Wake-up Call

Ban On Nighttime Flights in Frankfurt Sees More Cargo Fly By

lufthansa cargo
Lufthansa is investing €2 billion to expand its cargo operations in Frankfurt.
  • Why it matters

    Why it matters

    International airports with nighttime bans, like Frankfurt, are losing more cargo business to those that operate around the clock.

  • Facts

    Facts

    • The amount of air cargo tonnage at Frankfurt has dropped by 8 percent since 2010, the last year before the ban on nighttime flights took effect, costing Lufthansa Cargo €40 million in lost revenues.
    • Politics is blamed for Frankfurt’s stumbles and for the emergence of more popular cargo hubs in Amsterdam, Luxembourg, Milan and Istanbul.
    • German air cargo companies also confront increased operating costs related to carbon dioxide emissions that foreign competitors do not have to pay while competing for cargo with state-subsidized carriers in the Persian Gulf.
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The promise seemed risky back in 2008. DHL, a subsidiary of Deutsche Post AG, promised to create 3,500 jobs at Leipzig Halle Airport if the state government in Saxony coughed up a €350 million ($425.95 million) subsidy. The agreement has worked out well for both DHL and Saxony.

“This year, DHL will employ another 400 workers,” said Markus Otto, vice president of aviation at DHL Germany, bringing the total up to 4,000 employees.

People in the state of Saxony can thank the farsightedness of their politicians for creating the success story at Leipzig Halle Airport, now Europe’s fastest growing air cargo airport with a 69 percent increase since 2009. And because those politicians categorically rejected a ban on nighttime flights, production facilities for companies including Bayer, BMW, DB Schenker and Porsche have sprouted up like mushrooms in the area around the airport.

Frankfurt Airport – Germany’s most important cargo hub where nearly half of all air freight in the country is handled – can only dream of such support.

“The ban on nighttime flying has cost us €40 million in returns”

Peter Gerber, Chairman of the executive board of Lufthansa Cargo

Since November 2011, when new regulations banned flights from taking off or landing after 11 p.m., Frankfurt has been bleeding cargo business. The amount of cargo handled has dropped 8 percent compared with 2010 ― the last year when nighttime flights were allowed. Other airports without nighttime flight bans are cashing in, especially Schiphol Airport in Amsterdam, where tonnage increased by 1.8 percent, despite a global air cargo crisis.

This increase has serious repercussions for the air cargo operators based in Frankfurt. “The ban on nighttime flying has cost us €40 million in returns,” Peter Gerber, chairman of the executive board of Lufthansa Cargo told Handelsblatt.

There is little the company can do, however. It operates a major hub in Frankfurt, where almost half of all freight is unloaded from the bellies of passenger airplanes. Lufthansa remains committed to Frankfurt, despite the ban on nighttime flights, and is expanding its presence there with an additional €2 billion in construction.

Still, the dwindling amount of cargo handling is likely to continue. “A creeping decline is to be feared in Frankfurt,” said Henning Dieter, branch manager responsible for airfreight at DHL Global Forwarding in Frankfurt. “We are glad to be in Germany, but also have nothing against Brussels or Amsterdam.”

Lufthansa remains committed to Frankfurt, despite the ban on nighttime flights, and is expanding its presence there with an additional €2 billion in construction.

Industry representatives blame politics for Frankfurt losing ground to international competitors in Amsterdam, Luxembourg, Milan and Istanbul. The German government recently imposed a national air passenger tax along with the ban on nighttime flying, while the European Union approved a unilateral cap on carbon dioxide emissions cap and trade. These taxes and fees will cost Lufthansa €30 million per year while competitors from the United States, China and the Persian Gulf remain untouched.

And there’s more grim news. Since the aviation industry is excluded from the trade agreements reached by the World Trade Organization in Geneva, German air carriers must compete with state-subsidized airlines such as Etihad, Emirates and Qatar. Those government subsidies also benefit their home airports in Abu Dhabi, Dubai and Doha.

Even equal treatment within the European Union has yet to happen. While an import customs duty tax of 19 percent is withheld directly at German airports, authorities in the Netherlands defer payment until resale, which makes a detour through Amsterdam more financially attractive by preserving liquidity.

Fraport, the management company at the Frankfurt Airport, is desperately throwing money at the problem, spending €300 million alone for noise protection, according to Anke Giesen, a member of the Fraport executive board and director of operations. But with the nighttime flying ban in effect, that’s money Fraport probably should’ve saved.

 

This article was translated by David Andersen. Jeff Borden contributed to this story. To contact the author: schlautmann@handelsblatt.com 

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