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Business

Berlin is The No-Frills Capital

In the no-frills airlines wave that has swept Europe in recent years, no airports outside the U.K. boast more low-cost flight passengers than Berlin's three. But the future is not looking as bright.

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Germanwings' new plane debuts at Berlin Schönefeld

On the tarmac of Schönefeld Airport, in the south of the city, it's almost impossible to pick out an airplane not colored in either the dark blue of Ryanair, the magenta of Germanwings or Easyjet's garish orange.

The three low-cost airlines are one of the major reasons Schönefeld currently finds itself expanding from the smaller regional airport it once was to a serious hub. On June 4, Germanwings announced the Berlin airport was joining Stuttgart and Cologne/Bonn as one of its main hubs. A little over a month later, airport officials broke ground on a new 12 million euro ($14.4 million) terminal that aims to accommodate a passenger count that is already at 2.16 million for the first half of this year.

The news is good for Berlin city officials, who have been waging a legal battle to expand the airport to become Berlin's main hub by 2010.

Flughafen Schönefeld

Schönefeld should be Berlin's biggest airport by 2010, when it will be re-named Berlin Brandenburg International.


"We can justify the expansion with the increasing passenger count," Berlin Mayor Klaus Wowereit said at the groundbreaking.

Berlin number one in continental Europe

Not just Schönefeld, but the city's Tegel Airport - where most major airlines land - and the storied Tempelhof are attracting low-cost passengers at a record count. Of the 7.9 million passengers that passed through the three, 3.5 million were customers of low-cost airlines, said the FBS, the company responsibility for all three airports. Though the U.K. and Ireland, birthplace of airlines like Easyjet and Ryanair, remains the undisputed leaders in the low-cost rankings, Berlin is catching up.


"Berlin is the most important and biggest low-cost market in all of continental Europe," said FBS chief Dieter Johannsen-Roth.

German no-frills airlines like Air Berlin and Germanwings have been steadily building passenger lists over the past few years. This year Air Berlin, Ryanair and Easyjet alone ordered a total of 300 airplanes until 2012. National European airlines, by comparison, ordered only 30 machines, according to a study by corporate consultants McKinsey.

Germanwings

Germanwings is Germany's leading low-cost airline

Long-term doubts for no-frills carriers

The good vibes and inflated expectations of the no-frills market, however, are not likely to last. Over the long term, only two or three airlines will be able to survive on the European market, according to the McKinsey study, and only if they cut costs or manage to distinguish themselves from other airlines.

"The days in which low-cost airlines expanded largely unrivalled through market stimulation, are over," wrote Lucio Pompeo, the author of the study.

Charter and national airlines have already begun ratcheting down their prices, forcing low-cost carriers to switch to traditional routes filled with more competitors. At airports in Cologne, Brussels and Dublin, some routes have already been cancelled.

But the mood at Schönefeld remains high. Germanwings chief Joachim Klein said he expects the airline to attract 1 million passengers to the airport this year. In 2006, the number should be 2 million.

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