is used by major airlines to concentrate

passenger traffic in order to offer a variety

(Mega)Hub of connections.
Examples are Frankfurt, London-
Heathrow, Paris Charles de Gaulle.

Primarily integrated(融⼊) into European air

traffic, numerous connections to mega
Airport Categories by function in the air
International Airport hubs and other national and international
traffic network
destinations. Examples are Berlin, Hamburg,
Hannover, Stuttgart

Legally / technically not defined, usually

scheduled and touristic traffic, predominantly
Regional Airport with smaller aircraft, partly located at outskirts
offering connections to international hubs or
point-to-point（e.g. Friedrichshafen Airport）

Retail & Properties：零售和房地产；Airport

Airport business: free market vs. regulation
charges：机场收费

（Earnings B efore Interest, T axes, D

Where does Fraport make money?
epreciation and A mortization）⼀项业务指
Revenue- and EBITDA-breakdown 2019
标，描述了⼀家公司可持续的税前经营现⾦流。

Business models of airports

What drives the retail business

Passenger mix 2019:

Who are the most important customers for
retail?

Retail revenue airside vs. landside in Frankfurt Retailing airside achieves higher revenue

▪
Economic development is a decisive
Events such as COVID-19, which
driver for global air traffic
disproportionately（不成⽐例地） affected air
General rule: 1 % growth in GDP leads
transport, are exceptions to this
to 1,5 – 2 % in air traffic
rule. However, in the long term, the
The more saturated a market is the less
correlation（相互的关系） can be seen.
air traffic growth is induced by GDP growth

Economic conditions Relation between air traffic & economy

a connection between the GDP of a state

and the frequency of travelling

difference between Low-Cost and Legacy-

Low Cost Carriers
Carrier（In terms of cost structure）

Airbus currently offering more differentiation

than Boeing

Airbus successfully launched the Airbus

New Aircraft Types
A321XLR

lecture 2
Strategic challenges

Low-cost on long-haul services

Can the low-cost business model be
transferred to long-haul flights?
Strategic challenges

▪
Most of these advantages are structural, i.
▪
e. they can be preserved permanently(永久保
Airlines from the Middle East with significant 存）. Due to Emirates（阿联酋航空）' business
cost advantages In order to reduce costs and remain model, which is primarily focused on long-
Lufthansa's cost structure is very high （Vs. Different framework conditions lead competitive, Lufthansa Group is launching haul routes, the airline faced massive cost
especially from the Middle East） to unequal costs new austerity programs（经济紧缩计划）. increases during the pandemic. However, it
▪
Especially at the subsidiaries Eurowings and still operates cheaper than its European
Brussels Airlines, costs have to be reduced in competitors.
order to survive in the strong European
competitive environment.
▪
An increasing number of transfer
Non-European long-haul Airlines passengers from Europe are using
Middle Eastern hubs especially for
their trips to Asia.
Competition is mainly based on
▪
price. Cost advantages of the carriers
from the Middle East enables them
Middle Eastern hubs have gained in to develop their markets more
importance at the expense of established aggressively.
European hubs The restriction of competition by
traffic rights has been made void
in a lot of cases, as the European
▪
Market is already fully opened to
Turkish Airlines and some middle
Eastern airlines hold shares in
European airlines (e.g. Qatar – IAG) in
order to secure access to the market
▪
Customer benefits from:
− Maximum connectivity
− Broad range of choices
− Strong identification with
local brand
Capacity is allocated to
hubs based on capacity,
multi-hub strategy to generate benefits for
cost and quality:
customers and flexibility of production
− Increased reliability
− Risk diversification
▪
− Flexible capacity
▪
management
▪
Standardized A320 family
▪
enables flexible reallocation
▪
across the group
▪
Joint Ventures（合资企业）
Joint capacity management
Joint Ventures expand the multi hub system Joint pricing
Case study Lufthansa How Lufthansa faces challenges
to a global network Joint product strategy
Mutual market access（相互市场准⼊）
Revenue sharing（收⼊分享）
▪

Growing Direct Distribution Share（直接分销

份额）

▪
Evolution of revenue management enables
individual offers to customers Airlines can differentiate their products and
services
(distribute entire portfolio, including
ancillaries and
promotional fares → rich format like photos
or videos is
NDC – New Distribution Capability possible)
Aggregators and travel agents（聚集者和旅
⾏社） get access to full and rich
air content of the airlines
Corporate buyers and travellers benefit
from a transparent shopping experience（透
明的购物体验）

Growth in Europe is weaker than the global

average. Shift of power is towards Asia.
Global aviation faces structural changes.

Profit margins of airports in their core

business are not sufficient, non-aviation
businesses ensure necessary profit, e. g.
retail and/or international shareholding。

Airlines differentiate their product to appeal

Business models of airports in Europe are
Conclusion under pressure.
to individual customer needs and to exploit
consumer surplus (Konsumentenrente).
However, airports maintain a rather inflexible
infrastructure to react and within the EU are
not allowed to set market prices for airport
fees.

Consequently, European airports are caught

by a shift of growth towards Asia while
competition in Europe is fierce and survival
hard. The pandemic and the Ukraine-Russia
war add to the challenges.