Schiphol Airport claims to have the highest percentage of LCC operations of the European hubs, but is it true?

KLM Royal Dutch Airlines’ President and CEO Peter Elbers stated recently that Amsterdam Schiphol Airport (AMS) now has the highest percentage of LCCs out of “all European hubs”. He said LCCs have accounted for 60% of all growth at the facility since 2008 and argues LCC growth is “not what the concept of a mainport”, and hub, initially envisioned.

Mr Elbers has cause to be concerned. While there is ample point-to-point traffic for KLM between Amsterdam and numerous cities, it is so high up the pecking order of European airports because of its hub credentials rather than origin and destination traffic. While the Netherlands is heavily populated (17 million) that figure is nowhere near as high as the UK, France, Germany and Turkey. Without those hub passengers many routes might not be viable.

CHART- Europe’s five busiest airports all handled over 60 million annual passengers in 2016Source: The Blue Swan Daily and airport reports (NOTE: Amsterdam Schiphol’s performance for 2017 has already been confirmed as 68.4mppa) 

Amsterdam Schiphol is constrained now, even if it has six runways, as many as London’s five main airports put together. That is mainly as a result of +9.2% growth in 2016 and +7.5% in 2017. Indeed, as Mr Elbers identifies KLM’s growth at the airport will be restricted in 2018 due to slot scarcity and that passengers could turn to high speed rail alternatives.

Ideally, LCCs, along with charter operators, will be directed to Lelystad Airport, which is also owned by the Schiphol Group, so that hub activities can be increased at Amsterdam Schiphol, but there are still reservations over that in many quarters. KLM and the full-service carriers certainly do not wish to be moved away from their current locations.

But is Mr Elbers right to say that Amsterdam Schiphol has the highest percentage of LCCs (21.4%) of the major European hub airports? Firstly, let us define a major hub. Only six European airports exceeded 50 million passengers in 2016; the five listed in the table above plus Madrid Barajas (50.4 million).

If we consider the so-called FLAP airports first (Frankfurt, London Heathrow, Amsterdam and Paris CDG), it is clear that Mr Elbers claim is valid. The Blue Swan Daily analysis of CAPA – Centre for Aviation data and OAG schedules for the current week shows Amsterdam Schiphol has a  21.4% LCC capacity penetration versus 10.5% at Paris CDG, 5.5% at Frankfurt and just 2.6% at London Heathrow.

CHARTS – The breakdown of operations at Europe’s leading hubs highlights that LCC penetration at Amsterdam Schiphol (top) is much higher than others like Frankfurt (second), London Heathrow (third) and Paris CDG (bottom)

Source: CAPA – Centre for Aviation and OAG (data: w/c 08-Jan-2018)

In the case of Paris over half of that capacity is seats on easyJet. At Frankfurt the 5.5% figure may increase as Ryanair increases its presence. Believe it or not Ryanair is now the second largest carrier at the airport by seat capacity though it is well behind Lufthansa at 3.1% versus 61.5%. Heathrow has never really been part of the low cost revolution. LCCs are well catered for at other London airports though several have said they could operate from Heathrow in the future if the circumstances are right (i.e. slot capacity and reasonable charging).  In Schiphol’s case easyJet (again) and Transavia are the two main LCC players, with collectively 14.7% of capacity.

Turning to Istanbul Atatürk Airport, the fifth busiest European hub, LCC capacity accounts for just 5.5% of total seats. Like in London, the airport occupies a similar position to Heathrow in that LCCs are typically handled at another airport or airports, in this case just Sabiha Gökçen where thanks to the activities of Pegasus Airlines LCC capacity accounts for more than two thirds of total system seats (67.6%).

So, Amsterdam Schiphol does have a greater LCC penetration than Europe’s five largest hubs. This just leaves Madrid Barajas as the only other European hub handling over 50 million ppa. Owing to the importance of the budget airline sector to Spain you would expect LCCs to have made a bigger impact there, and that is exactly the case. But, our analysis shows that LCCs account for 21.1% of all system seats this week, within spitting distance, but still behind Amsterdam Schiphol.

Our analysis proves Mr Elbers right in his assertions but one has also to consider a rather fluid definition of just what a ‘major European hub’ is, these days. Dublin Airport for example, which is clearly becoming one with increasing trans Atlantic traffic, has 48.2% of its capacity on LCCs (dominated by Ryanair of course). Copenhagen’s ratio is 33.2% and London’s venerable Gatwick Airport, which considers itself to be a self-connecting hub of the first order, weighs in with a huge 59.0%.

So, as is often the case with statements like this, it is all in the semantics.