GAP Workshop
An Empirical Assessment of
Aviation Charges in Germany
Based on Diploma Thesis of Chi Wah Li, 2007
Presented by
Plamena Ivanova (HU)
Marius Barbu (FHW)
David Hörnle (FHW)
Berlin
10th April, 2008
Outline
• Methodology
• Development of Charges, Passengers
and Revenues, Timeline
• Airplane Related Charges in 2007
• Share of Passenger Charges in Airside
Charges, 1998-2007
• Airside Charges in 2007
• Fixed vs. Variable Charges in 2007
• What is the Welfare Effect?
Plamena Ivanova, Marius Barbu, David Hörnle
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I. Methodology
Plamena Ivanova, Marius Barbu, David Hörnle
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Methodology of benchmarking
Airport
Landing fee 2007 A320200
BRE
653,42
CGN
732,89
DRE
548,31
DUS
380,12
FMO
671,79
FRA
278,23
HAM
615,34
MUC
653,39
STR
409,95
1. What do these numbers
mean?
2. Can we rank the airports
based on these fees?
3. What further assumptions are
necessary?
Plamena Ivanova, Marius Barbu, David Hörnle
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Plamena Ivanova, Marius Barbu, David Hörnle
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Methodology of benchmarking
1. Step
Identify the charges you are going to compare
Landing fee
Passenger fee
Security fee
Noise fee
Central
Infrastructure
Plamena Ivanova, Marius Barbu, David Hörnle
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Methodology of benchmarking
2. Step
Identify the fleet mix
Helpful: use similar types of
airports which serve the same
fleet mix, otherwise might be
difficult to compare. The results
obtained are vaild only for one
airport
Is the fleet mix changing over
time? Shall it be adjusted over
the period under consideration?
Plamena Ivanova, Marius Barbu, David Hörnle
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Methodology of benchmarking
3. Step
Make specific assumptions about the types of passengers
Domestic
EU
NON EU
TransitTransfer
Düsseldorf (2008):
Domestic: 13,45 EUR
EU:
14,55 EUR
Non EU:
14,60 EUR
Transit/
Transfer
8,25 EUR
Plamena Ivanova, Marius Barbu, David Hörnle
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Methodology of benchmarking
4. Step
Determine the load factor – might be useful to obtain the data in
the future directly from the airports
Differenciate low cost airlines vs. „traditional“ airlines
Plamena Ivanova, Marius Barbu, David Hörnle
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Methodology of benchmarking
5. Step
Charges we ignored (Groundhandling)
Ramp equipment and
Aircraft handling
charges (fueling)
Transportation charges
(crew, passengers,
baggage)
Security, x-ray charges
Customs reporting
systems
Others
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Methodology of benchmarking
Having determined the previous components, we can now proceed
with computing the charges according to:
4. Step
Choose a time period – time changes and all parameters too
5. Step
Choose a currency – domestic, specific or artificial
Plamena Ivanova, Marius Barbu, David Hörnle
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Methodology of benchmarking
6. Further assumptions
Time of the day – day or night
Peak or off-peak periods
Parking time for aircrafts
As this is the most sensitive point within the analysis, the assumptions
concerning these issues should be based on actual empirical data or
substantiated through interviews.
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II. Some preliminary
results and further
research questions
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Charges, Passengers, Revenues
Development, Timeline
5.000,00 €
Airside real charges
for Turnaround-Flight
(given assumptions)
4.500,00 €
4.000,00 €
3.500,00 €
3.000,00 €
~ -17%
2.500,00 €
2.000,00 €
1.500,00 €
1.000,00 €
500,00 €
-
€
Millionen
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Total PAX in
Germany
180
160
140
120
100
~ +34%
80
60
Total real revenues of
all German Airports
(incl. non-aviation)
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
40
~ +43%
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Research Question
• Airside prices are falling but total
revenues are increasing
– Increase in passengers
– Increase in nonaviation
• Assumptions:
– Either fleet mix has changed or
– airports discount charges or
– loading factor changed or
– increase in landside revenues? Or....
Plamena Ivanova, Marius Barbu, David Hörnle
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Airplane Related Charges, in
2007
Average Level of Charges for a
Turnaround Flight, in 2007
Charges per Turnaround Flight According
to Airplane Size, in 2007
Big Airplanes
Medium Airplanes
Small Airplanes
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Research Question
• Why is the slope of big-airplane-charges
not increasing steadily?
• Does FRA‘s monopoly position play a role
in it‘s charges structure?
• How about Dresden?
• Are airports trying to increase their traffic
with low charges?
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Airside Charges, in 2007
Share of Passenger
Charges in Airside
Charges (§43), in 2007:
100%
80%
60%
40%
20%
0%
FMO
STR HAM
BRE
NUE
CGN
SXF
DRS
Variable Charges of §43a LuftVZO
LEJ
HAJ
THF
MUC
TXL
DUS
FRA
Fix Charges of §43a fLuftVZO
100
Share of Airside Charges
(§43) in Total Charges, in
2007:
90
80
70
60
50
40
30
20
10
0
FMO
STR
HAM
BRE
NUE
CGN
Plamena Ivanova, Marius Barbu, David Hörnle
SXF
DRS
LEJ
HAJ
THF
MUC
TXL
DUS
FRA
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Fixed vs Variable Charges of Total
Charges (§43 + ZI), in 2007
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
DUS
TXL
THF
FRA
HAJ
SXF
HAM
Fixed Charges
STR
MUC
FMO
BRE
CGN
NUE
LEJ
DRS
Variable Charges
How is the share of variable charges influencing airports performance?
How about the allocation of risks?
Plamena Ivanova, Marius Barbu, David Hörnle
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Share of Passenger Charges in
Airside Charges, 1998 - 2007
60%
50%
40%
30%
20%
10%
0%
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
There is an increase of aprox. 65 % over the period 1998-2007
Does this also increase the risk of airports?
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What is the Welfare Effect for…
•
•
•
•
Airports (Income and Risk)…
Airlines (Income and Risk)…
Passengers (Prices)…
Society (Quality of Transport Services,
Risks)?
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Thank you for your attention!
GERMAN AIRPORT
PERFORMANCE
A Joint Project of:
Berlin School of Economics (FHW)
University of Applied Sciences Bremen
Int. University of Applied Sciences Bad Honnef
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