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Stuttgart growing despite limited space
By Sebastian Steinke
The milestone was reached just before the end of the year, on 28 December: for the first time in its history, Stuttgart Airport welcomed over ten million passengers in one year. Air traffic in Stuttgart increased by a hefty 7.4 percent in 2006, which, as in the previous two years, was again significantly above national average growth (most recently 5.3 percent). Germany's sixth-largest airport, a limited company jointly owned by the state of Baden-Württemberg and the city of Stuttgart, the state capital, each of which has a 50 percent stake, also posted its best ever set of financial results: a profit of 25 million euros, up from 17.2 million the previous year.
“What distinguishes us from other airports is our diverse mix of airlines and business models,” explains Professor Georg Fundel, the airport's CEO, when asked about its growth. “50 percent of our passengers fly with low-cost airlines. Passengers benefit from keen price competition in Stuttgart and can choose from a wide range of offerings.” And competing business models are clearly good for business. Fundel does concede, however, that the healthy state of the economy in Germany's affluent south-west, where unemployment is low and purchasing power high, ensures stable demand.
The airport's biggest airline customer in 2006, accounting for 17.9 percent of total traffic, was low-cost airline Germanwings, followed by Lufthansa, LH CityLine and Eurowings with a combined total of 17.1 percent. This year, however, TUIfly, the result of a recent merger between Hapagfly and HLX, is expected to be number one, weighing in with 21.9 percent of the airport's traffic.
At the start of the year the growth in traffic, particularly tourist traffic, was temporarily interrupted. The loss of TUI “hub days” this winter (on which holiday jets from different departure airports converge on Stuttgart, where they form a ring and passengers and baggage are swapped over before being taken to their final destinations), Fundel estimates the airport has lost 200,000 to 250,000 passengers. Passenger numbers in November were 5.2 percent down on the previous year, and in January there were still 5.1 percent fewer passengers than the year before.
“But it was clear well in advance that it was going to happen,” explains Georg Fundel. “We are expecting negative growth in traffic until the end of March.” Many low-cost airlines also cancelled flights instead of continuing with low passenger loads and profits. In the summer, however, TUI will again be offering 36 percent more seats. Moreover, Air Berlin is expanding the flights offered by its new subsidiary dba, and Germanwings is adding another aircraft to its Stuttgart fleet, which will then have seven. “But things won't necessarily stop there,” says Fundel, who expects passenger numbers to grow by between three and five percent in 2007.
The end of the TUI “winter hub days” can be put down not just to a change of strategy in the travel industry and a return to direct flights, which require less organisational effort; there are also fears that it may be due to Stuttgart's “eye of the needle” issue: the airport has only one runway. Although the runway (which is 3345 metres long and 45 metres wide) was completely renovated only a few years ago, it cannot cope with more than 40 scheduled flights an hour. When general aviation and military flights to the US Army's European headquarters are factored in, 45 or 46 flights are possible at best. If the weather is unfavourable, the runway's capacity is reduced, resulting in delays. And if it has to be cleared of snow, the runway can be out of action for 20 to 30 minutes, which is critical when there are 400 take-offs and landings on an average day. In addition, noise protection considerations dictate that no scheduled flights are permitted between midnight and 6 a.m. Consequently, traffic in the mornings and evenings is particularly heavy.
Unfavourable weather conditions have sometimes caused major delays in winter hub traffic, with tour operators incurring additional costs because of missed connecting flights. Both Hurricane Kyrill on 18 January and the severe winter weather on 24 January forced Stuttgart Airport (STR, to give it its IATA code) to close temporarily.
However, the most obvious solution – building a second runway – promises only a limited increase in capacity. “Given the limited dimensions of our site, the required spacing of 1200 to 1400 metres between runways for independent parallel operation is impossible to achieve” explains airport boss Fundel. “A parallel runway close to the existing one would only increase capacity by a maximum of 30 percent,” says Fundel, who teaches transport at the University of Stuttgart, but adds, “It would, however, bring clear benefits in terms of increased reliability in the event of one of the runways becoming unusable.”
Fundel's preferred option would be a parallel 2500-metre runway to the south. The further this south runway is located from the main runway, however, the more work will be required to fill in a small valley. The alternative is a new parallel runway to the north. But this would involve building bridges for taxiways across the adjacent autobahn – at great cost – and would bring air traffic close to two particularly noise-sensitive built-up areas. So there is no perfect ready-made solution. While the airport has nevertheless begun giving careful consideration to the issue of a second runway, Fundel categorically rejects the idea of extending the airport's short daily operating hours. On this question the airport is in tacit agreement with its neighbours.
