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REGIONAL AIRPORTS


REGIONAL AIRPORTS: THE ROAD TO RECOVERY


Regional airports who rely on one main carrier are vulnerable to rapid changes in the aviation market. But can an airport recover if that main airline stops operations? Gary Mason reports


T


he average flight time within Europe is one hour and the average size of aircraft is between 85-86 seats. Some 19,000 flights a week are


performed by regional operators. There are many low volume niche routes and a high proportion of business and transfer traffic as opposed to the low cost carriers who handle most of the leisure traffic. Yet regional airports are especially affected by the economic downturn because they are very dependent on intra-European traffic, one type of carrier or even one carrier only.


So what happens if that carrier - whether a fully


serviced national airline or a low cost brand - folds, decides to take its business elsewhere or to cut routes? Can an important regional airport operator survive such a blow and renew its business model? This is exactly what happened to Hungary’s Budapest Airport. On February 3, 2012 at 5am, the Hungarian national airline Malev folded after its financial situation became unsustainable. The national carrier had been operating continuously for 66 years and was Budapest Airport’s main source of revenue and passenger traffic. The end to a very slow death came after the


European Commission ordered Malev to repay various forms of state aid received from 2007 to 2010. The sums involved amounted to 130m euros, a cash mountain equal to its entire 2010 revenue. “Despite its best interests the owner can no longer provide


36 / AF / January 2014


financial resources for the operation of the airline in the wake of the condemning decision of the European Commission,” an airline statement said. The news of Malev came after Spanair’s collapse in the very same week. The carrier employed 2,600 people and was responsible for close to half of all air traffic at Budapest Liszt Ferenc airport. Part of the Oneworld airline alliance, which also includes AmeriAirlines and British Airways, Malev has a leased fleet of 22 passenger aircraft. At the time of the collapse two Malev planes were still overseas, one in Tel Aviv, the other in the Irish Republic and were not allowed to take off because of Malev’s debts. Kam Jandu, Executive Director for aviation at Budapest Airport says: “Operationally, I think we managed the collapse of Malev as well as any airport could have done. We didn’t have any text books to act as a guide for what to do because this had not really happened before.” Although the airport operators had long been aware


of the national carrier’s long-term precarious financial position that had been ongoing for at least two years, a string of official reassurances right up to the time of the eventual collapse meant that it still came as something of a shock. “As late as one or two days before the collapse we received reassurances that they were fine in terms of liquidity,” says Jandu. “If we are honest, we knew they had been on the ‘critical’ list for two or three years and we had a plan of action.”


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