Can the Mediterranean’s airports match their record-breaking 2017, particularly since the demise of some major airlines from key inbound markets.
During the first few months of this year, many of the Mediterranean’s largest airports have been unveiling record-breaking passenger numbers for 2017.
From Palma in Majorca in the western Med to Cyprus in the east, and most points in between, airports have seen their previous passenger-number records tumble. Even Turkey’s key gateways have seen a healthy recovery in 2017 after a couple of years of decline due to geopolitical strife both inside the country and in neighbouring countries, most notably Syria.
But the seemingly serene progress of airports towards ever-growing passenger numbers in 2017 was not reflected in the airline industry, where intense competition saw the demise of two major carriers to the region: the UK’s Monarch Airlines, which collapsed in October, and Germany’s Air Berlin, which went into administration in August and finally stopped flying in October.
Then there are the continuing woes of Italy’s flag carrier Alitalia, also currently in administration after minority shareholder Etihad pulled the plug on further funding in May 2017. The airline’s administrators are still searching for a potential buyer for the SkyTeam member. Alitalia is at least carrying on – for now – with its flight schedule.
The region’s airports probably don’t need to worry too much about the impact on passenger numbers – Lufthansa and easyJet have snapped up most of Air Berlin’s assets with the latter setting up a base at Berlin Tegel, including routes to many of the Med’s major gateways such as Alicante, Majorca, Corfu, Naples, Sicily, Sardinia and Cyprus.
Similarly Monarch’s slots at Gatwick have been acquired by British Airways’ parent company IAG, and Hungarian low‑cost operator Wizz Air has done the same at Luton. Ryanair is also expected to be its opportunistic self when looking at adding new routes to the Mediterranean.
If there is any impact this year from Monarch’s disappearance, it may be most keenly felt in the key western med destinations of Spain and Portugal. The vast majority of Monarch’s seat capacity (74%) was to these two destinations, followed by Italy (6%) and Gibraltar (4%).
The disappearance of Monarch and Air Berlin came after the key summer season in the Med so did not affect airports so much during 2017. Palma, for example, saw traffic grow by 6.5% to reach a record of just under 28 million passengers, while Barcelona’s El Prat catered for 47.3 million passengers last year, up by 7% on 2016.
There were even higher year-on-year increases at other Mediterranean airports in Spain including Malaga-Costa del Sol by 11.7% and Alicante-Elche by 11.1%, while the Balearic islands gateways of Ibiza and Menorca enjoyed growth of 6.6% and 8.1% respectively.
How long Spain’s airports can continue this level of passenger growth is open for debate, but if you listen to Europe’s largest tour operators, Tui and Thomas Cook, there seems to be a shift by holidaymakers away from the Western Med, particularly in favour of Turkey.
This appears to be mainly due to the increase in hotel prices in Spain over the past couple of years – exacerbated in the UK market by the slump in the value of the pound against the euro since the Brexit referendum vote in June 2016.
Peter Fankhauser, Thomas Cook’s CEO, says: “We continue to see significant margin pressure in holidays to Spain, our largest destination, due to higher hotel cost inflation and increased flight capacity. We continue to take actions to help mitigate this, by rebalancing our programme towards higher-margin destinations such as Turkey and Egypt.”
Despite these concerns about the Spanish market, Thomas Cook has just set up a new Palma-based airline, Thomas Cook Airlines Balearics, which will operate five aircraft from Majorca, and is part of a broader plan to increase capacity by 10% for summer 2018 “to meet increased customer demand in its key markets of Germany and the UK”.
One Mediterranean airport to suffer an immediate impact from Monarch’s collapse was Gibraltar, which saw its traffic slump by around 30% in the final three months of 2017, although it still managed to increase traffic by 4.2% for the year. Following Monarch’s demise, British Airways is adding a Gatwick-Gibraltar route from May 28, while easyJet is also increasing capacity.
On the other hand, a success story in the western Med has been Malta, where the international airport enjoyed its fastest level of passenger growth in 2017 with traffic surging by 17.5% to just over six million passengers as seat capacity went up by 18%. This momentum should continue this year as Malta’s profile is boosted by its capital Valletta being a European Capital of Culture for 2018 – passenger numbers are forecast to rise further by 7-9% at the airport.
Alex Cardona, head of traffic development and customer services at Malta International, says the airport has also benefited from P&O Cruises basing a ship in the destination from April 2017 creating a fly-cruise operation for the first time.
“Our eyes are set on harnessing the full potential of the Scandinavian market, which is our largest source of indirect traffic, enhancing our connections with the eastern European market through increased flight frequencies and new routes within this region, and developing the Russian market, which is still largely under-served,” adds Cardona.
Elsewhere in the western Med, Sardinia’s two airports have continued to prosper. Cagliari Elmas airport was another to set a record for passengers in 2017 with numbers up by 12.6% to 4.1 million, including a 38% rise in international traffic. There was also double-digit growth at Sardinia’s other airport, Olbia Costa Smeralda, where passenger numbers exceeded 2.8 million, helped by new winter 2017-18 routes from Transavia departing Amsterdam, Vueling out of Barcelona and easyJet from Gatwick.
Olbia Costa Smeralda is also home to Meridiana, which has just rebranded as Air Italy and has major expansion plans that will see its fleet grow from 11 to 50 aircraft by 2022. The airline’s ambitious plans are backed by minority shareholder Qatar Airways, which has a 49% stake in the Italian carrier.
