FLUG REVUE April 2003: Zürich airport faces tough times

ZURICH AIRPORT FACES HARD TIMES

By Peter Brotschi

"A poor investment” – this opinion of the fifth stage of expansion of Zurich-Kloten airport was commonly heard in Switzerland last autumn. In fact, the operating company Unique (Flughafen Zurich AG) had already decided to postpone opening of the new Midfield Pier "E” by at least one year. For, despite being finished, up to 1 September the most expensive building in Switzerland stood unused in the midst of the runway and taxi system. Several years have passed since the referendum in June 1995, when those entitled to vote in the Canton of Zurich approved the loan for the fifth stage of expansion (see box) in the ballot box, and the airline industry has in the meantime suffered its worst months ever. The situation has fundamentally changed: the apparently euphoric growth rates of the mid-1990s have cooled off and, in the case of Zurich airport, taken a nosedive.

At first there was only a slight fall in passenger numbers after 11 September 2001. But when Swissair went bankrupt in October 2001, the airport was forced to contend with a catastrophic 40 percent fewer passengers.

"The grounding of our main customer Swissair was a major blow,” says Sonja Zöchling, media spokeswoman at Unique. As well as the collapse in numbers of passengers and flight movements, Unique had to immediately do an about turn and ensure that the technical operations previously performed by the SAir Group would continue to exist. Thus the airport company took over major parts of the infrastructure itself, for example Swissport's baggage sorting equipment.

Even today Zurich-Kloten airport is still a long way from the numbers it was enjoying at the turn of the millennium. In 2000 it handled 22.7 million passengers, the next year 21 million and the final figures for 2002 are expected to be around 18.5 million. Flight movements have also declined in double-digit percentages: between January and September 2002 213,495 take-offs and landings were registered, down 13.2 percent on the same period of the previous year. "The world-wide aviation crisis and the grounding of Swissair have thrown us back four to five years,” Sonja Zöchling concedes.

But the company looks to the future with confidence. "The fifth stage of expansion will pay for itself. We now have one of the most attractive and qualitatively best airports in Europe.”

But the best quality is to little avail if an airport does not have customers in the form of airlines. Hence, since Swissair was grounded, Unique has put increased effort into airline marketing since, according to Sonja Zöchling, "We are no longer so dependent on only one customer.” But nevertheless the fate of Zurich-Kloten airport continues to depend strongly on Swiss: although Swiss's market share is smaller than the former SAir Group, the overall traffic trend depends to a critical degree on developments at national carrier Swiss.

The winter flight schedule brought some changes with it. Air Canada may have cut its daily Zurich-Toronto flight (which it now plans to resume in the spring), but some new routes have been added. Swiss started by adding some extra flights in the winter season: five flights a day to Rome instead of four and seven daily flights to London City instead of six. It has also increased the frequency of some of its services to Germany, now operating five flights a day to Cologne-Bonn and Nuremberg instead of four.

Ukraine International Airlines now operates a three times weekly Boeing 737-300 service to Kiev, while Japan Airlines' three times a week MD-11 service from Zurich provides a direct connection to the land of the rising sun. Balkan Bulgaria Airlines has also resumed operations to Zurich and now flies a Boeing 737-300 service three times a week from Sofia to the Swiss industrial centre. Volare offers a twice-daily codeshare service to Rome-Fiumicino, while Royal Air Maroc has started flying to Casablanca as well as Marrakesh.

On the subject of low-cost airlines, Sonja Zöchling believes that Zurich-Kloten may not be so attractive for these airlines on account of the airport charges, which are definitely higher than at the airports which the low-cost carriers prefer to fly to. Thus there are plans to increase the airport taxes in 2003 to refinance the fifth phase of expansion. Meanwhile German Wings has been flying three times a day with the Airbus A319 to Cologne-Bonn since the autumn, easyJet is already represented and Sky Europe provides a connection with Bratislava. Since February 2003 Air Berlin has also been flying a daily service.

According to Sonja Zöchling, there is no one airline that Zurich would particularly like to attract, but a direct flight to Australia would be very welcome. Should a new airline come to Zurich or if a new destination is added, Unique's own marketing measures will provide support in any case.

A clear majority of flights, over 86 percent, are to European destinations. By far the most connections are to and from German airports: in 2001 there were 56,207 scheduled and 849 chartered flights to Switzerland's neighbour to the north and its most important business partner, equivalent to over one-fifth of all the traffic handled at Zurich Kloten. Destinations in Africa, Asia and the whole of the American continent account for just under 14 percent of traffic.

Zurich-Kloten's direct competitors are the airports of Munich and Milan. Munich's Erdinger Moos airport has already overtaken Zurich in numbers of both passengers and flights within the first ten years of its existence and is still some way from reaching its capacity ceiling. But traditionally a lot of passengers come from southern Germany to Zurich, and for potential passengers from the Black Forest, the Lake Constance region and the western Allgäu, Zurich is much closer than Stuttgart or Munich.

