terminal, etc., will allow for the shortest
terms ensure its popularity both among consumers
and among airlines.
7. Forecasts for 2021-2022 provide an estimate of the volume of freight traffic at more than 60
thousand tons per year. Zhytomyr International Airport plans to actively develop this area and by
applying the best price strategy while ensuring high efficiency (many times better than the industry
leader - Boryspil Airport), to conquer up to 8-10% of this market.
Zhytomyr Airport has a huge
advantage as the future center of air
cargo, due to two factors:
1. Location near the E40 motorway
(Kiev-Lviv), which is the transport
artery of the entire North-West of
Ukraine.
2. The presence of a large number of
inexpensive (in comparison with other
regions) warehouses nearby, which are
also located along the highway.
https://antiraid.com.ua/news/v-aeroportu-borispol-poyasnili-zaderzhki-v-otpravke-gruzov-i-pochty/
8. Project nominal indicators
Indicator Unit 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 year 10 year 11 year Total
Serviced passengers
number
pass.
3 750 67 500 150 300 238 050 330 300 330 300 330 300 330 300 330 300 330 300 330 300 2 771 700
Serviced cargo volume ton.
0 1 860 3 600 4 320 4 320 4 320 4 320 4 320 4 320 4 320 4 320 40 020
Pass. flight number flight 25 450 1 002 1 587 2 202 2 202 2 202 2 202 2 202 2 202 2 202 18 478
Cargo flight number flight 0 155 300 360 360 360 360 360 360 360 360 3 335
Flight number total flight 25 605 1 302 1 947 2 562 2 562 2 562 2 562 2 562 2 562 2 562 21 813
0
100 000
200 000
300 000
400 000
1 2 3 4 5 6 7 8 9 10 11
Serviced passengers number.
0
2 000
4 000
6 000
1 2 3 4 5 6 7 8 9 10 11
Serviced cargo volume.
*More detailed information can be found in the business-plan
9. The modern aircraft maintenance center at Zhytomyr International Airport is aimed at providing
maintenance, repair, and overhaul, primarily for aircraft such as the Boeing 737. Now the airport is
the current technical base of YanAir Airlines.
This direction has great prospects since in Ukraine there is not a single provider of basic services
for aircraft certified according to European requirements EASA PART 145.
Among the potential customers with whom preliminary agreements have already been reached on
the maintenance of Boeing 737 aircraft, it is possible to distinguish:
✓ YANAIR Airlines (5 aircraft)
✓ TARCO AIR Airlines (13 aircraft);
✓ Kam Air Company (6 aircraft);
✓ Bravo Airlines (3 aircraft);
✓ Jonica Airlines (1 aircraft);
✓ Bukovina Airlines (1 aircraft);
✓ Ukrainian Wings Airlines (2 aircraft);
The total number is more than 30 aircraft, which is sufficient for the smooth operation of the Center
all year round, at the rate of 1 aircraft per month and subject to periodicity of maintenance once
every 1.5 years (with a flight time of 3500 hours).
10. Competitive advantage
For the airport For the airlines For the passengers
- The airport already has its
base carrier - the Yan Air
airlines;
- The airport is an air
navigation services provider;
- Airport alone
gives a full cycle of
services:
Fees
Handling
Navigation
Catering
Fuel
- The airport is very flexible in
pricing;
- The Airport has the lowest flight
service price.
- The Airport has a center for
repair and maintenance of
aircraft;
- Free transfer to / from
neighboring cities;
- The lowest cost of parking
vehicles;
- The airport is compact - it is
impossible to get lost;
11. Airport technical specifications:
✓ Airportterritory-1170232m²
✓ Facilitiessquare-8513m²
✓ Runwaylength –1650m/35m
✓ Flowcapability –morethan1000passengersdaily
Project already has:
1. The reconstructed terminal (all the equipment of the terminal was purchased and
installed, key issues were agreed with the State Border Service);
2. Airfield (asphalt concrete runway with a length of 1650 meters and a width of 35
meters, which will be extended and expanded) and a drainage system;
3. Taxiway 15 meters wide and apron for parking of three class 4C aircraft;
4. 2 hangars for small aircraft and 2 hangars for class 4C aircraft;
5. The building of the rescue and fire service;
6. Fencing of the perimeter and special equipment;
7. Hotel with 25 rooms (with interior under reconstruction);
8. Trained personnel, in accordance with all the requirements of order No. 201 of the
State Aviation Administration of Ukraine.
