Airport lands in profit zone again

Despite slightly lower traffic figures, Cologne Bonn Airport generated a surplus of one million Euros in fiscal year 2013. Given the challenging market environment for the German airports, passenger traffic and air cargo volumes were each around 2 percent lower than the previous year’s level. Traffic statistics showed 9.1 million passengers and 740,000 tonnes of cargo.

“2013 was no easy year for the German airports. The market in the first three quarters was marked by airline bankruptcies and capacity adjustments among the German airlines,” said Michael Garvens, Chairman of the Management Board of the airport operator, Flughafen Köln/Bonn GmbH. Cologne Bonn  Airport is nonetheless once again one of the few airports in Germany that made a profit in 2013. “That is good news and the result of our cost-conscious management.”

Passenger traffic

Cologne Bonn Airport lost over half a million passengers during the past fiscal year through airline bankruptcies – especially in tourism traffic – and capacity reductions by the Lufthansa Group and Air Berlin. In the tourism segment, the capacity reduction was largely compensated for by other carriers, who launched additional routes. The stronger engagement of Ryanair last year also brought around 150,000 additional passengers. On the bottom line, the number of passengers fell by around 200,000 versus last year. Domestic traffic remains under pressure. Over 230,000 fewer passengers than a year ago flew on the key routes to Berlin, Munich and Hamburg in 2013. Since introduction of the aviation tax in 2011, Cologne Bonn Airport has lost almost half a million passengers on those three routes. “I can only appeal to the politicians to finally scrap the aviation tax. It is putting huge pressure on the entire German aviation industry, distorting the competition and driving passengers to foreign airports close to the border,” added Garvens with a view to the development of European competitors, who are benefiting from this special German tax and have since been growing at an above-average rate.

Air cargo

The air cargo handled in Cologne/Bonn in 2013 was around 740,000 tonnes, some 2 percent less than last year. Reason for the weaker demand was the sluggish economy in Europe, which was felt by the express operators as well. Other major European express freight airports, such as Paris and Liege, also noticed this trend,

Financial results

Flughafen Köln/Bonn GmbH realised a profit of EUR 1 million in fiscal year 2013. Revenues grew by 2.3 percent to EUR 271.1 million. The company realised the majority of its revenues, 59 percent, with airport charges and ground handling services. The so-called Non-Aviation business accounted for 31 percent with rents, leasing and supply services. Other income made up 10 percent. The revenues in the Non-Aviation business, in particular, developed well when compared with last year with a rise of 2 percent and reached an all-time high of EUR 87.7 million.

On the expense side, there were increases in personnel expenditure (+7.6%) to EUR 114.8 million. This was largely due to salary and wage increases under collective bargaining agreements on 1 January and 1 August 2013. Apart from that, the Supervisory Board adopted and implemented an early retirement and redundancy program.

Costs of materials also rose by 11.8 percent when compared to 2012. This mainly includes costs for maintenance work, but also additional expense for gritting and de-icing materials due to the hard winter at the beginning of the year.

Despite the higher costs, the company was able to reduce its debt in fiscal 2013 by in total around EUR 12 million to EUR 351.1 million. With that, the airport has eliminated almost EUR 60 million of liabilities in total over the past 4 years.

The number employed at Flughafen Köln/Bonn GmbH as of 31.12.2013 was 1,829. The equity ratio improved slightly to 34.9 percent (last year: 34.6%).

Traffic trends

Business has been developing positively over the course of 2014. “We have been registering a clearly upward trend since the last winter schedule. The company has been able to carry the upswing with it into the new year,” said Garvens. Cologne/Bonn is growing above the market average in both business segments.

The airport, for instance, has recorded significant growth of up to 6 percent per month in both the passenger and cargo business from January to May. There was relatively lower growth only in March, with a rise of 1 percent when compared to the same month last year. The cause was the strike by Lufthansa pilots, as a result of which around 40,000 fewer passengers than expected were handled at Cologne/Bonn.

Growth drivers in passenger traffic are the Lufthansa Group with its subsidiary Germanwings and the low-cost carriers (Norwegian, Ryanair), who are offering more seats. But Air Berlin, too, has expanded its capacities again in the summer schedule after sometimes drastic reductions in previous years,

The airport’s noise abatement concept is bearing fruit when it comes to the number of night movements. The number of night flights by the MD11, at 398 in the first four months of the year, has almost halved when compared to 2012. This is a clear indication of the effectiveness of the reformed schedule of charges, which makes operation of louder aircraft at night much more expensive. The discount system, under which airlines operating a Boeing 777 instead of the comparatively loud MD11 pay lower charges, is proving to be a good incentive for cargo airlines like FedEx to operate more modern and quieter aircraft. In the meantime, some 59 percent of flight movements of larger freighters (B747, MD11, B777) are taking place during the day.

Fiscal year 2014

For 2014, Cologne Bonn Airport is again expecting rising passenger and cargo figures. Passenger volumes will increase by 2 percent to 9.3 million. Air cargo will also increase by 2 percent to 760,000 tonnes. With slightly higher sales revenues, the annual surplus will, like last year, be around EUR 1 million.

“As long as nothing unforeseen happens, 2014 will be a good year,” said airport boss Michael Garvens. Besides Lufthansa and Air Berlin, who are offering more flights at Cologne/Bonn again, the opening of a Ryanair base for the winter schedule will mean an additional boost for growth. “We are especially looking forward to the start of the Condor long-haul connection to Cuba in November,” added Garvens.

Cologne/Bonn airport will be making further targeted investments in order to meet the future requirements and ensure safe, smooth operations. One of the key measures is the acquisition of a combined heat & power plant for EUR 5.3 million to ensure an economically and ecologically viable energy supply for the airport in the long term. In addition, more vehicles and equipment will be acquired in 2014 (EUR 5.9 million) and two passenger loading bridges renewed at Terminal 2 (EUR 1.3 million). Some EUR 6.7 million will be invested in the airport’s IT systems. In total, the investments planned for the current year amount to about EUR 47 million.