Strong performance at Budapest Airport in spite of the Malév bankruptcy

Already on 3 February 2012, the day of the Malév grounding, Budapest Airport made huge efforts to fill the void left by the Hungarian national carrier. The objective was to minimize the negative impacts of the Malév bankruptcy on passengers and Hungarian tourism. The other airlines moved very quickly to fill the gaping hole in the market. Lufthansa launched flights to Hamburg and Berlin within 72 hours, Air Berlin’s first flight from the German capital also arrived within three days. Wizz Air and Ryanair announced the launch of more than forty new flights in total on the day of the Malév bankruptcy.

A large number of new airlines appeared in Budapest in 2012, including the Greek carrier Aegean Airlines, the French service provider Brit Air, the Dutch carrier Transavia, the Finnish airline Blue 1, the Russian operator Ural Airlines, the German carrier OLT Express, and Ryanair returned to the Hungarian capital with no less than 28 flights. Wizz Air announced the launch of ten new flights, and increased the number of aircraft stationed in Budapest from four to six. Many other airlines reacted to the situation by increasing the frequency of existing flights or their capacity by operating larger aircraft to Budapest. As a result, the utilization of flights, the so-called load factor, improved significantly, but the number of takeoffs and landings reduced by approximately 23 000.

There was a significant rearrangement in the airline market at Budapest Airport. The proportion of low cost carriers increased from 26 percent in 2011 to 52 percent last year, bringing with it corresponding changes in travel habits, and even a change in the face of tourism in Hungary. Flying as a means of transport became accessible to new layers of society, such as young people, university students and job seekers looking for opportunities in other countries. Based on feedback from hoteliers in Budapest, 5-star hotels complained of a considerable drop in business, whilst many motels, youth hostels and 3-star hotels reported a record number of guests last year.

Although Budapest Airport was forced to introduce a number of cost-cutting measures, such as the closure of Terminal 1 at the end of May 2012, the quality of passenger handling has not decreased. On the contrary, there has been a further increase in service levels. According to a confidential passenger survey conducted by the Airports Council International (ACI), the assessment of Budapest Airport by passengers improved further in 2012. It is especially noteworthy that the airport operator managed to make progress in a number of key areas directly related to passenger services. For example, passengers believe that security screening (politeness and helpfulness, thoroughness, waiting time, general sense of security) was better, and they continue to provide excellent feedback about value for money in airport restaurants and the product offer of airport shops.

Although Budapest Airport was forced to cancel planned investments of approximately 30 million EUR (8.7 billion HUF) in 2012 due to the Malév bankruptcy, the airport operator still exceeded its development commitments undertaken in the privatization contract. This was confirmed in an official letter by the Hungarian National Asset Management Company (MNV Zrt.) at the end of December 2012, emphasizing that Budapest Airport fulfilled all of its commitments.

“Budapest Airport could do even more to support Hungarian tourism and especially the city of Budapest,”emphasized Jost Lammers, the CEO Budapest Airport. “For many years now we have not managed to find a way out of the bureaucratic maze preventing the construction of an airport hotel at Terminal 2, even though it wouldn’t cost a single forint for the central budget, and would serve the interests of tourism. I am hopeful that we will soon be able to cut this Gordian knot with the new CEO of MNV Zrt.,” he added.

Last year Budapest Airport introduced a significant number of improvements to enhance service quality at the airport (e.g. the Fast Track lane to speed up security screening), enabling airlines to pick and choose in a modular manner what is best for their profile and passengers. With the introduction of pedestrian boarding and disembarkation at Terminal 2 (the so-called basic boarding gates), Budapest Airport managed to halve delays attributed to airport capacities. As a result, low cost carriers are able to keep to their schedules and can reduce the turnaround times of their aircraft. The accuracy of flights thus improved from 79 percent in 2011 to 82 percent last year.

“Budapest Airport continues its efforts to open new destinations from Budapest and to attract new carriers from all segments of aviation, like long haul, European legacy and low cost carriers, as well as charter operators,” said Kam Jandu, aviation director for Budapest Airport. He added: “It would be very important for the entire Hungarian tourism industry to create a substantial marketing fund in order to generate additional flights for Hungary, as air connections in most countries are a proven source of economic growth. The exclusive Routes Europe Conference attended by airline decision-makers is planned for May in Budapest, and it will help considerably for all stakeholders to have a common approach in advance of the conference to persuade new airlines to invest in Hungary ahead of competing countries in the region.”