Paderborn-Lippstadt Upgrade

In an effort to increase its non-aviation revenues, the airport has introduced its first chargeable car parking spaces. Labelled as the premium parking area, they are located immediately outside the terminal building.

Tom Allett asked Paderborn-Lippstadt’s CEO Elmar Kleinert about his airport’s recent redevelopments.


In an effort to increase its non-aviation revenues, the airport has introduced its first chargeable car parking spaces. Labelled as the premium parking area, they are located immediately outside the terminal building.

Paderborn/Lippstadt Airport (IATA PAD) in western Germany is 12 miles (18 km) from Paderborn city centre in the North Rhine-Westphalia region.  Originally built to allow a traditionally agricultural area to play a bigger role in the 1960s business world, PAD continues to undergo upgrades that many other regional airports would love to have.
Its first ad-hoc passenger service, which took place in 1971, operated from the taxiway under Visual Flight Rules (VFR).  The first administration building opened four years later, coinciding with the first scheduled passenger flights to Frankfurt.
The original 5,774 ft (1,760m) 06/24 asphalt runway was commissioned in 1984 and extended to its current 7,152ft (2,570m) length in 1988.  Charter flights commenced soon afterwards and work to widen the runway to 148ft (45m) was completed in 1994.  Today it has a CAT I ILS at both ends and the split between business and leisure traffic is approximately 80/20%.
After the long-serving previous CEO Fritz Henze retired in 2008, Elmar Kleinert, formerly of Berlin’s Tegel and Tempelhof airports took over.  Mr Kleinert was an engineer with Lufthansa before his seven years with Berlin Airports, but now he has returned to his home town.
“When I arrived the number of travellers was in decline.  Over 1.3 million passengers used the airport in 2004, but since then passengers numbers had fallen some 30-35%.  Obviously we needed to analyze the reasons behind this drop and our findings found three ‘action’ areas.
“First of all the infrastructure needed radical improvements to make services, shopping and catering facilities more efficient and attractive to our customers.
“Secondly, our investment had fallen behind that of our competitors.  While associates of our competitors annually subsidise airport deveopment with €20-€30 million over several years, Paderborn-Lippstadt Airport was restricted to its own captial resources and we were therefore at a disadvantage.
“Thirdly, we hadn’t developed our airline facilities as well as we could have and the timetable was dominated by just a few airlines and needed more variety.

The end of an eight-month redevelopment period was celebrated by a travel market held in November. Cutting the ribbon to officially open the new travel retail area are, from the left Chairman of the Board, Reinold Stücke, airport CEO Elmar Kleinert and District representative Manfred Müller. (PAD)

Mr Kleinert acknowledges that the whole industry is under pressure, not just the airlines and travel agents, but the airports as well, adding: “Yield is under pressure and like everybody else I don’t like the departure taxes imposed upon flights from Germany [€8 per sector for domestic, €25 for European destinations and €45 for intercontinental services].  If I could make a wish that would change one thing I would get rid of that tax, making us more competitive.
“We have tackled our problems step by step and now we have a completely new check-in area with 18 desks and the baggage set-up has been completely redeveloped at a cost of €1.5 million (US$2m).  Before [redevelopment] it was made up of two separate parts, but everything is now integrated into a single system that is much more efficient.”
As Sunday shop opening times – except those at airports and petrol stations – are severely restricted in Germany, airports routinely attracts a significant number of shoppers or browsers at the weekend.
“We also needed to improve our non-aviation revenues and part of this is being done needed by improving our attractions for non-travelling visitors,” explained Mr Kleinert.
“We have a considerable number of weekend visitors who come here just to see what we have to offer, especially on Sundays, so we needed to improve what we have on offer,” he continued.
“The travel agents are especially popular and we have increased the number we have here and given all of them extra floor space.  This helps to bring more visitors to the airport – hopefully spending money here – and, at the same time increases the amount of rent we receive.”
 
