Does (air) resistance exist everywhere?
How to take off at Groningen Airport Eelde
Author: Hans Worm
Student id.: 1275038
Date: 2nd of December 2005
Organisation: N.V. NOM – Investerings- en Ontwikkelingsmaatschappij voor Noord-Nederland
(Investment and Development Agency for the Northern Netherlands)
Paterswoldseweg 810
9700 AK Groningen
Supervisor NOM: Mr G. Lenstra
1st Supervisor University
of Groningen: Mr prof. dr. H.G. Sol
2nd Supervisor University
of Groningen: Mr dr. T.J.B.M Postma
International Business and Management
Rijksuniversiteit Groningen (University of Groningen) Faculteit Bedrijfskunde
(Faculty of Management and Organization) Landleven 5
9747 AD Groningen The Netherlands
Foreword
This master thesis is written as an assignment for the N.V. NOM (Investerings- en Ontwikkelingsmaatschappij voor Noord-Nederland or The Investment and Development Agency for the Northern Netherlands). This thesis also represents the final project before graduating from the International Business and Management master’s programme of the Faculty of Management and Organization, University of Groningen, The Netherlands.
Important in this research is the relationship between growth of an airport and growth of the surrounding economy. The motive for this research was that business related activities at and around Groningen Airport Eelde (GAE) develop rather slowly. The NOM, management of GAE, stakeholders, and other surrounding parties would like to stimulate the development of the airport and of business activities in order to give a positive impulse to the economy of the Northern Netherlands. Despite many efforts during the last decades, one has not really succeeded in achieving this goal. There are other regional airports though, where efforts have been successful. This master thesis focuses on these regional airports. The purpose of the analysis is to learn from developments at these airports, regarding the process of development as well as the content/results. This forms one of the bases on which GAE can formulate her chances for concrete and realistic development plans.
I would like to say that I have had a very pleasant time at the NOM and I would like to thank the NOM for giving me the opportunity and facilities for writing my master thesis in her organization, for the support, as well as the nice time. Besides the people of the NOM in general, I would like to thank a number of people specifically. First I would like to thank my supervisor at the NOM, Mr G. Lenstra, for his time and support during my stay at the NOM.
Secondly, I would like to thank all the people at the Department of Investment Promotion, Public Relations, and Information Management for the support and the good atmosphere.
Thirdly, Ms U. Kohse for her help during the initial phase of my research. I would also like to thank the people whom I interviewed for this thesis: Mr C. Stutterheim, Vice-President of Groningen Airport Eelde, Mr J. O’Connor, former director of Cork Airport, Ireland, and Mr E.L. Pedersen, Marketing Director of Billund Airport, Denmark. I would like to thank Ms S.
de Noord for her help during the final phase of writing this thesis. I would like to thank my first supervisor from the University of Groningen, Mr H.G. Sol, for all his time and comments during the entire period of writing my thesis. I would like to thank Mr T.J.B.M. Postma for his time and effort and for his preparedness to be my second supervisor. I would like to thank my parents and sister for their support and understanding during my studies. Finally, I would like to thank my friends for all their listening and for the many talks and discussions.
Hans Worm
Groningen, 2nd of December 2005
Summary
Development possibilities of an airport are somehow related to business activities surrounding the airport. A developing and growing airport can attract business activities and make establishment of businesses in the neighbourhood of the airport very attractive. In turn, increasing business activities will stimulate further development of the airport.
Despite many efforts during the last decades, business related activities at and around Groningen Airport Eelde (GAE) develop rather slowly. The Investment and Development Agency for the Northern Netherlands (NOM) and management of GAE would like to stimulate the development of GAE and subsequently, business activities in order to give a positive impulse to the economic development of the region. There are other regional airports where such efforts have been successful. In this master thesis, regional airports which have already made quite a considerable development are analyzed. Important is to get to know why some regional airports have shown considerable growth and why this has not been the case for GAE so far. Therefore, in this research I look at the growth process of airports. The extent to which the economic impact can occur, is determined by internal and external (f)actors. This thesis focuses on these internal and external (f)actors which have been important in making growth of airports (im)possible. By external (f)actors I mean passengers, competitors, political actors, regional-economic (f)actors, socio-cultural factors, and technological factors.