Milan exercises a certain pull on the population of the Canton of Tessin. The north Italian metropolis is virtually on the doorstep for the inhabitants of Tessin, and therefore draws away additional potential passengers from the already relatively small Swiss domestic market. But Zurich is still among the top ten European airports, even if only just: in 2001 it had the tenth highest number of passengers, 21 million, and the eighth highest number of commercial movements.

General Aviation (GA) is also firmly established at Zurich airport. In the past the question of relocating GA to Dübendorf military airfield was always being raised, especially when flight and passenger numbers were climbing sharply in the 1990s.

"There is no question of that any more”, says Sonja Zöchling in no uncertain terms, quite apart from the fact that GA would not be welcome, for the moment at least, in Dübendorf from the political point of view.

The General Aviation Centre in the eastern part of the airport is well utilised by a clientele ranging from small powered aircraft through to business jets. Whereas the number of scheduled and chartered flights has dropped back, General Aviation has sustained its level of activity and in the first half of 2002 it even experienced modest growth.

Jet Aviation maintains a large base here, also Zimex Aviation, which has a good reputation internationally for business flights. Again, the Swiss rescue service REGA has its headquarters at Zurich airport. There is a real shortage of GA airfield capacity when the World Economic Forum (WEF) is held in Davos, and business jets from all over the world are even sometimes forced to park further afield. Air Force One even visited Zurich once, in January 2000, when the then US President Bill Clinton attended the WEF.

As a large number of approaches to runways 14 and 16 come from German territory to the North, termination of the administrative agreement by the Federal Republic of Germany was a bitter blow for Zurich-Kloten airport. The discussions regarding the state treaty were one of the big political subjects in Switzerland in 2002 and will continue this year. The Swiss Parliament is not happy with the content of the new state treaty that was negotiated between the Swiss Minister of Transport, Moritz Leuenberger, and his German counterpart, Kurt Bodewig. Shortly before the end of last year the upper chamber, i.e. the chamber representing the member states of the Swiss federation in the Helvetic Parliament, despatched Minister of State Moritz Leuenberger for a new round of negotiations to be carried out later this winter.

Nonetheless, the state treaty will have repercussions, and in fact to some extent these are already being felt. Thus, under the provisional terms of the agreement, after 10pm and on Sundays and public holidays approaches from the east will have to be made to runway 28, even though the latter is only 2,500m long and is not yet equipped for ILS approaches. Widebody aircraft like the Boeing 747 and MD-11 already land on runway 28, albeit only in dry weather and when relatively lightly loaded. However, the captain of the aircraft has the final say as to whether he will land on this runway or not.

The crash of a Crossair Avro RJ100 HB-IXM on 24 November 2001 with 24 fatalities exacerbated discussions regarding the safety of this runway. Flight LX3597 from Berlin-Tegel had been diverted to runway 28 as it was just after 10pm, and then hit the ground in a non-precision approach and very poor weather conditions in the final approach.

As an immediate measure, Crossair tightened up the conditions for approaches to runway 28 after the accident: since then, visibility must be at least 5,000m with a cloud base of 500m above ground. The ILS for this runway is currently under construction and should enter service at the beginning of 2004.

In future it will also be possible to approach the airport from the south, i.e. over the city of Zurich. This means that TMA Zurich will have to be massively enlarged to the south as far as the Alps, and this in turn will have repercussions on General Aviation and military flying. An ILS system is under construction for southern approaches to runway 34 and should be up and running by the end of 2003.

Uncertainty regarding the state treaty have had an effect on the political climate, which Sonja Zöchling describes tersely as "tough”. Opposition is now making itself increasingly felt even in municipalities which had previously been in favour of the airport. As the future state treaty will be a fundamental element of the new operating regulations for the airport, these regulations cannot be finalised for the moment, which only increases the planning uncertainty, for the municipalities around the airport do not know where and when they can build what buildings, which is causing unrest and political friction. Andreas Schmid, President of the Management Board of Unique, even went so far as to say that operations in Zurich are currently being ruled by political criteria rather than aviation or market-oriented criteria.

In recent years and decades, referenda relating to Zurich-Kloten airport have always resulted in heated discussion of the importance of that airport. A recurrent theme is whether the economic area of Zurich and Switzerland actually needs a hub airport of this magnitude. The need for such a hub is disputed by the "noise front” around the airport. However, up to now the official policy has always managed to win a majority. The population of the Canton of Zurich, which has the last say as the "home” canton, is aware that the Swiss Confederation, as an export-oriented industrial nation with no coastline, needs a very good air transport connection – and this connection, significant to the whole of Switzerland, is called Zurich-Kloten.

From page 76 of FLUG REVUE 4/2003

Last updated 4 March 2003

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