Topic of the Week: The Reunification of Berlin

Oct 21, 2011

13 comments

13 responses to “Topic of the Week: The Reunification of Berlin”

Gary Leff

Oct 21, 2011 at 4:30 am

The *airport* won’t be the major driver, if Berlin transatlantic service works it’ll be because of Air Berlin’s tie-up with American. Of course, the new airport will be a better place to connect than Heathrow for American’s customers…

Reply
1. CF
  
  Oct 21, 2011 at 4:32 pm
  
  I’m not as convinced. Right now, you have local demand in Berlin split somewhat by airport. Air Berlin’s largest presence is at Tegel while you have big operations from easyJet and Germanwings (among others) at Schoenfeld. There are people that might fly Air Berlin who instead decide to fly easyJet because Schoenfeld is closer to them. With one airport, Air Berlin instantly has a larger potential catchment area.
  
  This doesn’t matter for long haul flying because there isn’t any long haul from Schoenfeld today, but if there is a more robust short haul network supported by stronger local demand, that can help to support long haul flying via the hub. There is definitely the potential for greater hub efficiency with the single airport serving the city.
  
  Reply
Greg

Oct 21, 2011 at 5:26 am

I rally preferred flying into CDG and connecting to THF or TXL, the new airport is too far out.

Reply
Marc

Oct 21, 2011 at 6:17 am

I see this as a huge chance for not only berlin, but also for airberlin and germany itsself! The airport really isnt that much futher out depending on where you wanna go. And TXL and (already closed) THF were already operating at their max capacity. Berlin has huge growth potential and the new airport in combination with airberlin will surely make best use of it.

And BTW, according to internal sources BER will see a few other oneworld carries flying into BER next year. AA, CX, JL,…

Reply
David SF eastbay

Oct 21, 2011 at 7:12 am

Well there is a lot of history there both good and bad. With an AA/AB tie up it could just be a big connecting center depending on how many cities you can connect to and how many U.S. both carriers have nonstop flights from. But it would be a very long time before you see AA/AB being able to compete with UA/LH at FRA and MUC.

Air Berlin does fly to other U.S. cities during the summer so maybe they will turn some of those flights into year round also. The SFO service going year round would help AA/AB compete with UA/LH in the market.

Reply
MathFox

Oct 21, 2011 at 11:04 am

Well, Berlin holds a significant home market (both in population and as destination) and consolidating the traffic to a single airport creates an airport approaching hub-scale. It will serve Berlin well, has good (public transport) connections to the city, I expect no big changes in passenger numbers originating from or having their final destinations in the Berlin region.

We’ll have to see how economy develops in the coming years, how many airlines will pick up flying into BER with their new 787s… Air Berlin by itself won’t be able to make Berlin a major hub, but the consolidation provides more connection opportunities. And that makes it more interesting for airlines to have a presence there. And I think the Eastern Europe has the potential for growth and Berlin would be a natural candidate to capture connecting traffic from Poland and the Baltic states.

Reply
Sanjeev M

Oct 21, 2011 at 11:50 am

Thanks Brett for bringing this topic up. Having a single consolidated airport is best to nurture economic growth. Some people are complaning that it’s too far from the city but 20 min by train or 15 miles by car sounds great by American standards.

Ryanair has threatened to leave once the new airport opens but I highly doubt it (plus I think the new airport has some ground level gates). Looking at AB’s schedule right now they don’t really have much of a hub structure to deal with USA connections. Also they need to grow in Eastern Europe or the Middle East for connections to make sense.

The a.net thread seems to agree that Berlin is “all low-yielding” but I think there is enough volume to make it a true hub for one carrier (AB). If our conservative friends at AA can get moving on ORD-BER or DFW-BER we’d be set. I also believe LH might start a 3-weekly IAD-BER (capital to capital) just to spite AB.

Now also remember, AB is also developing VIE and DUS as hubs as well. Cathay I believe is a long-shot to any of these hubs. I’m also not sure where RJ or MH fits into this picture.

Reply
Jim

Oct 21, 2011 at 4:20 pm

I don’t think there will be more O&D traffic to Berlin. Due to the dominance of Frankfurt, I don’t think it will be much of a hub, either. It will probably just be as big as the sum of the two airports it’s replacing.

