BergerWorld: 4th Quarter 2006

Opened on April 5, 1937, Ruzyne International Airport (PRG) serves Prague (population 1,186,618), the capital of the Czech Republic. As the country's principal aviation facility, PRG has experienced significant growth in passenger traffic over the last decade. Between 1991 and 2002, the number of passengers at the airport grew from 1.5 to 6.3 million, and in 2006, PRG accommodated more than 11 million passengers. The continued increase in traffic demand, along with the Czech Republic's entry into the European Union in January 2006, required the expansion of the existing passenger terminal. As a result, PRG initiated a $353 million Terminal Improvement Program. The Berger Group was selected by Bank Austria Creditanstalt, HSBC and ABN Amro to serve as independent consultant to evaluate the proposed improvements.

Berger began the assignment by reviewing the construction budget as well as the proposed improvement schedule for the PRG expansion. The Team then examined the technical risks of the project, including potential interface problems between contractors and the ability to complete the project on schedule and under budget. Implementation schedules were analyzed in detail for each stage of the development, and Berger concluded that the existing plans and schedule were both reasonable and cost-effective. Finally, a detailed report was submitted to airport officials, summarizing the Team's findings and recommendations for the successful implementation of the improvement program.

In 2005, the new 53,195-meter? terminal opened on time and under budget. The three-story facility has increased airport capacity by one-third and includes separate arrival and departure levels as well as a subterranean luggage distribution center. PRG is planning further expansion with a new 3,500-meter parallel runway, RWY 06R/24L. The runway will be constructed 1,525 meters from the existing runway and is expected to begin operations in 2010. Aside from increasing airport capacity, the new runway will significantly reduce the noise levels in densely inhabited areas of Prague by rerouting the air traffic space around the airport.

Ostrava International Airport (OSR) is one of the largest regional airports in the Czech Republic. Offering daily connections to Prague, Vienna and Berlin, the airport is a gateway for passengers traveling to North Moravia and Upper Silesia. Since 1998, the number of passengers at OSR has increased by nearly 200,000, and the facility currently serves nearly 300,000 passengers a year. Additionally, the airport transported over 1,760 tons of cargo in 2006, up from 1,100 in 2000. Due to the increased passenger and cargo volume, the Berger Group was commissioned, under an USTDA-funded project, to study the need for the expansion and modernization of OSR.

Berger began the study by reviewing the airport's historic traffic growth, capacity of existing facilities and anticipated future traffic. The Team also reviewed the airport's current financial structure, revenue and cost trends, anticipated operating and maintenance expenditures, and the airport's past and potential impact on the regional economy. Opportunities for additional revenues were also identified, including the incorporation of a nearby commercial zone that will include a number of hotels and restaurants. Finally, the Team prepared cost estimates and implementation schedules to ensure the successful execution of an $80 million development plan, including a new terminal, additional cargo facilities and new aircraft maintenance shop. Berger also recommended upgrades to the airport's existing terminal, runway, lighting, signage and operations equipment.