Kasteli Airport: municipality seeks compensation for loss of revenues

Following a unanimous decision by the Municipal Committee, the Municipality has set its minimum claim at €1,214,894, while reserving the right to seek a higher amount once it gains access to the concession’s financial model and the detailed data used to calculate the airport company’s compensation.

The claim is linked to the 24-month postponement of the contractual opening date of the new Heraklion International Airport, from February 6, 2025 to February 6, 2027. According to the Municipality, the delay not only deprives the concession company of revenue but also correspondingly postpones the commencement of payments provided for under the concession agreement to local government.

The 1% Share Expected by the Municipality

The Concession Agreement provides for a compensatory payment equal to 2% of the airport company’s total operating revenues. Of this amount, the first 1% is specifically allocated to the Municipality of Minoa Pediada.

When the agreement was ratified, the General Accounting Office of the State estimated the total compensatory payment at approximately €114.8 million, of which around €57.4 million corresponded to the Municipality’s 1% share over a 29-year period — equivalent to average annual revenue of approximately €1.98 million.

It is recalled that the Heraklion Airport of Crete S.A. (DAIK) submitted an estimate in September 2025 according to which the revenue loss resulting from the 24-month postponement of operations amounted to €121,489,424. The Municipality applies the contractual 1% to this amount, arriving at a minimum claim of €1.214 million.

The Municipality is now requesting from the Ministry of Infrastructure and Transport the approved financial model and DAIK’s detailed financial data in order to calculate its final claim. At the same time, it reserves the right to pursue additional claims that may arise from updated passenger traffic figures, revised revenue forecasts, as well as rights it believes it may have in relation to the second 1% of the compensatory payment.

The €444 Million Bill

The Municipality’s move comes as the cost of additional compensation associated with the airport concession agreement has already risen significantly.

Following a recent amendment by the Ministry of Infrastructure and Transport, the relevant allocation has now increased to €444.3 million, from approximately €363.8 million that had been budgeted at the end of 2025. This represents an increase of around €80 million in less than a year.

The €444.3 million does not relate exclusively to the two-year delay. It covers a series of additional costs arising from the concession agreement, including the extension of the design and construction period, revenue losses resulting from the delayed commencement of operations, the shortfall in the Airport Modernisation and Development Fee due to pandemic-related measures, and additional costs associated with the construction of the new tunnel on the airport’s road connection.

Particularly significant is the cost of the twin-bore tunnel forming part of the road connection to the BOAK motorway. The total cost of the tunnel exceeds €150 million, with €69.11 million already committed for part of the project.