By internal (f)actors I mean: characteristics, strengths and weaknesses, and strategy.
The airports which GAE is compared to regarding above-mentioned internal and external (f)actors and which can be a benchmark for GAE are Cork Airport (Ireland) and Billund Airport (Denmark). These airports are somehow comparable to GAE, but are further developed regarding passenger numbers and volume of freight handled, and hence, are good airports for GAE to take as an example of future direction. An important finding of this research is that Cork Airport en Billund Airport suffered less from constraints and enjoyed more stimuli from the external (f)actors. GAE suffers from the relatively high influence of opposing local residents and does not have full support from municipalities and provinces.
Another important conclusion from this research is the importance of low-cost airlines. These turn out to be very important in making smaller airports fast growing ones. This results in an economic impulse to the surrounding region.
Based on the comparison between the three airports, an initiative to a process design is suggested to achieve the goal of development and growth of GAE. The reason is that the problem is very complex and involves many stakeholders. These stakeholders all have a different level of attractiveness and sense of urgency to participate in the process. Besides, many interests play a role. It is important to get to know the interests of all stakeholders, in order to serve as many interests as possible and avoid conflicts in the process of development and growth. By cooperating, more can be achieved for all stakeholders. An independent third party should fulfil the role as initiator of the process design.
A good process design will facilitate the implementation of the development alternatives and the recommendations for future growth of GAE, which are not to focus on freight at first, but to focus on passenger numbers instead. GAE should invest once heavily in a low-cost airline with help from local authorities or private parties immediately after the runway has been extended. GAE should start with a regular flight to Schiphol for business passengers and to London-Heathrow, directed at both tourists and business passengers. I recommend not increasing facilities and/or airport-bounded tenants before passenger growth has started. A Business Park near the airport can be developed though. Furthermore, it is important for GAE to get as much support from as many bodies as possible, and to try and let GAE become part of an integral strategic development plan for the Northern Netherlands. Finally, I recommend GAE to pay much attention to the right marketing, to acknowledge the importance of it, and that marketing is a profession, which is to be performed by a specialist.
Contents page
Chapter 1. Characteristics of the NOM 9
1.1 Introduction 9
1.2 Activities of the NOM 9
1.3 Three divisions of the NOM 10
Chapter 2. Problem indication, background, and research proposal 12
2.1 Introduction 12
2.2 Problem indication 12
2.3 Background 12
2.4 Research proposal 16
PART 1: INTRODUCTION
Chapter 3. Selection of comparable airports 25
3.1 Introduction 25
3.2 Method and argumentation 25
3.2.1 Marketing by airports 26
3.2.2 Relationship between low-cost airlines, growth of an airport, and
growth of the regional economy 27
3.3 Selection 30
PART 2: GAE
Chapter 4. Passengers of GAE 34
4.1 Introduction 34
4.2 The most relevant results 34
Chapter 5. Constraints and stimuli from the external environment of GAE 36
5.1 Introduction 36
5.2 Background 36
5.3 PEST analysis of GAE 37
5.3.1 Political actors 37
5.3.2 Regional-economic (f)actors 40
5.3.3 Socio-cultural actors 43
5.3.4 Technological factors 44
5.3.5 Influence of and between stakeholders 45 Chapter 6. Characteristics, strengths, weaknesses, and strategy of GAE 46
6.1 Introduction 46
6.2 Internal characteristics of GAE 46
6.2.1 Ownership pattern 46
6.2.2 Supply 46
6.2.3 Pricing 47
6.2.4 Freight 47
6.2.5 Technical facilities 47
6.2.6 Service level 48
6.2.7 Accessibility 49
6.2.8 Production environment 50
6.3 Strengths and weaknesses of GAE 50
6.3.1 Strengths 50
6.3.2 Weaknesses 50
6.4 Strategy - how does GAE want to realize growth? 51
