German acceleration masks trouble at hubs

03 November 2015
Passenger traffic (millions) at main German airports since 2014. (IHS)

Germany's full-year figures for 2015 are set to show continued growth in traffic, but airports are feeling the effects of legal constraints on infrastructure development

German airports had good news to celebrate in 2015 as first-half figures showed a 4.4% year-on-year increase in passenger traffic to 100.3 million, while aircraft movements rose at a more moderate pace (0.8%) to reach 1.1 million take-offs and landings.

If this trend is borne out in the second half of 2015, the Arbeitsgemeinschaft Deutscher Verkehrsflughäfen (ADV), the association of German airports, will report the third consecutive year of traffic increases. This is quite an achievement, given the fact that Germany continues to levy departure taxes ranging from EUR7.50 to EUR42 (USD8.25 to USD46) per passenger (depending on the destination).

Growth is mostly driven by demand for air travel within Europe. Passenger traffic to European destinations between January and June 2015 increased by 5.6%, almost twice the rate for 2014. The ADV cited a strongly competitive market, particularly among low-cost airlines, as the main reason for the strong performance.

In terms of individual airports, strong expansion by Germanwings/Eurowings at its bases in Berlin-Schönefeld, Cologne/Bonn, Hamburg, and Stuttgart was reflected in rising passenger traffic at these airports.

Schönefeld recorded the biggest growth of any airport in Germany at 11.4% - well ahead of the larger Berlin airport Tegel at 1.9% - and it remains the most competitive airport in the country with four airlines based there: AirBerlin, Germanwings, Easyjet, and Ryanair, which left in 2011 but returned on 27 October 2015. Ryanair bases five aircraft in Schönefeld with 14 new routes. Schönefeld is likely to finish 2015 with passenger traffic growth of 12.5-14%, passing 8 million passenger mark in the process.

Other high-performing German airports include Cologne/Bonn and Hamburg. The former is the largest base for Germanwings/Eurowings, with flights to more than 80 destinations in the autumn 2015 season. The dynamism of Cologne/Bonn also stems from the fact that Ryanair reopened its base in winter 2014/15, and intends to base three aircraft at the airport for winter 2015/16.

Easyjet chose Hamburg as its second German base in 2014. The carrier now flies to 29 destinations and carried 875,000 passengers to and from Hamburg in 2014 - 6% of all inbound and outbound traffic at the airport. With further expansion by Easyjet and Germanwings/Eurowings in Hamburg, airport officials predict that passenger traffic will exceed 15 million in 2015.

In Stuttgart, the arrival of Easyjet and Ryanair, both competing with Germanwings, is also having a positive effect with annual traffic predicted to reach more than 10 million in 2015.

Tougher times for hubs

While these airports are riding a wave, larger airports in Germany face increasingly strong competition from hubs outside Europe. Frankfurt, Munich, and (to a lesser extent) Düsseldorf are losing market share in transfer traffic to fast-rising rivals such as Istanbul (Turkish Airlines), Doha (Qatar Airways), or Dubai (Emirates). Indeed, in 2014 German airlines handled only 1.2% more passengers than in 2013 - a far slower rate of growth than Turkish Airlines, Etihad, and Emirates, which each recorded growth of more than 13%.

The slowdown continued in the first half of 2015, as the biggest airports in Germany grew at less than the national average rate of 4.4%. Traffic at Frankfurt rose by 4.1%, Munich by 3.5%, and Düsseldorf by just 2%.

Large airports in Germany are not only handicapped by high taxation, which deters many airlines from establishing routes, but they also face strict construction constraints on the grounds of environmental protection, as well as often-vociferous opposition to expansion plans from local residents.

For example, Frankfurt had to wait 14 years (1997-2011) before it could open its fourth runway. A proposed third runway for Munich remains mired in disputes with local residents and environmental groups, even though a federal court rejected the final appeals in July 2015. Repeated complaints have managed to delay the project by at least five years.

Munich operator FMG believes that a third runway would help Munich process more than 58 million passengers and 590,000 aircraft movements by 2025, compared with 39.7 million and a maximum of 480,000 respectively in 2014.

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