Tom Allett provides a snapshot of recent news from the German airport scene.
As if the Global recession wasn’t enough, April’s Europe-wide volcanic ash cloud dealt another financial blow to all of Germany’s airports. There’s an old saying in Britain that goes: “you shouldn’t kick a man when he’s down,” but that’s exactly how it felt when the commercial aviation industry ground to a halt for several days. The question of whether it will be the airlines or governments that ultimately end up paying the bill for the massive disruption caused by the Icelandic volcano has yet to be resolved. Hopefully, the relaxation of guidelines governing flights through ash clouds will minimise the impact of any future eruptions.
As the memories of those dreadful days in April begin to recede, another talking point has raised its head in Germany; taxes.
In June the German Government announced a plan to introduce what it calls an: “ecological air travel levy,” in other words, a new airline ticket departure tax that it hopes will raise around €1 billion (US$1.9bn) per year. At this stage few details have been revealed about the new tax, but the government has said that it will remain in place until aviation is included within the EU’s Emissions Trading Scheme in 2012.
Not surprisingly, coming at such a crucial stage of the industry’s struggle to survive, the new tax immediately attracted criticism. The German Airports Association (ADV) said that it envisaged air traffic could drop by as much as 3% because of the tax and the International Air Carriers Association stated that the tax is: “totally inappropriate at a time when airlines need support from governments.”
Its Director General Sylviane Lust commented that: “the German government should reconsider its proposal urgently,” and noted a: “worrying trend for governments to misuse the ‘green’ label as a way of making money that does nothing for the environment.”
IATA’s Director General and Chief Executive Officer Giovanni Bisignani slammed the proposal saying: “This is the worst kind of short-sighted policy irresponsibility. It’s a cash-grab by a cash-strapped government. Painting it ‘green’ adds insult to injury. There will be no environmental benefit from the economic damage caused.”
Mr Bisignani’s remarks were made in front of industry leaders gathered in Berlin as the 66th IATA Annual General Meeting and World Air Transport Summit drew to a close in June. Bisignani highlighted three major concerns with the German proposal. “The proposal should be axed. It is the wrong measure at the wrong time; and it ignores the lessons learned from the failure of a similar tax in the Netherlands.”
Addressing his ‘wrong measure’ comment, he continued: “Climate change is a global issue. The solution requires a global approach, not unco-ordinated regional taxes. What will this do for the environment? Absolutely nothing. If the [German] Chancellor is serious about aviation and climate change, the focus should be on finding a globally co-ordinated solution at the International Civil Aviation Organization in advance of the climate talks in Cancun.”
As for the ‘wrong time’ he explained: “Airlines have an important role in driving economic growth, particularly as we struggle to recover from the recession. This is not the time to burden the aviation industry with more taxes. European GDP growth is expected to be 0.9% this year – the lowest among the world’s major regions. Operating in this environment, Europe’s airlines will be the only region in the red with losses of $2.8 billion. This tax is a body blow both to the weak economy and a fragile industry. And it is a kick in the teeth for air travellers at a time when they can least afford it.”
Adding that: “lessons had been unlearned,” Mr Bisignani continued: “It makes no sense. The Dutch government tried to raise €300 million with a similar tax. It cost the Dutch economy €1.2 billion in lost business. It also failed as an environmental measure, sending travellers across the border to start their journey from more tax-sensible regimes.” He concluded by saying: “The Dutch had the good sense to repeal their tax. Why repeat past mistakes?”
Meanwhile, Lufthansa’s Press spokesman Aage Dünhaupt said: “We still need to wait for the exact details of the Eco levy, but we believe it is totally wrong to put a tax on the transport sector which is leading the upswing in the overall industry; it will reduce the growth possibilities for the German economy.”
At the airline’s recent AGM, Lufthansa’s Chairman and CEO Wolfgang Mayrhuber said that the carrier estimated that the tax would hit average ticket prices by between €8 – €16 (US$10-20) and couldn’t be passed on to its customers. He expects the proposed tax will lead to some passengers using airports in other countries just as the Dutch airports experienced before their government withdrew its tax.
With regard to the results returned by some of the country’s major commercial airports, Berlin’s Schoenefeld and Tegel continue to provide the city’s airport facilities while the new Capital Airport BBI is prepared for its possible October 2011 debut.
By the end of the financial year Cologne Bonn Airport said it was back on the growth curve having handed approximately 9.7 million passengers. Overall this represents a 6% reduction over the 10.35 million carried in 2008, and its annual cargo volume at 560,000 tonnes is down 5% on the previous year.
The airport’s Chief Executive Michael Garvens said: “Fortunately, our traffic result turned out to be better than expected. In the second half of the year, both the passenger and cargo volume became more stable, and in November we could, for the first time, once again mark up some growth. Given the conditions we have today, we can be more than satisfied with this result, even if we have by no means overcome the crisis.”
December 2009 was the first month of the year in which Cologne-Bonn exceeded the number of passengers it achieved in 2008, representing a 3% increase for the month. November brought an increase in cargo volume (+6%) though, like the passenger figures, it peaked in December with 11% more recorded than December 2008.
At the start of this year Cologne Bonn Airport was estimating an overall passenger growth of 4% bringing a total passenger figure of around 10.1 million for 2010. This positive outlook was also mirrored for cargo volume where a predicted 4% rise would achieve an annual total of 580,000 tonnes. Of course, the volcanic ash cloud that brought a temporary closure to all German airports in April is likely to affect the end-of-year figures.
