Cologne Bonn Airport: Taking stock for the first time in a turbulent year

posted on 22nd June 2020 by Eddie Saunders
Cologne Bonn Airport: Taking stock for the first time in a turbulent year

We are now halfway through the current business year – and Cologne Bonn Airport is taking stock for the first time in these highly unusual circumstances. The Airport actually had quite different plans for 2020. The financial basis of the company was to be strengthened with the help of a company-wide programme to improve results which had already been launched in 2019. At the beginning of the year, there was evidence of significant success in this area – but then the coronavirus struck.

“2020 should have been a good year for the Airport. Instead we have been faced with passenger transport being brought to almost a complete standstill, abandoned terminals, deserted car parks and empty display boards,” says Johan Vanneste, CEO of Flughafen Köln/Bonn GmbH.

During this worldwide crisis, the like of which has never been seen before, freight business proved to be the Airport’s life insurance – carrying on at full capacity. This can also be seen in the statistics: according to Eurocontrol, Cologne/Bonn was one of Europe’s top 10 airports during the coronavirus crisis in terms of the number of flights handled.

Life is now slowly coming back to the terminals. “After almost four months of this exceptional situation, we are now looking ahead to the near future with cautious optimism. This week we started the gradual resumption of passenger transport. People will once again be able to fly to a wide range of sunshine destinations from Cologne/Bonn this summer and a good number of business routes will also be operating,” says Vanneste. Time to take stock for the first time in the ongoing coronavirus crisis:

The 2019 business year was difficult, but 2020 started off well.

2019 had already been a difficult year for the Airport. The withdrawal of the Eurowings long-haul routes and the departure of Condor and Norwegian led to a fall in passenger numbers. By the end of the year 12.4 million passengers (-5%) had used the Airport. Figures were on the decline in the freight business too – 815,000 tonnes of goods were handled in Cologne/Bonn during the course of the year. One of the reasons for the downturn was a difficult economic situation worldwide.

The Airport finished the business year with losses of EUR 19.3 million.  Sales revenues amounted to EUR 341.2 million (2018: EUR 333.9 million); the EBITDA stood at EUR 41.0 million. The reason for the hefty losses lay in considerable additional costs. These included EUR 10 million solely for a structural reduction in personnel costs by means of programmes for semi-retirement and early retirement. In 2019 the course was set for an upwards trend in economic terms – an extensive programme to improve results was launched to secure the long-term economic future of the Airport. In addition to this, there were reductions in auditing costs, consulting fees and travel costs, and rents and fees were increased.

Things continued to go well – 2020 got off to a good start in business terms; the figures for both freight volume and passenger numbers were good. Cost savings and an increase in turnover resulted in the Airport being in a better position than forecast in January and February, to the tune of EUR 4 million.

“In the last financial year, we did everything we could to bring the company back on course in economic terms. This was painful and uncomfortable in some areas. Yet it was becoming clear that we were on the right path; our efforts were working. This is something that should help to put us in an optimistic frame of mind and motivate us to continue on this path after the coronavirus crisis”, says Torsten Schrank, Managing Director of Flughafen Köln/Bonn GmbH.

And then came COVID-19…

Sadly these positive developments came to an abrupt halt – at the end of February the coronavirus crisis hit the Airport with full force. Although more and more comprehensive measures were introduced at the Airport in an effort to minimise the risk of infection for both passengers and employees, passenger operations came to almost a complete standstill from mid-March onwards. During the months of April and May, which were the most seriously affected by the coronavirus crisis, only 11,000 passengers travelled via Cologne/Bonn. During the same period in the previous year, this figure was 2.1 million. However, while passenger operations were pretty much at a standstill, the relevance of the Airport’s second mainstay became evident – freight business in Cologne/Bonn ran at full capacity right through the crisis.

9,700 cargo flights, with a total tonnage of around 240,000 tonnes, have been handled at the Airport since the beginning of the crisis. At times the number of flights per week was more than 15 percent up on the figures for last year – and at the same time significantly higher than in other German freight airports. These flights were operated by 26 airlines, including quite a few who don’t normally fly to the Airport. For example, Cargolux and Emirates both included Cologne/Bonn in their flight schedules at times. A large part of the cargo carried during this period constituted medical goods, personal protective equipment (masks, gloves, etc.) and fresh food (fruit, vegetables, fish). “In the past few weeks, our Airport has demonstrated that it is hugely important as an indispensable European hub and as a direct supplier for the region,” says Johan Vanneste.

Cautious optimism looking ahead to the 2020 summer holiday season

With the relaxation of travel restrictions on 15 June, many airlines are now starting to gradually reintroduce more and more routes into their flight schedules. They are now offering their first sunshine destinations – Spain, Croatia, Bulgaria, Portugal and Greece – as well as domestic flights to Berlin, Hamburg and Munich. The restart will initially be restrained – currently there are only around 250 take-offs and landings a week, but, according to a cautious prognosis, operations are set to be ramped up significantly by the time the summer holidays start at the beginning of July. During the school holidays, it should be possible to operate up to 150 flights per day. The flight programme will get bigger too – during the holiday season we will once again be offering flights to destinations such as Turkey, Spain, Greece, Italy, Egypt and Portugal, as well as Croatia and Bulgaria. As before, the situation is very dynamic and dependent on entry restrictions.

At the start of the summer holidays, we will also be reopening the retail stores in Terminal 1.

Economic impact of the coronavirus

The buzzing freight business and our cautiously optimistic outlook for the summer will, however, not be enough to get the Airport through the coronavirus crisis. Various different measures were and are necessary to at least cushion us from the adverse economic effects of the crisis – for example, the Airport introduced short-time working for a large part of the workforce at the beginning of April. Other measures have included a ban on hiring new staff and on expenditure. Through these measures, the Airport is hoping to achieve savings of around EUR 50 million. According to current forecasts, the company is anticipating a coronavirus-related loss of revenues of more than EUR 100 million by the end of the year.

With regard to the Airport’s economic situation, management are intending to develop an “employment package” in close collaboration with the works council and the parties involved in the negotiation of collective wage agreements. “Our goal is to maintain our employees’ jobs, even in these exceptional economic circumstances, and to avoid any operations-related redundancies. We all need to stick together to overcome this crisis,” says Johan Vanneste.

Hotel to be completed in 2021, Cologne/Bonn wins awards at Skytrax

Despite COVID-19, Cologne/Bonn is working on the future – the construction works for the new Moxy Hotel right next to the terminal are making good progress. The shell construction is almost complete; the next phase of the programme will involve the façade and interior fittings. The hotel should be up and running by the second quarter of 2021.

In the midst of the crisis, Cologne/Bonn also had some good news – in the results for this year’s “Skytrax World Airport Awards” Cologne/Bonn Airport achieved 2nd place in the category “Best Regional Airport Europe”. In the worldwide comparison of regional airports, Cologne/Bonn won 3rd place.