Julian Jäger and Günther Ofner, joint CEOs, Vienna Airport, interviewed by Marta Dimitrova.
Julian Jäger and Günther Ofner, joint CEOs of Vienna Airport, are taking the airport a step further on its growth path in terms of revenue, passengers and air cargo. This year, construction work on the terminal development and the Air Cargo Center will be expanded to include a new logistic centre for temperature-sensitive pharmaceuticals, while the Airport City is also growing.
“2017 was a record year for Vienna Airport, featuring new all-time highs for the number of passengers handled in the Group and at Vienna Airport,” enthuses Julian Jäger, joint CEO and COO of Vienna Airport.
A record high volume of 24.4 million passengers travelled through the airport, marking 4.5% growth on 2016. Last year’s record-breaking performance is all the more astonishing when you consider that airberlin ceased operations, causing Vienna Airport to lose its second-biggest customer, NIKI. This gap, however, was quickly filled by the success of other carriers, namely Austrian Airlines, Eurowings and easyJet. Long-haul routes also significantly added to this growth.
“The partial consolidation of the European aviation market is the result of high cost and competitive pressure,” Jäger comments. “We lost NIKI within the context of this consolidation process. Even if this gap has been filled and even overcompensated by other airlines, it should be mentioned that our growth would have been even higher with airberlin and NIKI.”
A total of 74 airlines operated at the airport in 2017 with Austrian Airlines, as an established network carrier, accounting for 48% of the total number of passengers and the Lufthansa Group responsible for 64.1%. While low-cost carriers accounted for 16.4% of this volume, Jäger explains that both business models are important for the airport. “Austrian Airlines in its role as a strong home carrier is important, and we have a very good and growth-orientated cooperation with the airline. In addition to Austrian Airlines, Lufthansa subsidiary Eurowings along with easyJet are the main growth drivers at Vienna Airport. Other low-cost carriers such as Wizz Air will also develop this year. These kinds of airlines clearly define themselves on the basis of air fares, and are of immense importance for tourism.”
Indeed, this year the airport expects passenger growth of more than 3% with a substantial growth impetus provided by Lufthansa Group, and the low-cost segment from new carriers such as Wizz Air, which will launch services from Vienna with three aircraft and 18 destinations.
“Wizz Air’s decision to establish a base operation in Vienna and launch new routes confirms the attractiveness of our catchment area and stimulates new growth at Vienna Airport,” says Jäger. “Wizz Air is an internationally-successful low-cost carrier and we appreciate its expansion of flight services for leisure passengers and the new flight offerings especially to the Eastern European region, as this fits well with the geographical position of Vienna Airport.”
Moreover, Vienna Airport launched its new incentive programme on 1 January, designed to improve growth perspectives for airlines and safeguard the future of the hub. “The underlying objective is to lure new flight traffic to Vienna on the basis of frequency increases and launching of flight service on new routes, as well as to offer an attractive basis for airlines. In turn, this will promote the airport’s sustainable growth and boost its competitiveness,” Jäger explains.
New business projects and expansion
Vienna Airport is also moving ahead on its growth path in terms of revenue, passengers and air cargo. This year, construction work on the terminal development and the Air Cargo Center will be expanded to include a new logistic centre for temperature-sensitive pharmaceuticals, while the Airport City is also growing. Günther Ofner, joint CEO and CFO, Vienna Airport, explains: “More than 1,000 new jobs will be created at the airport hub in 2018 thanks to the new business location projects and the expansion of existing operations. This year, DHL and Cargo-partner are opening their logistics sites in the Vienna Airport region. Furthermore, construction activities will commence on Office Park 4 in the near future. It will increase office and conferencing space in the Airport City by about 25,000sqm by 2020.”
A building on the southern side of Terminal 3 is also under construction to enable a better connection between the terminals, adding an additional 10,000sqm of shopping and restaurant space and waiting area. Jäger comments that when the building is operational in 2023 it will significantly improve the travel experience and boost passenger comfort.
Ofner adds: “With commercial space in excess of 140,000sqm, office park facilities featuring about 110,000sqm of office and conferencing space in the future, various convenience stores and service facilities such as supermarkets, a pharmacy, fitness centre, 24/7 postal partner and much more, Vienna Airport provides a comprehensive offering to travellers, as well as neighbouring residents and employees working at the site. The service at the Airport City will be expanded by a health centre in the near future.”
“Commercial offering – a significant source of revenue”
The airport has also recently been expanding its retail and food & beverage offer with local and international brands. “Shopping and food & beverage are of crucial importance and comprise a significant source of revenue for the airport, generating €49 million in 2017,” states Jäger.
“We are focusing on ensuring an ongoing increase in quality and expansion of our brand diversity, as well as a mix of offerings featuring international and national brands. Recently, we put two restaurants of the internationally-renowned celebrity chef Jamie Oliver into operation at the airport and also opened local brands.”
A strong aviation strategy combined with frequency increases and new airlines such as Wizz Air will quickly fill the gap left behind by airberlin and NIKI. It is poised to join the Group 1 traffic category of airports (>25m pax per annum). Moreover, terminal development projects and further expansion of the airport’s retail and food & beverage will undoubtedly continue to make Vienna Airport one to watch, in the pantheon of medium-sized European hubs that are making strides in all of their activities.
