Flying Sky-high: Budapest Airport Feature

September 12, 2018 by in Transport

Budapest Ferenc Liszt International Airport consists of two terminals and is in charge of managing, operating and developing the main international airport of Hungary. In 2017, a record, 13 million passengers passed through the airport, making it one of Europe’s fastest growing major airports. By the end of 2017, Budapest Airport offered more than 850 direct weekly flights to 125 destinations across 45 countries on 44 carriers. Over the past five years, the airport has generated a 34% increase in destinations in relation to its route network map, and this figure is on the rise. It has been awarded the Skytrax title for “Best Airport in the region” for four consecutive years in a row and has also received recognition by the minister of the national economy for its development and creation of jobs. With much promise, Budapest International is expecting some sky-high growth.

Due to increased use, expansion opportunities are taking shape at Budapest Airport. For example, the airport invested over 325 million EUR between 2007 – 2015 in a substantial upgrade program. This led to the creation of Skycourt- a new passenger terminal constructed between Terminal 2A and 2B. Skycourt is said to change a passenger’s experience of flying from Budapest airport with its new gigantic windows, modern architectural solutions, and a breath-taking view turning the time spent at the airport into a unique experience. The new refurbishment features shops packed with Hungarian brands, global brands, and a wide selection of restaurants, bars, and cafés. Skycourt passenger terminal is already winning awards for its design, efficiency and passenger experience, and now, passenger ratings are improving with new airlines (entering the market from 2014 onwards.)

It is not just the airport that is transforming; further projects have enhanced the railway line between the multi-modal airport hub Budapest-Arad and the multi-modal airport hub. After receiving a grant of €14,841,000 from the European Union’s Connecting Europe Facility (CEF), the large infrastructure project provided an extension and upgrade for the main railway line. Now, the line passes the airport territory to the freight handling areas, connecting the railway to all traffic modes on the airport territory. This encourages local growth a shift cargo traffic from road to rail which will then decrease the amount of traffic on the roads and will have a positive environmental impact. Altogether, the project upgraded and extended the existing rail tracks linking Budapest Airport to the main line. Developers built a rail cargo yard with a handling capacity of 148 TEU per day and a storage capacity of 480 TEU, with a kerosene unloading station for rail cars and road tankers. In addition, developers rebuilt the service road network which links the logistic areas with the public roads and the airport terminals. This involved the construction of separate lanes, such as bike lanes and pedestrian routes, and integrated two roundabouts for easier access between the airport and public roads.

Budapest Airport has developed substantially since its fledgling days in 1938. The airport, previously intended for joint civil-military-sporting purposes, was initially designed for an area between three settlements: Pestszentlőrinc, Rákoshegy and Vecsés. At the end of World War II, the half-built airport was severely damaged and was reconstructed between 1947 and 1950. After its opening in 1950, passengers passing through the airport began to increase, rising from from 49,955 to 359,338 by 1960. By 1974, passenger traffic reached one million, which created a demand for several new projects. In 1977, construction started on a new control tower and a second runway of 3707 meters, parallel to the first.

Additionally, a technical base was built for maintaining Malév’s aircraft. As numbers climbed, the number of landings and passengers reached 32,642 and 1,780,000 by 1980: this encourages developers to consider a new terminal. In 1983, the foundations of the new terminal were established. Terminal 2, a facility with an area of 24 000 square meters, built from Austrian loans under general contracting, served passengers as of 1 November 1985. Between 1998 and 2005, traffic at the airport doubled from 3.9 million to 7.9 million. The Hungarian state, who once owned the airport, decided on partial privatisation. This served as a move towards the ‘international experience’: it hoped to gain support from strategic private strategic partners to develop new transport connections, car parking and shopping facilities. Between 2007 and 2011, the airport constructed its long-term development plan as well as the Skycourt project. Developments included the new central hall at Terminal 2, of which commenced in 2009, and was inaugurated in March 2011. The new 28 000-square-meter building is integrally linked to the two older buildings, Terminals 2A and 2B. The Skycourt was designed to enhance passenger traffic capacities as well as retail, food and beverage outlets through the necessary expansion of terminal 2. The complete development program cost 261 million euros (approximately 75 billion HUF) and the funds were mostly covered by Budapest Airport’s “BUD Future” program. The airport invested 215 million euros, i.e. 82% of the program, into airport development by February 2011. Unfortunately, on 3 February 2012, the airport suffered the “grounding of the Malév”, a date which went down in the history of Hungarian aviation as “Black Friday”, after the national carrier was grounded at 6:00 a.m. The airport operator was forced to suspend numerous developments, including the Cargo City project, and had to implement a mass redundancy affecting 180 employees as a result of needing to drastically cut costs. This also led to the closure of Terminal 1 on 31 May 2012. The bankruptcy of Malév disrupted the airport’s rapid development as Budapest Airport had unpaid invoices of 4.2 billion HUF towards Malév on the day of the latter’s grounding. In spite of this, the International Airport has gained solid, sustainable revenue in recent years.

Current shareholders of Budapest Ferenc Liszt International airport are AviAlliance (55.44%), Malton (a subsidiary of GIC) (23.33%), Caisse de dépôt et placement du Québec (21.23%). The airport was originally owed by the Hungarian state and had a public ownership but on January 2002, the Aviation and Airport Directorate was abolished and replaced by two new organizations. HungaroControl then became responsible for air traffic control and Budapest Airport Zrt. for airport operation. There were challenges at this time due to doubling passenger traffic, resulting in the need for further development. The then sole-owner of the airport decided to partially privatise Budapest Airport to promote positive change. In June 2005, the State’s privatisation agency initiated a tender for concession rights and 75 percent minus one vote of Budapest Airport Zrt.’s shares were acquired by new private owners. When the tender was finalised, the British company BAA took over airport management. Although it only took a year and a half until there were new owners as BAA decided to sell its stake to the German company HOCHTIEF AirPort and three financial partners.

Budapest Airport is always finding ways to improve and to make passenger experience the best it can be. 2018 promises another year of strong growth as they aim to offer one million more seats for passengers traveling. The International Airport has announced that it will add eight more routes and has added another carrier to its roll-call when American Airlines makes a welcome return. Whilst resuming ties with the US from May, the oneworld member will operate a daily seasonal service to Philadelphia, joining LOT Polish Airlines’ long-desired new links to New York JFK and Chicago O’Hare. Easyjet began route launches this year with a daily service to Berlin Tegel, while home-based Wizz Air will further increase Budapest’s route network during S18 timetable with three new connections; Stavanger, Athens and Santander. Ryanair intends to double the airport’s operations to Cyprus following the start of the summer season: a time when the low-cost carrier can commence its three times weekly service to Paphos. Budapest’s goals for the future are to make Ferenc Liszt International Airport the most successful airport in Central and Eastern Europe in terms of passenger growth, service quality and operational efficiency. The government truly believe that the airport is the key driver of local economic growth for Budapest, and for Hungary as a whole. Budapest International has also set itself the goal to operate efficiently and profitably on a sustainable basis. Finally, the airport company aims to strengthen its already strong global position in the private airport market and to identify further opportunities. With the help of active and fast business growth, the motivated management team will strengthen the position of the airport in the face of growing competition.