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HANOVER AIRPORT SEEKS GROWTH

By Christiane Rodenbücher

With extensive investment, a completely new organisational structure and effective marketing Hanover airport is seeking to gain inroads into the competitive tourism travel business of northern Germany and to expand in the cargo area as well. The new Terminal C, with its generously proportioned glass façades, allows passengers to see at first hand many of the activities taking place on the ramp and on the runways, so that they can experience the world of aviation from close by.

Hanover airport has invested heavily in recent years in expanding the airport, having spent an average DM 85 million per year between 1990 and 2000. With a new ramp structure in the west and extra taxiways and aircraft stands in the western area of the site it is now possible - without any disruption to normal operations - for several widebody aircraft to be dispatched at the same time, and a medium "integrator hub" could even be operated. The redevelopment of Terminal C alone swallowed up DM 250 million. Airport operator Flughafen Hannover-Langenhagen GmbH (FHG)'s response to the major fire at Düsseldorf airport was to spend DM 30 million on improved fire protection. The state of Lower Saxony and the city of Hanover each own 35% of FHG, with Flughafen Frankfurt/Main AG owning a further 20% and the Norddeutsche Landesbank the remaining 10%.

The city of Hanover, renowned for its fairs and congresses, is located at the most important road and railway intersection in Europe and, since the S-Bahn railway link entered service in the middle of last year (DM 80 million), Hanover is now better connected to local public transport.

"This investment was absolutely essential. All the construction work had to be completed before EXPO," explained Olaf Schmidt, Commercial Director of FHG, in an interview with FLUG REVUE. "With the new infrastructure and capacity, which is only 60% utilised, we are ahead of other German airports which are adding capacity only after it has already become necessary."

Hanover airport, whose share of the national German tourist traffic is over 8% and which is ranked fourth after Frankfurt, Munich and Düsseldorf airports, is in a very good competitive position, not least because it operates around the clock, which is a crucial argument for airlines and cargo companies alike. "Our round-the-clock operations played a major part in Air Berlin's decision to establish a base in Hanover," says Schmidt. Home carrier Hapag Lloyd Flug, which has run its administrative and maintenance operations out of Hanover since 1973, also sets great store by this advantage. The reason why Hapag Lloyd Flug originally picked Hanover for its base was the fact that it offered plenty of scope for expanding activities in the future, as press officer Wolfgang Hubert explained.

Other points in favour of Hanover airport are the parallel runway system, with a 3,800m long intercontinental-capable north runway and a 2,340m south runway. 80 takeoffs and landings can theoretically be handled per hour. Passenger capacity is 8 million per year, whereas a total of 5.4 million passengers used the airport in 2000.

Today most of the passenger traffic handled at Hanover airport is within Europe, with the Balearic Islands and Turkey the most popular holiday destinations, followed by the Canary Islands and the United Kingdom, but in fact the role of the airport has been completely transformed in the decades since it was first built in 1952. "In the early 1970s Hanover airport lived off Berlin. In 1971, 1.6 million people flew there from Hanover, whereas today no one flies there any more," says Marketing Director Wolfgang Knapp. Competition from the ICE lines finally sealed the fate of the flight connection to Berlin. The previous ratio of 80% domestic flights to 20% foreign flights has exactly reversed itself.

Two-thirds of all passengers in Hanover are holidaymakers. "We are a tourist airport and our infrastructure is primarily geared towards that type of business," explains Bodo Bonifer, Technical Director of FHG. Clear layout, transparency and short routes were prominent criteria in the design of Hanover airport. "Even though 80% of our passengers are based in the Hanover region and only 20% of them fly in from outside, we are very much an outgoing airport," says Marketing Director Knapp. Hanover is apparently not yet sufficiently well known to prospective private travellers.

Even the EXPO exhibition last year did little to increase the familiarity of Hanover, according to Knapp, so Hanover airport is not expecting any long-lasting reverberation effect, as was the case for Seville. Around 200,000 extra passengers were generated by EXPO. 6.4 million passengers had been expected, but only 5.4 million materialised. At the beginning it was assumed that FHG would make a loss of DM 9 million, says Commercial Director Schmidt. In the event, however, thanks to a tight cost reduction programme, the company reported a profit of DM 500,000 in 2000, increasing its turnover by 7.4% to DM 254.5 million.