6.4.1 Short-term goals 52
6.4.2 Long-term goals 52
PART 3: CORK AIRPORT AND BILLUND AIRPORT
Chapter 7. Passengers of Cork Airport and Billund Airport 54
7.1 Introduction 54
7.2 Passengers of Cork Airport 54
7.3 Passengers of Billund Airport 54
Chapter 8. Characteristics, strengths and weaknesses of Cork Airport
and Billund Airport 55
8.1 Introduction 55
8.2 Internal characteristics of Cork Airport 55
8.2.1 Ownership pattern 55
8.2.2 Supply 55
8.2.3 Pricing 56
8.2.4 Freight 56
8.2.5 Technical facilities 56
8.2.6 Service level 57
8.2.7 Accessibility 57
8.2.8 Production environment 58
8.3 Strengths and weaknesses of Cork Airport 59
8.3.1 Strengths 59
8.3.2 Weaknesses 59
8.4 Internal characteristics of Billund Airport 60
8.4.1 Ownership pattern 60
8.4.2 Supply 60
8.4.3 Pricing 61
8.4.4 Freight 61
8.4.5 Technical facilities 61
8.4.6 Service level 61
8.4.7 Accessibility 62
8.4.8 Production environment 63
8.5 Strengths and weaknesses of Billund Airport 63
8.5.1 Strengths 63
8.5.2 Weaknesses 64
Chapter 9. Strategy followed by Cork Airport and Billund Airport 65
9.1 Introduction 65
9.2 Strategy followed by Cork Airport 65
9.3 Strategy followed by Billund Airport 67
Chapter 10. Growth process and constraints and stimuli from the
external environment of Cork Airport and Billund Airport 68
10.1 Introduction 68
10.2 PEST analysis of Cork Airport 68
10.2.1 Political actors 68
10.2.2 Regional-economic (f)actors 72
10.2.3 Socio-cultural actors 73
10.2.4 Technological factors 73
10.2.5 Growth airport – growth business activities 73
10.2.6 Influence of and between stakeholders 74
10.3 PEST analysis of Billund Airport 74
10.3.0 Introduction: recent growth 74
10.3.1 Political actors 75
10.3.2 Regional-economic (f)actors 76
10.3.3 Socio-cultural actors 77
10.3.4 Technological factors 77
10.3.5 Growth airport – growth business activities 78 10.3.6 Influence of and between stakeholders 79
PART 4: CONCLUSION
Chapter 11. Important findings and comparison of GAE, Cork Airport, and Billund Airport with regard to the internal and external (f)actors 80
11.1 Introduction 80
11.2 Important findings from the introduction 80
11.3 Comparison of GAE, Cork Airport, and Billund Airport and important
findings 80
11.3.1 Characteristics 80
11.3.1.1 Ownership pattern 81
11.3.1.2 Supply 82
11.3.1.3 Pricing 82
11.3.1.4 Freight 82
11.3.1.5 Technical facilities 82
11.3.1.6 Service level 83
11.3.1.7 Accessibility 83
11.3.1.8 Production environment 83
11.3.2 Passengers 84
11.3.3 Strengths and weaknesses 84
11.3.4 Strategy 85
11.3.5 Constraints and stimuli from the external environment 86
11.3.5.1 Political actors 86
11.3.5.2 Regional-economic (f)actors 87
11.3.5.3 Socio-cultural actors 89
11.3.5.4 Technological factors 89
11.3.5.5 Growth airport – growth business activities 90 11.3.5.5 Influence of and between stakeholders 90
Chapter 12. An initiative to a process design and development alternatives 91
12.1 Introduction 91
12.2 An initiative to a process design 91
12.3 Development alternatives 94
12.3.1 Main development options 94
12.3.2 Sub options 95
12.3.2.1 Destinations 95
12.3.2.2 Commercial business activities 96
12.3.2.3 Development alternatives for a later stadium 97
12.3.2.4 General recommendations 98
Chapter 13. Discussion and refelection 100
13.1 Limitations 100
13.2 Recommendations for further research 100
13.3 Reflection on the process 101
References 102
Appendices 107
Appendix A: Variables internal characteristics 107
Appendix B: Selection of airports 108
Appendix C: Interview with Mr Stutterheim – GAE 123 Appendix D: Additional information on PEST analysis of GAE: AER vs.
European Commission 127
Appendix E: Interview foreign airports 128
Appendix F: Parking possibilities and tariffs at Cork Airport and Billund Airport 139 Appendix G: Additional information on PEST analysis of Cork Airport and
Billund Airport 141
Definitions and abbreviations
Definitions
Definitions of concepts used in this research are given below (source:
www.luchtvaartbeleid.nl, except for the definition of a regional airport):
Catchment area: Area served or market area of an airport, in other words the area from which the airport attracts its customers (passengers and freight).