Reply
1. Sanjeev M
  
  Oct 21, 2011 at 11:57 pm
  
  Well hopefully it can even maintain the sum of the two airports it’s replacing. I think the belief is that if AB doesn’t grow into the hub and oneworld, then AB will be sandwiched by LH on the upper end and easyJet/Ryanair/germanwings at the lower end. That could be problematic for AB and actually shrink Berlin traffic from what it is today.
  
  AB is not in the best financial shape so they need to take this new airport in full swing (with help from Oneworld partners for feed). They cannot afford to be the semi-leisure/charter airline that they have been in the past.
  
  Reply
Maarten

Oct 23, 2011 at 6:47 am

Berlin – NY? Delta tried and failed. Continental tried and failed. I lived in Berlin for 3 years (under the flight path of historic Tempelhof) and the real problem with Berlin is not what it is (the capital, the political center, historic and beautiful tourist destination) but what it isn’t: a business hubb. There are few major businesses based there. So tourism is really the only reason to fly, and I think that’s where Air Berlin might stand a better chance than the US carriers. Because AB will cater mostly to regional “outbound” travelers wishing to visit the US and then returning. And tourism is where Air Berlin with their reasonable rates can compete against Lufthansa or any other carrier who depend more on selling premium seats to business travelers. It will be interesting to see how they fare.

The airport is not that far as people claim. Plus it now has a very decent rail connection directly into town, something that Tegel can not offer.

Reply
Jeff S

Oct 23, 2011 at 12:57 pm

I just visited the site of the new Berlin airport and it’s quite extraordinary. It will see 77 operations per minute, which is busier than ATL.

Reply
Hermann

Oct 24, 2011 at 12:25 am

I don´t think we will see significant traffic there anytime soon. I agree with Maarten that BER does not have much premium travel demand and there is not much in the area to warranta long term growth in the business travel market. Plus, IMHO AB will partly hub there because FRA and MUC are in LHs tight grip and DUS is getting increased attention from LH as well with flights to Asia coming in. Lastly, AB does not have the product to appeal to business travellers. My view of BER is that it is a major airport mainly for political reasons.

Reply
Carl

Oct 24, 2011 at 7:21 am

I don’t think that the consolidation of TXL and SXF at BER (or BBI?) will have any meaningful impact on transforming Berlin into a hub or long-haul airport.

The entry of AB into oneworld and code-sharing with AA have more potential to increase traffic and connecting traffic for AB; however AB has a strategic decision to make about whether to hub at DUS or BER. To date, DUS hosts the majority of AB’s long-haul traffic. DUS is a greater business center and generator of premium traffic and cargo. So in addition to deciding on DUS vs. BER, AB also needs to decide how much to focus on premium and business traffic. History seems to show that long haul flights are more viable and financially successful if they carry a mix of premium and economy traffic and cargo – that would lead toward AB promoting DUS as its primary hub.

BER can probably support JFK and LAX service since those are both large population areas, interesting destinations for German Berlin-originating travelers, and have connection options on AA as code share partner. But I don’t see that transforming BER into a hub nor attracting a lot of long-haul service.

Germany already has 3 hubs, albeit two are LH hubs: FRA is undisputed #1, and they have just opened a fourth runway and are adding more and more gates. MUC is #2 and is also proposing a new runway and building more gates. That leaves DUS and BER. AB isn’t big enough for two hubs.

While Berlin has a large population and is an interesting tourist destination as well as government center, it is missing significant banking and financial services, and is much less of a business center. Its population is also less affluent than the other three hubs. So it generates mainly economy traffic.

So long as FRA and MUC have plenty of capacity, I see BER operating primarily as a spoke (O/D) with selected long-haul service (e.g. LAX & JFK for oneworld, and maybe one spoke each for DL & UA.) I certainly can see Emirates and perhaps Etihad or Qatar attempt to make it a spoke to feed their networks, but that’s probably it on long haul.

(Please delete if this becomes a duplicate – I tried once before but my comment didn’t seem to make it.)

Reply