New Brand
With so much work needed to turn the airport’s fortunes around, Mr Kleinert explained that he chose to focus on improving the airport’s overall image first.
“We needed to develop a new brand, a new web site, a new lounge, then we moved on to improving the layout of the security lanes, which had the knock-on effect of increasing the amount time that passengers had available in our first duty free shop.”
Two extra travel agents have opened offices at Paderborn-Lippstadt this year and all those present have been given extra floor space. (All images Mick Dodsworth unless stated)

Over the last eight months building work inside the terminal was more or less constant, though, due to the noise created, this probably inconvenienced those that worked there more than the passengers.  Regular travellers will have noticed a difference though.
“The variety of food and drinks we had on offer wasn’t good enough so we have redeveloped the landside restaurant and it now offers extra seating and a better choice of what to eat and drink,” said Mr Kleinert.
“Now the security lanes have more space and that means that they are able to process passengers more efficiently.
“We had little to offer the passenger post-security before, but now things are better and these improved facilities attract significant business now.  As mentioned before, previously we didn’t have a duty-free shop.  Now we have one that covers approximately 4,305 sq ft (400m2), allowing us to offer many product lines and it earns about €21,000 (US$28,000) per month or, if you prefer, about €250,000 (US$335,000) a year.
“If you add this to our other retail earnings and car parking fees, overall, our non-aviation revenues are up by about €700,000 (US$937,000) this year.  Last year our non-aviation revenue represented about 4% of our total turnover but, by the end of this year, that should work out to around 10-15% of our turnover and, looking forward, I would like to see us earn 30% of our income through non-aviation revenue streams.”
Asked if there is any more that Paderborn-Lippstadt can do to help its airline partners Mr Kleinert replied: “Cheaper landing fees would help a lot but the question is how we can achieve this?  We have started to focus on increasing our non-aviation revenues now.”
In the past Paderborn-Lippstadt has been in the enviable position of providing all of its car parking spaces free of charge regardless of how long visitors’ were staying.  Now though, the need to generate more non-aviation income has led to the introduction of the first charges.
The introduction of a duty-free shop has earned the airport an average of around €21,000 per month.

“The first step was to introduce 600 premium parking spaces right in front of the terminal so that we are now earning money from those who choose to take advantage of the most convenient parking spots,” Mr Kleinert explained.  The vast majority of PAD’s parking spaces are still free of charge though, and even these are close enough to the terminal to allow most visitors to make the short walk to the terminal with their bags. It will be interesting to see if the charging areas will have to be extended beyond their existing area sometime in the future.  PAD still relies heavily on passengers arriving by road as it doesn’t have any adjacent rail connections, and while it does have a few well-used bus routes, this is a facility under development.
PAD’s competition comes from Dortmund and Dusseldorf to the west but it would seem likely that, subject to EU approval, a new competitor airport will be built near Kassel, about 45 miles (70km) to the east.  Some think this would bring too much capacity to the market, and Mr Kleinert says the airlines don’t want to use it, but the political will to build it is strong and it may be that construction work will start in the spring of 2011.  In the meantime though, PAD’s management team can only tackle its existing pressures.
 
Aviation Minded
While UK airports are not known for welcoming people who are not flying and many of them clearly discourage aviation enthusiasts from visiting, in Germany the opposite seems to be true.  Generally speaking the German airport authorities recognise the ‘meeters and greeters’ and the aviation enthusiast are also potential revenue generators and provide facilities for them.
In the same way as bigger airports like Frankfurt, Munich, Hamburg and Berlin-Tegel, provide visiting areas for those who wish to see some aviation ‘action’ Paderborn-Lippstadt will soon have its own spectator facility thanks to the construction of the Quax hangar about 200 yards (180m) to the east of the passenger terminal.  Quax was the nickname given to a former Luftwaffe fighter pilot made famous in Germany after a movie was made about him.  From the spring of 2011 the new Quax hangar will be home to around nine airworthy vintage aircraft that will be flown and maintained by their owners.  Located as close to the main runway as regulations permit, the new facility will also provide access to an adjacent grass runway.  About half of the hangar will be transparent in order to allow visitors to see the aircraft being worked on and a bistro and viewing area will be provided on the roof.  Anyone wishing to use the viewing terrace can do so free of charge and the Quax Chairman Peter Sparding hopes to provide joyrides for visitors on a cost-only basis.  The cost of the hangar’s construction is being met by the airport and Quax will rent it from them thereby providing another revenue stream.  Not surprisingly, the very rare opportunity to see and perhaps even fly in a historic aircraft is expected to attract many visitors, especially during the summer.
The hangar is part of a €7.5million (US$10m) investment made this year.  €6 million (US$8m) of that has been loaned from the local government with the airport’s shareholders providing a financial guarantee rather than having to pay for the developments themselves.
Mr Kleinert summed up his pride in how the airport has progressed by paying tribute to its staff.  “They are extremely company minded, well trained and very focused on pushing things forward.  That’s very unusual in my experience,” he concluded.