Charter flights: Flights for which an airplane is especially hired and which is not part of the fixed flight schedule.
Hub-airport: Large central airport from which one or more (global carrier) airlines fly to many (inter-continental) destinations with high frequency and use an application directed transfer system to realise as many (transfer) connections as possible. Examples of hub-airports are London- Heathrow, Chicago-O'Hare and Amsterdam-Schiphol.
Mainport: An airport which functions as a home-base and central port for transport companies. At a main port, the mutual benefit between port facilities and establishment factors is optimal. The main ports of The Netherlands are Schiphol airport and the seaport of Rotterdam. A main port is a junction. A main port-airport has a generating effect, which leads to a positive establishment climate in the region for many activities which are or are not related to the airport itself.
O/D traffic: Origin/Destination-traffic, passengers who use an airport as starting or departing point of their flight journey.
Regional airport: Smaller airports which are not a hub and do not have a main port function (Nijdam, 2004).
Scheduled flight: Flight which is part of the fixed flight schedule of an airline.
List of abbreviations
Below, a list of abbreviations used in this research is given together with their meaning.
ACI Airports Council International ADL Arthur D. Little-Paris; consultancy firm AER Assembly of European Regions BCI Buck Consultants International CASP Cork Area Strategic Plan
CBS Centraal Bureau voor de Statistiek (Central Statistics Office the Netherlands) CCB Cargo Center Billund
CCQI Cool Chain Quality Indicators
ESDP European Spatial Development Perspective ESRI Economic and Social Research Institute
EU European Union
GAE Groningen Airport Eelde GDP Gross Domestic Product
ICT Information and Communication Technology ILS Instrument Landing System
KvK Kamer van Koophandel (Chamber of Commerce) LCC Low cost carrier
NMRC National Microelectronics Research Centre (University College Cork, Ireland) NSS National Spatial Strategy
N.V. NOM Investerings- en Ontwikkelingsmaatschappij voor Noord-Nederland (Northern Netherlands Development and Investment Agency)
PEST Political, Economic, Socio-cultural, and Technological (f)actors SAS Scandinavian Airline System
SME Small and medium sized enterprise
TNT Thomas Nationwide Transport (global provider of express, logistics, and mail services)
VNO/NCW Verbond van Nederlandse Ondernemingen + Nederlands Christelijk Werkgeversverbond
UCC University College Cork
VOLE Vereniging Omwonenden Luchthaven Eelde
Chapter 1. Characteristics of the NOM
1.1 Introduction
In this chapter I will give some insight into the activities of the NOM. First, some general information is given. Afterwards, the four divisions of the NOM are described.
1.2 Activities of the NOM
Purpose of the NOM is to stimulate a permanent improvement of the social-economic structure and the employment in the Northern Netherlands, consisting of the provinces of Groningen, Friesland, and Drenthe (www.nom.nl). To achieve this, the NOM supports many initiatives in the region and offers passionate entrepreneurs capital, knowledge, and contacts.
The NOM is an independent organisation, but is linked to and financed by the Ministry of Economic Affairs (N.V. NOM: nom stimuleert de economie van Noord-Nederland, 2005).
Growth, continuity, and professionalizing
The NOM can help companies in several ways when it comes to development:
• as a solid financial partner who can help with risk bearing capital;
• as specialist of the region who informs entrepreneurs and links them to the right contacts;
• as a practical expert who helps entrepreneurs with investments and subsidies;
• as a project manager who stimulates entrepreneurs in realising innovative ideas.
The NOM as a partner in investment trajectories and location decision
When an entrepreneur wants to start new activities and/or wants to expand his business in the Northern Netherlands, the NOM can assist him/her. Regarding investments in new activities, the NOM can indicate possibilities for financing and subsidies. The NOM helps with looking for regional, national, or European subsidy regulations.
Regarding searching for a new location and other conditions for activities, the NOM gives extensive information. The NOM has been a regional specialist for about 30 years and has information regarding many aspects of the economy of the Northern Netherlands. The NOM gives information about sectors, facilities and other location factors and brings entrepreneurs into contact with important persons and institutions, like governmental services, suppliers, and business networks.