Marco Rigotti, chairman of Meridiana’s majority shareholder Alisarda, says: “Air Italy aims to be a leader in the global industry, thanks to the airline’s hub in Milan Malpensa, and the reinforced base of Rome Fiumicino, alongside the seasonal network from Olbia’s Costa Smeralda heritage base.”
France could be a destination to watch this year, with Ryanair expressing interest in expanding its operations in the country – partly due to the policies of new French president Emmanuel Macron.
Ryanair chief marketing officer Kenny Jacobs says France is being “opened up for business by the new regime”, which could create opportunities.
“We have met with airports in regional France who tell us more competition would be good,” he adds. “There are lots of regional French airports that are hungry for growth. They have not had growth from Air France. They have had growth from easyJet but that may be maxed out now.”
Both of France’s major Med gateways – Nice Cote D’Azur and Marseille Province airports – enjoyed a successful 2017. Nice Côte D’Azur, France’s third busiest airport, recorded a 7.1% rise in passenger numbers to 13.3 million, while Marseille Provence passed nine million passengers for the first time, helped by new routes from Ryanair, easyJet and Volotea.
Visitor figures and passenger numbers have shown how much tourism slumped to Turkey in 2016 as the destination suffered bad publicity from an attempted coup and a succession of terror attacks.
The country’s main Med gateway, Antalya, saw international traffic drop by 48% in 2016, although it staged a recovery last year with international passengers rising by 58% to 18.5 million (although still well below the record of 22.1 million in 2014).
A reported resurgence in demand for package holidays shows Turkey continues on the road to recovery.
Fritz Joussen, CEO of Tui, Europe’s largest tour operator, says: “Turkey is back – we’re seeing a return to Turkey. But we’re still in the volume-building phase and it takes time to build that back up. Turkey bookings are now very strong.”
Joussen adds that demand is also increasing for other eastern Mediterranean beach destinations, including Greece, Cyprus and Croatia.
This shift in demand across the Mediterranean has also been noted by Thomas Cook. CEO Peter Fankhauser says: “We’ve taken early action to meet strong demand for destinations in the eastern Mediterranean. This has enabled us to shift capacity out of the Spanish islands where we have seen a continuation of the margin pressures we experienced last summer, particularly for the UK market.”
The increasing popularity of the eastern Med was also illustrated by Cyprus’s two airports, Larnaca and Paphos (both operated by Hermes Airports), collectively passing 10 million passengers in 2017, no doubt helped by Paphos being a European City of Culture during the year.
But it’s not just about passenger numbers for Hermes Airports CEO Eleni Kaloyirou: “We are particularly interested in quality and it is precisely for this reason that alongside our efforts to increase the passenger traffic we have also undertaken specific initiatives, have invested substantial amounts and have given special emphasis to efforts to improve our services.”
Cyprus has also been boosted by the emergence of start-up airline Cobalt Air, which has continued its expansion from its Larnaca base by adding a new direct route to the key European hub of Heathrow as well as unveiling a new business class cabin. The new route means Cobalt now serves three London airports with flights to Gatwick and Stansted already established.
Cobalt CEO Andrew Madar says: “We are delighted to add Heathrow to our UK network which is a key market for Cyprus tourism and business. Cobalt Air is the only carrier flying from the main three London airports to Cyprus.”
So despite the demise of two major European airlines since the last summer season, the Mediterranean’s enduring appeal for holidaymakers should keep the region’s airports busy during 2018, although there are signs of a rebalancing of demand from the west to the east, particularly back in Turkey’s favour. £
Palma de Mallorca Airport is to undergo a €297 million upgrade including the expansion of the terminal, improvements to the luggage-handling system, enhancing security procedures, adding more shops and the renovation of one of its
Malta International Airport is expected to finish a €12 million project to reconfigure the terminal by summer 2018. This has included a new VIP lounge, larger security area, more check-in desks and an upgraded baggage handling system. Another €8.8 million will be spent on further terminal and airfield improvements.
Marseille Provence Airport will focus its expansion plans in 2018 on extending and renovating Terminal 2, which caters for low-cost carriers. This includes building two new aircraft stations and boarding lounges, plus a new baggage claim area. The €10 million project is due to be completed by the start of the summer 2018 season.
Istanbul’s new $11 billion airport is due to open in October 2018. The airport is planned to be the largest in the world with an initial annual passenger capacity of 90 million, which will eventually be increased to 150 million. The airport will replace the existing Ataturk airport in Istanbul.
Airports on some of the most popular Greek islands are set to undergo major upgrades under their new private operator.
Fraport Greece, which operates 14 airports around the country as part of a 40-year concession agreement with the Greek government, is to spend ¤400 million improving and expanding the airports by 2021.
Projects include building new terminals at airports in Thessaloniki, Corfu, Kefalonia, Kos and Lesbos during the first four years of the contract, which started in 2017, and to renovate runways, terminals and infrastructure at all 14 airports.
Overall, Fraport Greece is promising to increase the size of terminals across all airports by around 50%, including a 30% rise in departure gates from 103 to 147 and aircraft stands increasing from 115 to 150.
The other airports now run by Fraport Greece are: Preveza, Chania (Crete), Kavala, Mykonos, Rhodes, Samos, Santorini, Skiathos and Zakynthos.