"EXPO was a big disappointment," Knapp feels. Because the event was directed entirely at Germany and there was insufficient targeted foreign marketing, it was not possible to win foreign visitors to Hanover. Because of this the state of Lower Saxony has founded a tourism marketing company to raise the profile of the state in the public eye. FHG and other companies have financial stakes in it. At present only 4% of passengers coming to Germany from abroad fly to Hanover, excluding business travel.

However, according to Knapp, the company has had a lot of success over the last year in connecting Hanover airport to international hubs. There is also a good chance that the number of European cities with direct flights to Hanover as opposed to flights primarily via hubs can be increased. Stockholm, Helsinki, Oslo, Lisbon, Budapest and Rome are at the top of the list of prospects.

With its "Five Euro Programme" the airport hopes to attract airlines that offer new direct connections to establish themselves in Hanover by 2003. The aim of the "Five Euro Programme" is to permanently increase the volume of traffic handled by Hanover airport. As a special marketing inducement, airlines will recoup the landing and passenger fees less five euro for every passenger who embarks.

Hanover airport also expects to receive a boost from the fact that many hubs are increasingly up against their capacity ceilings, so that the role played by local services will become ever more significant. However, Management does not see any possibility of transforming Hanover itself into a small or medium-sized hub. Lufthansa is happy with the status quo and unfortunately Deutsche BA is suffering from serious financial difficulties. Because of the alliances and hubs there is no scope, Management believes, for Hanover airport to offer direct flights to the USA either.

On the other hand, the airport is able to serve niche markets. After Frankfurt, Hanover airport has the second largest number of flights to the CIS states. "In that region we have location advantages and we even function as a small hub," says Wolfgang Knapp, whose first success in capturing that market was Kazakhstan, back in 1990. Today the routes to the east generate 250,000 passengers per year, primarily recent emigrants of German origin from east European states and business travellers. Ethnic Germans who have resettled in Germany come to Hanover from all over the country to fly to the CIS.

Despite keen competition from the neighbouring airports of Paderborn, Münster-Osnabrück, Bremen and Hamburg, Hanover's share of the tourist market is expected to increase to 10% in the medium-term. The tourist catchment area stretches from Cuxhaven to the north to Kassel in the south, from Anhalt-Zerbst to the east to Osnabrück in the west, while the catchment area for scheduled services is somewhat smaller than this.

Management also believes that the airport is well equipped for the "silver market" of people aged 55 and over. This sector is growing strongly and will become increasingly important in the future. For example, it is already possible to check in from home, and the airport also offers a door-to-door transport service.

A profit of DM 1.8 million is expected for 2001 on a turnover of DM 264 million, with passenger numbers unchanged at 5.4 million. Airport staff have already defined the strategy to be followed over the next few years. Here the priorities will include, for example, increasing customer satisfaction and improving internal and external communications. The entire organisational structure has been transformed, with the three areas of ground handling services, terminal operations and real estate the new centres of focus. IT, traffic services and air service have been hived off into separate subsidiaries.

"We want to achieve a significant, perceptible visitor frequency, and it is not just passengers that we seek to attract," says Bodo Bonifer. In addition to the core business, the airport will offer a world of experience with info- and edutainment on all aspects of the subject of flying, plus shopping facilities. However, there is no transfer airport in Hanover, so the non-aviation business area will not be nearly as important as, for example, in Amsterdam. There take-off, landing and handling charges account for only 30% of income, the rest of which comes from non-aviation business.

Up to now cargo has not played a significant role at Hanover airport. 7,740t of cargo was handled in 2000, slightly up on the previous year, in which the total amount fell by around one half. The reason for this is that there has been a recent trend to replace widebody aircraft with narrowbodies, whose cargo carrying capacity is correspondingly reduced. Another causal factor is the dependence of Hanover airport on the level of air freight business generated by Volkswagen AG. "We hope to expand the cargo area on the strength of our substantial slot capacity, the availability of stands and the good location," says Commercial Director Schmidt, who has already begun discussions with express services about secondary hub possibilities and is also interested in implementing a door-to-door cargo operation with an extensive logistics network. An airport business park is to be developed around the airport, next to which 140 hectares of land are available for aviation and air cargo-related companies and logistics firms. The Dachser haulage company has already set up a base there. Other companies are set to follow. Between 2002 and 2005 the volume of air freight handled at Hanover airport is expected to increase to 14,000t.

With its 50th anniversary approaching on 26 April 2002, Hanover airport has set itself some ambitious objectives. But its location advantages, all the investment that has gone into it and the innovative ideas it is implementing mean that it is well placed to handle new tasks over the next few years.

From page 80 of FLUG REVUE 12/2001