Coping With Covid-19 in Berlin
The drastic impacts of the Covid-19 pandemic on global air traffic has not only affected airlines - the obvious initial victims of it - but also airports. Many airports around the world have used to downturn in passenger numbers to refurbish and re-work terminal facilities and some have new terminal construction underway. Most of these were committed to prior to the outbreak of Covid-19 and thus had to proceed - some will not be used for a while yet however.
Lufthansa are one of two major users at Berlin, easyJet being the other
In Berlin, with a new airport finally open, the effects of the air travel downturn have been more dramatic. The 2021 business plan was discussed by the Supervisory Board on Monday, 25th January 2021. The strategy conference, originally scheduled over two days, was shortened to one day due to the current coronavirus situation and took place as a video conference.
The Executive Board reported to the Supervisory Board that passenger traffic remains at its lowest level because of the global pandemic. On average, around 7,500 passengers were handled daily at Berlin Brandenburg Willy Brandt Airport in the first weeks of January, which is only around ten percent of the previous year’s level.
Like all other German airports, the airport company generally expects air traffic to recover only slowly. According to their estimates, only just under a third of the volume in 2019 can be achieved this year with 10.7 million passengers. Many airlines have significantly reduced their fleets, cut jobs and are repositioning themselves on the market.
Gunter Wicker / BBF
Travel restrictions generally lead to considerable planning uncertainty in the entire aviation industry. The result is that medium and longer-term development can currently only be roughly estimated. For this reason, the airport company’s Executive Board presented the Supervisory Board with three possible scenarios for when the pre-crisis level of 35.6 million in 2019 can be achieved again.
In the best case, this would be possible in 2023; the worst case would be in 2027. The development crucially depends on when the vaccines are globally and extensively available, when quarantine regulations are relaxed or lifted, and how quickly the economy recovers.
As the Executive Board informed the Supervisory Board, it is considering a middle scenario as the basis for the business plan. According to this, reaching the pre-coronavirus level in 2025 is realistic. Passenger growth could then return to one to two percent annually. If this projection is correct, a total of around 83 million fewer passengers would fly from BER between 2021 and 2025 than originally expected. This also involves considerable economic losses.
The Executive Board also gave the Supervisory Board a detailed report on planned savings over the next few years. Among other things, this includes delaying investments for the structural expansion of BER, strict expenditure control and reorganising the personnel structure. Special projects, such as the temporary decommissioning of Terminal 5 or suspending the use of the southern runway, also make significant contributions to reducing costs.
However, the planned savings will not be enough to compensate for the coronavirus-related loss of turnover. Consequently, Flughafen Berlin Brandenburg GmbH is reliant on the renewed support of its shareholders and partial debt relief to maintain its capital market viability.
Gunter Wicker / BBF
Rainer Bretschneider, Chairman of the Supervisory Board of Flughafen Berlin Brandenburg GmbH said: “We are satisfied with operations at Berlin Brandenburg Willy Brandt Airport so far. Processes are running steadily and coming together, not considering the usual teething problems that come with a major construction project. Unfortunately, the economic situation of the airports in Germany is still very critical because of the pandemic and a recovery is still a long way off. That is why we are now focusing on the finances after the commissioning and, in doing so, on the economic activities of the company.”
Engelbert Lütke Daldrup, Chief Executive Officer of Flughafen Berlin Brandenburg GmbH added: “Travel restrictions will only be eased or lifted when a vaccine against the coronavirus is globally and extensively available. Therefore, the airport company only expects air traffic to recover to pre-crisis levels in 2025. As a company, we will make every effort to work as cost-effectively as possible until then. We will have to cope with painful cuts as a result. We will continue to rely on the support of our shareholders until we have reached pre-coronavirus levels.”
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