Transcript Slide 1

German Airport Performance
Research Workshop
Changes in the Structure of
German Airports Charges
 Marius Barbu (FHW Berlin),
 David B. Heinz (FHW Berlin)
 Prof. Dr. Jürgen Müller (FHW Berlin)
Berlin
10th October, 2008
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Introduction
 Objective of the study:
> Analyse the structure of charges for German airports,
levels and trends
 Results:
> The structure of charges have changed
> Share of variable charges is higher than in the past and
it follows and ascendant trend
 Further analysis:
> Causes
> Effects
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Homogenous Clusters of Airports
Total
Length of
Runway(s)
Nr. of
Runways
Terminal
Size (sqm)
Nr. of
Gates
Nr. Of
Check In
Counters
Passengers
Aircraft
Movements
Bremen BRE
2038
1
36000
10
40
1.7 Mio
33600
Dresden DRS
2508
1
55000
12
24
1.78 Mio
29000
Münster FMO
2170
1
35000
18
38
1.5 Mio
28600
Köln CGN
8137
3
200000
55
80
10 Mio
140000
Hamburg HAM
6916
2
90000
55
108
11.8 Mio
134000
Stuttgart STR
3345
1
121000
70
116
10 Mio
140000
Tegel TXL
5447
2
27000
18
103
11.7 Mio
137000
Frankfurt Frau
12000
3
800000
174
386
52 Mio
476000
München MUC
8000
2
500000
218
311
30.6 Mio
386000
Düsseldorf DUS
5700
2
285000
84
142
16.5 Mio
189000
2005
Small
Medium
Big
Source: Airports website‘s, internet open databases, GAP databases
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Relevant fleet mix
Fleet Mix
Small Airports
Airport
Aircraft
Family
BRE
DRS
FMO
LEJ
B737
A320
CRJ
BAE146
Airport
Medium-sized Airports
Big Airports
Aircraft
Family
CGN
HAM
STR
TXL
B737
A320
CRJ
BAE146
Airport
Aircraft
Family
FRA*
MUC
DUS
B737
A320
CRJ
BAE146
Share of the fleet mix,
in the total
number of flights
Average
2007
94,4%
95,7%
95,4%
85,4%
98,3%
96,8%
97,8%
71,3%
Average
2007
74,1%
74,9%
79,1%
86,3%
73,5%
88,9%
83,8%
92,5%
Average
2007
68,4%
86,6%
83,3%
69,1%
89,0%
92,3%
Source: Own calculations using Arbeitsgemeinschaft Deutscher Verkehrsflughäfen (ADV) data
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Four aircraft families
cover the majority of
Flights, for all clusters
---------------------------------Representative fleet mix
* For Frankfurt Airport, the
number of B747 was not taken
into consideration
Levels of variabilization, 2007
Clusters comparison
Small Airports
Medium-sized Airports
Big Airports
100%
100%
100%
80%
80%
80%
60%
60%
60%
40%
40%
40%
20%
20%
20%
0%
0%
BRE
DRS
FMO
LEJ Cluster
Average
0%
CGN
HAM
Variable Charges
STR
TXL Cluster
Average
DUS
FRA
MUC
Fixed Charges
Source: Own calculations using Public Charges Manuals
Aircraft characteristics were taken from manufacturer‘s official webpage
Assumptions: Seat Loading Factor = 80%
Ground Handling was excluded
• Share of variable charges is considerably high for big airports
• Charges tend to be more variable as the dimension of airports increases – Reasons ??
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Cluster
Average
Trends in variabilization, 2003-2007
Clusters comparison
Share of variable charges – Cluster detail
0,80
0,80
0,80
0,70
0,70
0,70
0,60
0,60
0,60
% 0,50
% 0,50
% 0,50
0,40
0,40
0,40
0,30
0,30
0,30
0,20
2003
0,20
2003
BRE
2004
DRS
2005
2006
FMO
2007
LEJ
CGN
2004
2005
HAM
2006
STR
Source: Own calculations
• The variabilization process follows similar patterns inside clusters
• All airports increased the share of variable charges, over the period
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6
2007
TXL
0,20
2003
Frankfurt*
2004
2005
MUC
2006
2007
DUS
Trends in variabilization, 2003-2007
Cluster Comparison - Averages
Share of variable charges - Cluster Weighted Average
0,80
0,70
0,60
Small Airports
Medium-sized Airports
0,50
Big Airports
0,40
0,30
0,20
2003
2004
2005
2006
2007
Source: Own calculations
• The variabilization process is less pronounced in the case of small airports
• All clusters show an increase in the share variable charges
• In the case of medium and big airports, this
7 increase is close to 50%
Reasons (a)
1
Increase in demand
Airline efficiency
Seat Loading Factor
(SLF)
2
+
?