Until the runway issue is resolved, Stuttgart is optimising its existing infrastructure. This includes the imminent move of the fuel depot from the western edge of the apron to a new location in the north-east in order to make way for an extension to the apron that will provide space for another 11 aircraft, bringing the number of apron spaces for aircraft up to 60. The airport needs these not just for the many jets that spend the night there but also to provide low-cost airlines with apron spaces near the terminal in order to minimise transfer times. “Flights take off again here in 25 minutes. At Frankfurt/Main Airport it takes them all of that to taxi into position,” asserts Fundel. Moreover, low-cost airline jets carried an average of 110 passengers in 2006, while Lufthansa, for instance, had only 46 passengers on board, a figure that can be explained by the fact that it offers many regional flights. “Low cost is exactly what we want,” says Fundel.
While scheduled flights are handled in Terminal 1, Germanwings has its own departure area in Terminal 2. Terminal 3 handles the other flights, including many tourist flights.
Terminal 4 is more Spartan than the elegant new Terminals 1 to 3, which are reminiscent of those at Hamburg Airport and designed by the same architects, gmp. A converted hangar, it is now used primarily for charter flights for migrant workers and pilgrims, who are often accompanied to the airport by large parties of friends and family. In addition, an area next to Terminal 1 used primarily for special flights is referred to internally as “Terminal 0”. The terminals have a total capacity of 13 to 15 million passengers, which should be enough to meet demand for many years to come.
Low-cost airlines play a particularly important role in Stuttgart, which is why the airport has had to come up with a cost structure to suit this group of customers. The people in this part of Germany, Swabia, have a reputation for canniness, and the airport management team is no exception: the “Stuttgart model” involves outsourcing activities including operations and building management to subsidiaries managed with partner companies, while avoiding redundancies. These subsidiaries are no longer bound by rigid collective bargaining-based public-sector working conditions and can respond with greater flexibility to fluctuations in demand. “We can send staff home an hour early when there are no more flights,” he says. “But, on the other hand, when things are busy they sometimes have to stay an hour longer.”
The airport also promotes a performance-based culture – with detailed electronic data capture in all procedures. Not only does this mean that airlines can be invoiced for the exact service provided, it also allows the performance of individual employees to be monitored in detail. “We see everything our staff do,” says Fundel.
Constantly updated lists of rankings are displayed publicly, allowing staff to compare their performance against that of their colleagues. Those at the top of the list receive annual bonuses of up to 2000 euros. Productivity rose by 7 percent in the first year after the introduction of the system and by another 2.5 percent in the second year. According to a survey carried out by the airport, staff rate the Stuttgart model highly and want to keep the system.
On the other side of the coin, the airport does not hesitate to part company with its least productive staff. According to Fundel, they get a “golden handshake” and leave. He maintains that these are not people who need help to get them through temporary crises, divorces or alcoholism, for example, but people who are simply unwilling to work hard.
“We are not a public-sector organisation; we are a company. The potential for growth lies with our subsidiaries; the parent company itself (Flughafen Stuttgart GmbH) is no longer expanding,” maintains Fundel, explaining the personnel strategy. The company is successfully employing the same methods to run Söllingen Airport, which is used primarily by Ryanair and boasts growth of 33 percent this year, when it will turn a profit for the first time.
Stuttgart shares its catchment area with attractive hubs like Frankfurt, Munich and Zurich, which is why only 60 percent of Baden-Württemberg's people use the airport in their own state capital. The airport plans to attract the defectors back to Stuttgart and is hoping to add an underground intercity express (ICE) train station to the suburban train (S-Bahn) station already at the airport, a plan known as Stuttgart 21. The airport calculates that this could result in a net increase of half a million passengers. It would also alleviate one of the airport's biggest disadvantages, namely that it has to be accessed via busy autobahns that are subject to traffic jams, leading to delays. Stuttgart's new exhibition centre, which is right next to the airport site and set to become a magnet for passengers in the future, would also be likely to gain from the train station.
Meanwhile, airport boss Fundel is also making plans for new long-haul routes and has a secret to reveal: “We are currently in talks with Emirates. There is demand for flights to China, India and Asia, we know that. But at the moment they only have traffic rights for four German cities, and they have already used up all their available rights. We hope to persuade Wolfgang Tiefensee, Germany's minister for transport, to allow Emirates to fly into Stuttgart as well.”
From page 68 of FLUG REVUE 4/2006
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