Fraport Pier G building application highlights Frankfurt’s LCC intent

German airport operator Fraport AG’s submission of its building permit application to the City of Frankfurt for the construction of the new Pier G at Frankfurt Airport highlights the growing value of low-cost carrier (LCC) operations at major airports across Europe.

The extension was originally envisaged as the second phase in the construction of the airport’s new Terminal 3, but is now being realised and commissioned ahead of schedule in response to passenger growth, particularly in the low-cost segment. Fraport says the new pier will provide cost-saving, no-frills ground handling for LCC traffic while being fully integrated into Frankfurt Airport’s hub function.

Subject to all approvals, construction work on the new pier is scheduled to begin in mid-2018 under the responsibility of a general contractor. An EU-wide tender for the work has already been launched. Based on the current plans, the first construction phase of Pier G will be completed in 2020 at a cost of up to €200 million and will provide an annual capacity for four to five million passengers. Fraport says the decision in favour of the new pier development, which fully complies with the zoning specifications for the new terminal, was taken following a comprehensive examination of various options.

“Submitting the building permit application for the new Pier G is an important step that will enable us to alleviate future capacity constraints at Terminals 1 and 2 as early as 2020,” says Dr Stefan Schulte, chairman of the executive board, Fraport AG.

By this date, Frankfurt’s two existing terminals are expected to be approaching their capacity limit of 64 million passengers. That limit could be expanded to around 68 million passengers, but only on a temporary basis and at the expense of quality.

IMAGE – Frankfurt is among the world’s largest passenger and cargo airportsSource: CAPA – Centre for Aviation

“Pier G was already envisaged as the second phase in the construction of our new Terminal 3 and is now being built ahead of schedule. The new pier is designed as a fully functional passenger terminal tailored specifically to the needs of low-cost carriers and will be optimally integrated into Frankfurt Airport’s hub system,” says Mr Schulte.

Until the planned opening of the first section of Terminal 3 in 2023, a bus shuttle will be available to transport passengers from Pier G to and from Terminals 1 and 2 on the northern side of the airport. Baggage transport will also be provided by a temporary replacement service during this period. After that, Pier G will be fully linked to FRA’s people mover system and the airport’s baggage conveyor system.

In a second phase, Pier G will be expanded to a total capacity of up to seven million passengers and connected to the first section of Terminal 3. In the third and final phase, Pier G will be extended to include bridges and jetways.

Fraport says its development strategy at Frankfurt will provide it with the necessary flexibility to support all aviation segments in the future. The integration of Pier G alongside Pier H and Pier J in the initial construction phase of Terminal 3 will support the needs of both the legacy and LCC markets.

CHART – Activities at Frankfurt Airport are dominated by Lufthansa’s hub operationSource: CAPA – Centre for Aviation and OAG

“Frankfurt is and will remain a hub airport. However, the development of the aviation market as a whole means that, in addition to the traditional full-service offering that many airlines expect from us, we have to take the needs of low-cost providers into account and continuously enhance our processes,” says Schulte.

“From our talks with low-cost providers we know that short turnaround times are a particular priority for the LCC sector. However, it is equally important for us to expand our services in our core business with network carriers so that we can continue to offer them a premium product also in the future,” he adds.

To the surprise of many people, Ryanair launched flights from Frankfurt this summer to four mainly leisure destinations in Spain and Portugal – Alicante, Faro, Malaga and Palma using two based Boeing 737-800s. The budget carrier is to put further low-fare pressure on German national carrier Lufthansa by significantly expanding its operations at from Frankfurt in the winter 2017/2018 schedule, boosting its Frankfurt fleet to seven units and expanding its network to include 24 destinations, including many major city destinations.

But it is not just Ryanair that is seeking to take advantage of Fraport’s growing interest in expanding its share in the low-cost sector. The company has also negotiated a deal to bring Central and Eastern European carrier Wizz Air into the facility (daily flights to Sofia started from May 22, 2017 and daily services to Budapest will follow from December 15, 2017), while anchor tenant, Lufthansa, is expected to react with its own low-cost operation, Eurowings starting flights in the future as it has at its other hub at Munich.

While activities at Frankfurt are dominated by the Lufthansa hub operation, which accounted for almost two thirds (64.6%) of total capacity in 2016, low-cost operations are not actually new to Frankfurt. The likes of Onur Air, SunExpress, SunExpress Deutschland and TUIfly, while not always identified as low-cost operators, have provided low-fare services to predominantly leisure markets. More traditional budget carrier such as Niki and Pegasus Airlines have also served the airport for a number of years, while Vueling (2013), Air Arabia Maroc (2015), flynas (2016) and WOW air (2016) have added flights more recently.

CHART – Seasonal scheduled seat capacity from Frankfurt Airport and the rising influence of Low Cost CarriersSource: The Blue Swan Daily and OAG

The Blue Swan Daily analysis of schedules data from OAG shows that low-cost penetration at Frankfurt grew beyond 3.0% in summer 2015, subsequently growing to 3.2% in summer 2016 and 4.8% in the current summer 2017 schedule with over 1.25 million seats. The expansion of Ryanair will grow that share to over 6% in the forthcoming winter schedule with the budget carrier becoming the second largest operator at Frankfurt offering almost double the capacity of Condor, part of the Thomas Cook Airlines Group, which currently holds that position.