Dusseldorf recorded a positive situation with 7.8% growth in the first quarter of the year. That adds up to approximately 3.7 million passengers during the quarter. Comparing the current situation against 2009, the airport’s CEO Christoph Blume said: “This good development proves that the airport is emerging stronger from the  crisis. Our wide offer of destinations and the mixture of traditional airlines and low-budget providers are very well accepted among customers.” The airport’s management envisages that it could possibly equal its record annual passenger level of 18 million which was set in 2008.
Frankfurt Rhein Main
With statistics that show its growth trend is stabilizing, Frankfurt Rhein Main Airport (FRA) set new record levels for both passengers and airfreight in May 2010. Some 4,761,086 passengers and more than 200,000 metric tons of airfreight were handled during the month, beating the previous high set in May 2008 when the Fraport Group served 4,742,024 passengers at its FRA home base.
In percentage terms, that means passenger figures rose by 7.1% in May 2010 compared to May 2009, when 4.4 million passengers used FRA. The biggest gains belong to airfreight though; leaping by 39.7% year-on-year, FRA’s tonnage reached 204,332 metric tons – making May 2010 the busiest airfreight month in Frankfurt Airport’s history.
Commenting on the latest traffic results, Fraport AG Executive Board Chairman Dr Stefan Schulte said: “The extremely satisfying May 2010 figures confirm the positive trend in passenger development and again impressively underpin Frankfurt Airport’s strength, particularly in the intercontinental aviation sector. The high growth rates in airfreight tonnage result especially from Asia’s dynamic economic activity and from airfreight’s special forte of making available at short notice the capacities required by industry and trade.”
Dr Schulte also explained that May 2010 also marked a new record for maximum take-off weights (MTOWs) in absolute terms, with 2.49 million metric tons handled. Aircraft movements improved by 2.5% year-on-year to 41,694 take-offs and landings. Adding: “This improvement includes a significant 8% rise in intercontinental flights, underscoring FRA’s outstanding role as an international air transportation hub.”
Fraport says that its statistics for the year to date (January to May) give a misleading impression of the underlying pattern of growth: “due to a series of extraordinary adverse effects on the air transportation industry.” In the first five months of 2010, passenger traffic increased by only 0.1% year-on-year. Activity was: “depressed because of the harsh winter weather, the pilot strike and, particularly, the unprecedented almost total shutdown of flight operations during the volcanic ash cloud.” However, its management team says the airfreight boom continued almost unaffected by what it calls the ‘flight freeze’. Its growth amounted to 32.7% this May.
At the Group level, Fraport says the factors curbing growth were offset by Fraport’s ‘global diversification’. The Fraport Group’s five majority-owned airports handled approximately 8.3 million passengers in May 2010, up 14.2% over that of May 2009. Cargo throughput (airfreight and airmail tonnage) leapt up 39.2% to a total of 230,064 metric tons, while aircraft movements at Frankfurt (FRA), Antalya (AYT), Lima (LIM), Burgas (BOJ) and Varna (VAR) rose 9.9% to 70,432 take-offs and landings. Antalya and Lima again turned out to be the growth drivers. Turkey’s Antalya Airport registered 29.6% passenger growth in May 2010, while Peru’s Lima Airport welcomed 19.5% more passengers. Aircraft movements climbed 30.2% at AYT and 16.2% at LIM.
Despite the difficult economic situation, Hamburg Airport ended the 2009 financial year with a profit of €35 million (US$43m); compared with the €39 million (US$48m) in 2008. Passenger figures reached 12.23 million in 2009, beating the 12.84 million handled in 2008. Turnover for the year was €224.1 million (US$276.3m) against €230.7 million (US$284.4m) in 2008.
“We managed to hold our course in 2009, generating a satisfying profit in a difficult year,” said Hamburg’s CEO Michael Eggenschwiler. “Hamburg Airport offers its passengers a broad and stable route network along with a high measure of service and comfort. For our staff, we are a dependable employer; for our customers, we are a reliable partner. In 2010, we are continuing down this route and increasing thrust once again. The first quarter of 2010 brought with it a 5.8% growth in passenger numbers and so, we are looking ahead with cautious optimism. Mobility has become a basic need in our modern society; industry studies show that recovery and growth phases quickly follow difficult periods in the aviation industry. For 2010, we are expecting moderate growth in passenger numbers of around 3%.”
After a below-par performance by Munich’s usual standards, its passenger levels are again showing significant growth. The first three months of this year record a year-on-year increase of just over 3% to 7.2 million. In March the number was actually up by 11.4% to 2.9 million passengers making it the best March in the airport’s history. The strong traffic trend is even more significant when you consider the backdrop of the thousands of flights cancelled at Munich Airport in January and February due to bad weather conditions and, to a lesser extent, strike action.
The growth in passenger numbers at Munich Airport was particularly strong in the long-haul segment, which delivered an 11% gain in the first quarter. Traffic on European routes achieved a rise of more than 4%, though domestic traffic declined slightly. UK routes delivered the largest increase in passenger numbers followed by those to the United Arab Emirates, the USA, Italy and Turkey.
Despite this, during the first quarter of 2010, the number of flights handled at Munich Airport was 5.7% lower than a year earlier; mainly because the airlines are using larger aircraft on their Munich routes this year. This is partly still due to the capacity adjustments made by airlines in response to the economic crisis and partly because no slots are available for additional take-offs and landings during peak times.
Global freight traffic is also looking up, as almost 58,000 tons of airfreight and airmail were handled in the first quarter; an increase of 25% as compared with the same period last year.
On the technical side, as of May 2010, Munich has upgraded the capabilities of its advanced-surface management guidance and control system (A-SMGCS). Newly-installed sensors provide extended coverage of the runways, taxiways and aprons, allowing enhanced automated aircraft identification and better ATC surveillance in all weather conditions.
Tom Allett provides a snapshot of recent news from the German airport scene.