12. Development opportunities through attracted investments:
The main investments are necessary for work related to the extension and
expansion of the runway (1), the installation of light-signaling equipment and an
instrumental landing system, the increase in the number of taxiways (2), the
completion of hangars (4), the repair of the apron and the hangar area (5), and the
construction of a cargo terminal ( 6) and hotel renovation (7).
13. Investment allocation
№ Investment Value, USD
Direct investments
1Extension and expansion of runways, taxiways 12 000 000
2Lighting equipment and landing system 1 500 000
3Completion of aircraft hangars 1 500 000
4Cargo terminal and apron 1 200 000
5Terminal completion to the operation 600 000
6Hotel and restaurant completion to the operation 400 000
7Equipment and special tools for hangars 500 000
8Construction of a parking lot for 1200 cars (30000 sq.m.) 600 000
9Buying buses (for transportation from Kiev) - 6 units 1 000 000
10
Purchase of airfield special equipment (de-icing installation, carts,
etc.) 500 000
11Storage equipment and machinery 200 000
Total direct investment 20 000 000
- Coverage of operating expenses in the first year of the project 0
- Total investments - borrowed funds 20 000 000
14. Project Implementation Schedule
№ Stage
1 year 2 year
Investments 1 2 3 4 5 6 7 8 9 10 11 12 1 2
USD June 19 July 19 August 19 September 19 October 19 November 19 December 19 January 20 February 20 March 20 April 20 May 20 June 20 July 20
1Completion of design work 0
2Runway extension up to 2500 m 9 600 000 2 400 000 2 400 000 2 400 000 2 400 000
3Runway extension up to 45 m 2 400 000 2 400 000
4Installation of light equipment 750 000 750 000
5Landing System Installation (ILS) 750 000 750 000
6Runway completion and certification 0
7Repair of the apron and pre-hangar area 0
8Complete constraction of hangar number 1 500 000 500 000
9Complete constraction of hangar number 2 500 000 500 000
10Complete constraction of hangar number 3 500 000 500 000
11Taxiway construction 0
12
Construction of a cargo terminal and cargo apron
1 200 000 400 000 400 000 400 000
13Purchase of equipment for terminals and hangars 500 000 500 000
14Purchase of special equipment 1 700 000 700 000 1 000 000
15Repair of an existing hotel 400 000 133 333 133 333 133 333
16Parking lot construction 600 000 600 000
17Refueling point construction 0
18Terminal reconstruction completion 600 000 600 000
19
Certification of transportation and ground
handling services 0
20Opening of an international checkpoint 0
21Obtaining an international status by the airport 0
23Start of the airport (technical flights) 0
24
Start of the airport (passenger transportation)
0
25Start of the airport (freight) 0
Stages of investing (monthly) 20 000 000 2 400 000 2 900 000 6 633 333 5 033 333 2 033 333 400 000 0 0 0 600 000 0 0 0 0
VAT refund from the budget 3 333 333 400 000 483 333 1 105 556 838 889 338 889 66 667 0 0 0 100 000 0
15. Project Performance Indicators
Indicator Unit Value
Discount payback period – DPB months 121
Payback period – PB months 75
Project period – PP months 132
Net Present Value) – NPV USD 1 525 307
Internal rate of return – IRR % 13,9%
Profitability index – PI 1,08
Return On Sales, Net Profit Margin – ROS % 45,2%
Return on investment – ROI % 258,0%
EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) USD 81 188 098
EBIT (Earnings Before Interest and Taxes) USD 72 249 209
The financial model of the project, including the forecast of the sales plan, the
forecast of financial results and cash flows, is presented in the business plan and in
an electronic supplement (in Excel format).
The project generates a sufficient level of income, has a sufficient margin of safety,
investments in it are reasonable and economically viable. The project can be
classified as profitable and effective.