Heathrow Boosts Top Hub Status as Rivals Feel Istanbul Heat

London’s Heathrow airport extended its lead as Europe’s busiest hub last year after welcoming larger aircraft, as Paris, Frankfurt and Amsterdam saw their positions challenged by rapid growth at Istanbul Ataturk.

Heathrow drew 72.3 million passengers in 2013, a 3.4 percent jump that outstripped both the 0.7 percent gain at Paris Charles de Gaulle to 62 million and third-ranked Frankfurt’s 0.9 percent advance to 58 million. Istanbul reaped a 14 percent surge to 51.3 million, taking it past Madrid and almost level with Amsterdam Schiphol, with a growth rate that puts it within reach of supplanting the German hub by this time next year.

Istanbul, like hubs in the Persian Gulf, is winning an increasing share of the intercontinental transfer traffic that’s been a mainstay of flights at West European airports. While London’s appeal as an end destination and an inflow of jets like the Airbus A380 helped Heathrow overcome the limitations of only two landing strips, Paris and Frankfurt suffered slowing growth for a third year amid restrictive night-flight times and taxes.

“Heathrow is an origin and destination market,” said Donal O’Neill, an analyst at Goodbody Stockbrokers in Dublin. With economies strengthening, cities like London, Paris and Rome become more attractive as an end point, he said, while traffic dominates in Frankfurt, which though Germany’s banking center is a much smaller city.

Photographer: Paul Thomas/Bloomberg

Passengers stand with their luggage as they queue at Emirates check-in desks inside Terminal 3 of Heathrow Airport in London. Close

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Movements Down

Aircraft movements fell 3.9 percent to 472,206 at Air France (AF)’s chief base, Aeroports de Paris said yesterday. Frankfurt, home to Deutsche Lufthansa AG (LHA), had 472,692 flights, a 2 percent decline, Fraport AG said the same day.

While both hubs had more flights than crowded Heathrow, the U.K. base turned the tables on its continental rivals in 2013 after its growth trailed Frankfurt and Paris in 2012. That year, Heathrow’s passenger tally rose 0.9 percent, versus a gain of 1.1 percent at Charles de Gaulle and 1.9 percent at Frankfurt.

“German airports are lagging behind other European countries, despite Germany’s economy clearly growing stronger,” said Fraport Chief Executive Officer Stefan Schulte. “Something is clearly wrong.”

The number of flights to and from Heathrow fell 0.4 percent year-on-year to 469,552 in 2013, it said Jan. 13. The average number of passengers per jet gained 3.7 percent to 154.8 as British Airways, the hub’s top user, introduced its first A380 services, adding to superjumbo operations by carriers including Dubai-based Emirates and Qantas Airways Ltd. (QAN) of Australia.

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A United Continental Holdings Inc. aircraft, bottom, approaches the southern runway before take-off at London Heathrow Airport in this aerial photograph taken on a tilt-shift lens in London.

Slot Squeeze

After operating close to capacity since the start of the decade, Heathrow is angling to add a third runway by 2025. Carriers are making the most of limited slots by boosting the average size of jets, making it the world’s third-busiest A380 airport last year, up from fourth in 2012, Airbus Group (AIR) said.

Dubai is the busiest A380 hub, with Emirates far and away the biggest customer for the double-decker. Singapore -- where Singapore Airlines Ltd. is the no. 2 superjumbo carrier -- ranks second, with Frankfurt displaced to fourth.

A decision on adding a new runway at Heathrow hinges largely on whether future demand is hub-focused or point-to-point, Howard Davies, who chairs the state-appointed Airports Commission on capacity in southeast England, said today. The latter market could alternatively be served by a second strip at London Gatwick, which lured 35.4 million passengers in 2013.

ADP Turkey Hedge

The commission’s deliberations are too narrowly focused on aviation issues rather than the welfare of Londoners, Daniel Moylan, an adviser to London Mayor Boris Johnson, said at the Runways U.K. conference where Davies also spoke. Johnson favors a new airport in the Thames estuary or the expansion of the Stansted low-cost hub in order to reduce noise over urban areas.

Amsterdam Schiphol, Europe’s No. 4 airport, posted a record passenger increase of 3 percent, with the 2013 total of 52.5 million just outstripping Istanbul Ataturk, whose owner is part-controlled by the parent of Charles de Gaulle. Movements at the KLM home base were also higher, up 0.5 percent to 426,000.

Traffic in Turkey was spurred by additional flights at Turk Hava Yollari AO (THYAO), or Turkish Airlines, which is emulating Emirates and other Gulf carriers in building its base into a global transfer hub. Following a 20 percent traffic increase in 2012, this year’s gains bumped Istanbul Ataturk into fifth place among its peers, while Madrid’s Barajas slid into sixth.

“We’ll probably reach our 2020 target of 100 million passengers long before,” said Mustafa Sani Sener, chief executive officer of airport operator TAV Havalimanlari Holding AS (TAVHL), referring to a traffic target for all of the company’s terminals, which attracted 84 million people in 2013.

Seeking to tap the rapid expansion of eastern airports and provide a hedge against slower growth at its existing assets, ADP bought a 38 percent stake in TAV for $874 million in 2012.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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