The NOM as a partner in northern initiatives
The NOM plays a central role in many initiatives which enlarge the competitive power of business life in the Northern Netherlands and which improve the business climate. Often the ideas for these initiatives originate from companies; however, sometimes the NOM takes the initiative. The projects are amongst others directed towards:
• strengthening the strategy, professionalism and innovation of business life in the Northern Netherlands;
• stimulating networks and mutual cooperation between companies and between companies and knowledge institutions;
• business development: developing new markets, processes or products together with companies;
• strengthening the business environment: from ICT to labour supply (N.V. NOM: nom stimuleert de economie van Noord-Nederland, 2005).
NOM focuses on driving force companies, from large companies to small, and from traditional activities to high-tech enterprises.
To qualify for the services offered by NOM, a company must meet several conditions:
-The business is or will be established in the Northern Netherlands;
-The business is service or industry orientated;
-The business is not only locally providing, hence, focused on export;
-The company has growth potential and is intrinsically healthy (N.V. NOM: Northern Netherlands - your place to invest! 2005).
Next to financing, subsidies, and business locations, the NOM can be an important contact for: licenses (NOM provides information on licenses and other establishment requirements in the Netherlands, and helps with the application process), taxes (NOM provides information to foreign entrepreneurs on Dutch tax legislation and introduces them to tax advisors), collaboration (NOM introduces a company to the right partners for technological and innovative collaboration. The NOM also initiates and supports projects that endorse chains, clustering and other types of joint activities that will enhance the competitive edge of businesses in the Northern Netherlands), after-care (The NOM remains available for information, consultancy, or support) (N.V. NOM: Northern Netherlands; your place to invest! 2005).
1.3 Three divisions of the NOM
The organisation of the NOM is divided into three divisions: Investment Promotion, Financing, and Development and Innovation Projects (www.nom.nl).
• Investment Promotion
This is the division for which I did the assignment. The task of NOM-Investment Promotion is to interest potential national and international establishment candidates in the Northern Netherlands. In Groningen, Friesland, and Drenthe, NOM there is an active link between business, governments, managers of business parks, issuers of licenses/permits, energy suppliers, employment agencies, subsidy providers and information sources. The NOM also wants to stimulate direct contact with and between already existing driving force businesses, in order to be a decisive support and advice center when strategic investment decisions need to be made.
The division Investment Promotion informs businesses about:
-the position of establishment locations with regard to European markets;
-the current and future user values of industry and harbour locations in Northern Netherlands;
-logistic facilities and infrastructure;
-business and service climate in different sectors;
-location characteristics and premise and energy prices;
-establishment conditions and permits;
-subsidy and financing possibilities;
-the most important business sectors in Northern Netherlands.
• Financing
Based on a business plan, NOM-Financing participates in prospective full enterprises in Northern Netherlands which generate more than half of their turnover outside Northern Netherlands. Important is the financing of growing activities, a management buy-out/buy-in, and setting-up joint ventures. When the plan seems to be feasible, the NOM can supply risk bearing equity. The NOM does not participate in primary agriculture, retail, and regionally providing activities. The NOM sees her commitment to an enterprise as a long-lasting relationship. The average duration of a NOM-participation lasts for five to seven years.
Stock capital and backward loans
The NOM supplies risk bearing capital by means of stock capital, sometimes in combination with backward loans. Entrepreneurs can use this capital for financing growth of business activities, setting up a joint venture, a management buy-out/buy-in, or a stock transfer because of succession. Regarding participation in stock capital, the NOM always has a minority interest (www.nom.nl).
Incentive credit and innovation and development credit
Two special kinds of backward loans from the NOM are the incentive credit and the innovation and development credit. An incentive credit is an interest-bearing backward loan for a maximum of 100,000 for entrepreneurs and innovative activities inside existing companies. An innovation and development credit is an interest-free loan for a maximum of 50,000 and is meant to be used for development costs regarding a new product, service, or
process (N.V. NOM: nom stimuleert de economie van Noord-Nederland, 2005).
• Development and Innovation Projects
This division supports enterprises with the development of new business activities, on a project-basis. The added value of the NOM lies in the phase of development from idea to an elaborated, clear, and feasible plan.
