Bloomberg News

London Heathrow Resists Rival Hubs as Istanbul Hits Top Tier

January 17, 2013

London Heathrow defended its status as Europe’s busiest airport in 2012, a year when growth rates at major hubs slowed amid the debt crisis and booming cities such as Istanbul challenged more established centers like Madrid.

Paris’s Charles de Gaulle airport attracted 61.6 million passengers last year for a 1.1 percent advance, barely more than capacity-limited Heathrow’s 0.9 percent gain to 69.9 million, while numbers at third-ranked Frankfurt rose 1.9 percent to 57.5 million. Istanbul reaped a 20 percent jump to 44.9 million.

Europe’s traditional hubs are struggling to add travelers as a sluggish economy hurts demand and rivals in the Persian Gulf grab a growing share of inter-continental transfer traffic. Daniel Moylan, aviation adviser to London Mayor Boris Johnson, said that Heathrow, like other older airports, isn’t up to the task and that the U.K. capital needs a new hub able to handle 170 million passengers a year if it’s to compete globally.

“Demand for aviation rises with incomes and there are countries with huge populations where incomes are rising rapidly to which we have very, very limited connections,” Moylan said in a phone interview, adding that the competition between Heathrow and Paris is like “two bald men fighting over a comb.”

Slowing Growth

The London airport, the main base for British Airways (IAG), had increased its passenger tally 5.4 percent in 2011, with jumps of 4.8 percent at Charles de Gaulle and 6.5 percent at Frankfurt.

Takeoffs and landings at Heathrow, owned by the former BAA Ltd. (FER) and constrained by having only two runways, declined 1 percent to 471,000 in 2012, it said Jan. 14, indicating that the passenger total rose because carriers deployed bigger jets such as Airbus SAS (EAD)’s A380, or that planes flew fuller.

At Charles de Gaulle, chief base for Air France, aircraft movements fell 3.1 percent to 491,000, owner Aeroports de Paris said in a statement on Jan. 15, still 20,000 more than at Heathrow. Frankfurt, home to Deutsche Lufthansa AG (LHA), had 482,000 flights, a 1 percent decline, Fraport AG said the same day. Passenger numbers in Frankfurt will probably drop in the first quarter, the airport operator said yesterday.

Madrid Slump

Among west European hubs, Amsterdam Schiphol, the No. 4, posted the strongest passenger growth at 2.6 percent, according to a statement on its website, with the total increasing to 51 million. Movements were also higher, up 0.8 percent to 423,000.

The biggest decline among top airports was at fifth-ranked Madrid Barajas, with the passenger total tumbling 9 percent to 45.2 million and takeoffs and landings slumping 13 percent.

Madrid, the hub for IAG’s unprofitable Iberia unit, and Schiphol, home to Air France (AF) sister company KLM, ranked almost neck-and-neck on 49 million passengers in 2011, with the Dutch airport just 100,000 ahead. The year before that, Barajas had led, and ranked fourth in Europe.

Spain’s economic decline meant that its top airport barely stayed ahead of Istanbul Ataturk, according to figures released by Paris-based ADP, which holds a 38 percent stake in the Turkish facility’s owner, TAV Airports.

Traffic in Turkey was spurred by additional flights at Turk Hava Yollari AO (THYAO), or Turkish Airlines, which is emulating Emirates and other Gulf carriers in building its base into a global transfer hub. The gains follow a 16 percent increase the previous year.

The biggest investor in Heathrow Ltd., as BAA is now known, is Spanish builder Ferrovial SA, which has cut its stake to about 34 percent following the sale of stock to Qatar Holding LLC and China Investment Corp.

To contact the reporter on this story: Christopher Jasper in London at cjasper@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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