3
Are airlines
pushing?
Other?!
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+
?
Do aircrafts
become lighter?
Reasons (b)
3. Do aicrafts become lighter?
Typical Seating
MTOW
Tons/Passenger
Year of First
Delivery
A320
150
73.5
0.490
1987
A321
185
83
0.449
1993
A319
124
64
0.516
1995
A318
107
59
0.551
2002
A330/300
335
230
0.687
1993
A330/200
293
230
0.785
1997
A340/300
295
275
0.932
1991
A340/200
239
275
1.151
1992
A340/600
380
372
0.979
2001
A340/500
313
372
1.188
2002
A380
525
560
1.067
2007
Aircraft
Source: Airbus Official Website
There is not evidence that aicrafts become lighter which can induce
a shift towards more passenger related charges
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Effects
 Risk Sharing Between Airlines and Airports is changing –
Airports now bear more risk than in the past
> Are the airports aware?
> Is it a real risk or just a theoretical one?
 Infrastructure developments may get under stress
> Does it affect the decisions regarding new infrastructure
projects? (is this supplementary airport risk playing a
role or not)
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Conclusions
• From an economic point of view the development of the charges structure
can give us important clues about the welfare and allocative efficiency of
pricing policies in the aviation industry.
• Airport charges, in Germany, became more passenger related in the last
period.
• This move towards variabilization increases the risk on the airports side
• It is not clear what is the main cause and/or if the risk shifting puts the
airports under stress (now or in the near future)
• Futher research:
• Identify other possible causes
• Try to quantify the risk (making it measurable) – simulation based
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Thank you for your attention.
GERMAN AIRPORT
PERFORMANCE
A Joint Project of:
University of Applied Sciences Bremen
Berlin School of Economics (FHW)
Int. University of Applied Sciences Bad Honnef
Contact:
Jürgen Müller (FHW Berlin)
[email protected]
Marius Barbu (FHW Berlin)
[email protected]
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David Ben Heinz (FHW Berlin)
[email protected]
Discussions
 Why small airports present the lowest degree of variabilization?
 How plausible are the first two causes we identified? (increase in demand,
airlines are pushing to pass the risk)
 What other causes can be identified?
 How much relevant is the risk the airports are facing, as charges become
more passenger related? Can it be quantified?
 Are infrastructure developments affected?
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Comments and Feedback
from The Audience (a)
 Differences in Seat Loading Factor (SLF) can be an explanation why small airports
have lower degree of variabilization than medium&big ones
 Include Real LCC airports also in research (as small airports), to have a better view
on the power exerted by airlines on small airports
– The problem is that would be hard to analyze the various incentive schemes, like subsidies (especially
those that are not published)
 Try to look also to the levels of charges (expensiveness), not only structure
 Add some case studies to the paper, which might confirm or not the results
 Try also a step analysis and cluster the airports not only by scale, to get a more
relevant view. Suggestions for clustering:
– congestion level, regulation (how they are regulated), Competition, LCC.
 Other possible reasons for why airports switched towards more passenger related
charges:
– capacity restraints
– they simply adapted to the cost structure
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Comments and Feedback
from The Audience (b)
 It would be interesting to see also how the share of different types of aircrafts
changed over time, inside the fleet mix and not only
 Analyse again if aircrafts really become lighter or not. There might be evidence that
aircrafts do become lighter if we keep the same seating.
 The risk discussed in the paper, may exist only in the short-term, represented by a
decrease in the SLF. In the medium term, the SLF might be restored by the airlines,
which will also decrease in the number of flights. This, in turn would bring the airports
to the initial cost-revenue balance.
 Try to change the fleet mix for big airports cluster, because the present one is not
enough relevant. There (big airports), the most revenues are brought by big aircrafts
(B747, A330, A340).
 One big problem is that charges manuals published by airports, may not reflect the
real pricing schemes that are applied in practice. Are airlines really paying according
to the charges manuals?
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