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CAUTIOUS GROWTH AT HAMBURG AIRPORT

By Sebastian Steinke

This year, in which Hamburg airport celebrates its 90th birthday, it could finally happen that, as expected, the number of passengers passing through Hamburg's Fuhlsbüttel airport exceeds 10 million. Dr. Michael Kerkloh, managing director of Flughafen Hamburg GmbH (FHG), discusses developments at the airport in an exclusive interview with FLUG REVUE.

As Kerkloh points out, the number of passengers in Hamburg includes only a relatively small number of transfer passengers, some of whom are counted twice at large hubs, and therefore reflects a relatively high true volume of traffic. For Hamburg airport satisfies local demand for direct flights throughout the whole of northern Germany.

Its extensive catchment area covers a radius of some 150 kilometres around Hamburg and even includes southern Denmark. The Hanseatic city will only reap the full benefits of German reunification and the opening up of Poland when Poland joins the EU and the motorway currently being built along the Baltic coast finally becomes a reality. Another interesting feature of this traditional commercial and trading metropolis is that a particularly high proportion of the passengers Hamburg generates are full fare-paying. These are the customers the airlines prize above all else, as Kerkloh proudly reflects.

"Hamburg is growing with the market," he says, explaining his airport's strategy. He expects growth in this generally somewhat weaker year, 2001, to remain at 3%. Hamburg airport is investing in an extensive building programme that is intended to enable further long-term growth both on the ground and in the air, but above all it will improve passenger comfort and ground handling.

Efforts are being concentrated on the future building of a completely new Terminal 2 and linking the airport to the Hamburg S-bahn railway network by the year 2005. An impressive DM 700 million has been made available by the city of Hamburg to finance modernisation of its traditional airport by 2007. A new multi-storey car park and a new administration building have already been built, and work is currently under way on a new passenger vehicle approach road and on building the S-bahn station. The construction phase will continue until 2006/2007 when a new hotel and a new shopping centre plaza are opened and access to the "pier" with adjoining waiting rooms is finished.

"Our airport ground facilities will then be world-class," says Kerkloh. Together with von Gerkan, the famous architect renowned for designing passenger terminals whose accomplishments include the design of Berlin's Tegel airport, Fuhlsbüttel should become equally "compact and quick". For passenger comfort and easy access are the priority among Hamburg's business clientele.

As a regional hub for northern Europe, Hamburg airport sees its development prospects in the direction of Scandinavia as particularly favourable. Already today connections to the Baltic are a particular speciality of Hamburg's.

Kerkloh can imagine low-cost airlines operating out of Hamburg airport, but he makes the point that normally they are aimed more at the airports around a metropolis. In the case of Hamburg there is Lübeck-Blankensee. But, rather than obstructing this growing airport, which today handles around 180,000 passengers a year, as a potential future competitor, Hamburg sees Lübeck airport as complementary and is advising it as a partner on the extension of its railway. And although Kerkloh is interested in low-cost airlines in principle because they would appeal to new markets, he has so far done nothing to attract them to Fuhlsbüttel by offering special terms.

Few remember today, but in the post-war era as Germany strove to get back on its feet Hamburg actually played an important role in intercontinental transportation through Deutsche Lufthansa (LH). As one of the few German airports in existence at the time, Hamburg offered attractive world-wide routes on the Lockheed "Super Connie" and later on the Boeing 707, DC-10 and 747 as well.

But this era is irretrievably over, as Kerkloh explains: in those days the market was strictly regulated, so that consumers had to pay a lot to travel by air. Today the hub system, the product of airline alliances, has changed the role of Hamburg. For this reason the idea that circulated for decades of an alternative location for the airport close to the city has finally been laid to rest.

Besides, the Hamburg market is not big enough to fill a 747 on its own. "We couldn't fill a jumbo, but a 767-300 is a different story," says Kerkloh, weighing up the Hamburg market potential pragmatically. For this reason he can well imagine new longhaul connections from the Elbe to the east coast of America, say to New York, or to south-east Asia. With appropriate support from major airline alliances and extra foreign passengers, Kerkloh even believes new jumbo routes might be feasible. As well as the passenger volume, however, the yield mix, i.e. the proportion of passengers paying full fares, must be right. In the medium term he expects that a general industry trend towards smaller aircraft will benefit medium-sized airports like Hamburg. The foreign destinations that are flown to the most frequently from Hamburg are Spain, the United Kingdom, Turkey and the USA. The biggest airlines measured by takeoffs and landings and passenger volume are Lufthansa, British Airways/Deutsche BA and Hapag Lloyd.

Technically, the 3.2km and 3.6km long runways in Hamburg are perfectly capable of handling jumbo jets. Hamburg's notoriously awful weather matters little to the functioning of the airport. The existing instrument landing system for CAT 3 approaches is used only a few days each year and it is not essential that this is extended to other landing directions. The apron, which at times is a bit cramped, has now been extended in line with demand.

Thanks to Lufthansa-Technik's huge aircraft hangar, perhaps the most prominent neighbour to the airport, the locals are accustomed to the sight of exotic aircraft ranging from the Federal Chancellor's Luftwaffe jet through to pullman aircraft belonging to oriental potentates. Kerkloh is happy to stress that, as home to the three major assets of Lufthansa Technik, the Airbus factory in Finkenwerder which will be working on the A380 and the airport itself, Hamburg is extremely well positioned within the global aviation map.

This opinion seems to be shared by a large proportion of the residents. For one thing the airport has been a major source of employment for 90 years, its catchment area extending far beyond the city of Hamburg. Moreover, the airport is visibly doing everything it can to spare the nerves of the locals, investing in expensive anti-noise windows, anti-noise fans and noise abatement hangars for engine run-ups. It was in Hamburg that the first ever noise abatement hangar was built in 1961, and in the spring of this year the biggest "hush house" in the world, boasting 6,000m2, was completed. Test run-ups are scheduled to take place there this summer.

But perhaps the most significant measure taken in this area has been the policy of deterring noisier aircraft types by making airport charges partially dependent on noise emissions. "Loud means expensive," is the argument used in Hamburg, where the proportion of low-noise aircraft has risen to no less than 99.6%. If at the beginning of the 1990s 63 particularly loud aircraft took off every day, statistically this is down to less than one today. "Acceptance of the airport is very good because we take public concerns very seriously," says Kerkloh, explaining the airport operating company's policy.

Developments in air cargo have been somewhat restrained in Fuhlsbüttel, according to Kerkloh, but consideration is currently being given to modernisation in this area. A large proportion of today's air cargo is either carried in the hold of passenger aircraft or else it is transported by truck to cargo hubs like Frankfurt, Brussels, Cologne, Paris and even London.

The interview concludes with a discussion of the extremely profitable financial side of FHG, which in 1999, the latest year for which figures are available, made a profit of DM 57 million ($25 million) on a turnover of DM 372 million ($163 million). Profits were up by 25% even though turnover rose only by 1.6%. To achieve these results Hamburg subjected its business processes to "X-ray scrutiny", Kerkloh explains. The previous structure had in places been too inflexible, and therefore the airport had founded a number of lean subsidiaries, in some cases with partners, which in each case took on special tasks.

These include companies for computer and information services, for aircraft handling, cleaning, accounting, airport management and development, loading work, special aircraft and their maintenance, security services and the operation of aircraft towing tractors and apron buses. The new structure with specialised subsidiaries has made it possible to significantly improve market proximity and be flexible over tariff and pricing concessions. As it celebrates its 90th anniversary, Fuhlsbüttel is thus well equipped for further profitable growth. Happy Birthday, Hamburg!

FROM PAGE 74 OF FLUG REVUE 8/2001