Business development projects
New, driving force economic activities are necessary to strengthen business life of the Northern Netherlands. The project managers of the division Development and Innovation Projects can assist enterprises (individually or in clusters) with establishing new product/market/technology combinations. One can think of:
-making a plan for approaching a business development project;
-searching for partners who are willing to participate in the project and are willing to accept the risk involved;
-establishing cooperation links;
-searching for financing possibilities;
-temporarily supplying project management;
-guiding the establishment of a business plan.
Strategic projects
The attractiveness of Northern Netherlands for business life is strongly determined by establishment factors, like infrastructure, labour supply, incentives, and supplier structure.
Strategic projects are directed towards strengthening these establishment factors (www.nom.nl).
Now some general information about the NOM has been provided, in the next chapter I turn to the problem indication and the background. The research proposal will be formulated as well.
Chapter 2. Problem indication, background, and research proposal
2.1 Introduction
In this chapter, first an indication of the problem situation is given in paragraph 2.2. Then some general background information related to the problem is provided in paragraph 2.3. In paragraph 2.4 I discuss the research proposal, including the research purpose, the main question, the conceptual model, and the sub questions.
2.2 Problem indication
Business related activities at and around Groningen Airport Eelde (GAE) develop rather slowly. The NOM, management of GAE, stakeholders, and other surrounding parties would like to stimulate the development of business activities in order to give a positive impulse to the economic development of the region.
Development possibilities of an airport are somehow related to business activities surrounding the airport, concerning air transport as well as non-direct air transport related activities.
Development of an airport can attract business activities and make establishment of businesses in the neighbourhood of the airport very attractive. In turn, increasing business activities will stimulate further development of the airport.
Despite many efforts during the last decades, one has not really succeeded in giving the economy the desired impulse. There are other regional airports though, where efforts have been successful. To start aforementioned circle of movement, GAE would like to obtain insight into development possibilities for the airport, including elaborated, realistic plans.
Furthermore, it is important to find appropriate partners who are willing to participate in realizing these plans (Lenstra, 2004). For this reason, a task force ‘Airport development Eelde’ has been installed.
One of the activities which is very important here and has to be done is an analysis of the situation at some other regional airports (Lenstra, 2004). A number of regional airports have shown development and growth, which have led to an economic impulse. The results of such a benchmark study , together with an analysis of GAE, can give GAE an indication of realistic development possibilities.
This master thesis will focus on an analysis of regional airports which have already made quite a considerable development. The purpose of the analysis is to learn from developments at these airports, regarding the process of development as well as the content/results. This can form one of the bases on which GAE, as an entrepreneurial airport, can formulate her chances for concrete and realistic development plans.
2.3 Background
As mentioned in the problem indication, the broader purpose for the NOM is to stimulate the regional economy. European airports are now widely recognized as having a considerable economic and social impact on their surrounding regions. These impacts go far beyond the direct effect of an airport’s operation on its neighbours to the wider benefits that air service accessibility brings to regional business interests and to consumers. Airports provide essential infrastructure to support regional social and economic growth as well as being commercial entities in their own right, capable of generating returns on investment to the benefit of their shareholders, other stakeholders, and to society as a whole (ACI-York Aviation, 2004).
When we talk about economic impact of an airport; what do we actually mean? Before we turn to the research proposal, it is important to have some understanding of this effect.
Economic impact studies of airport activities
• Europe
Concerning Europe, it is the coordinating organization Airports Council International – Europe (ACI Europe)1 which, at the beginning of the nineties, played an important role in the current availability of data regarding the economic impact of airports. After a general study, performed by the interest organization ACI-Europe itself, from 1993 onwards, economic impact studies were performed by several airport operators. An example is the study for Zaventem (Dooms, Macharis, and S’Jegers, 2004). The specialized consulting firm York Consulting was then contacted to make a more in-depth analysis of the economic impact of airports in Europe based on the different studies at airports. This approach resulted in a first pan-European study in 1998. This study was actualized by the same researchers very recently (ACI/York Aviation, 2004). The total economic impact is usually studied by the methodology of dividing the total impact into four components. Graphically, this methodology of splitting up the total economic impact into the different components can be displayed as follows:
Figure 1. General methodology for determining the total economic impact of an economic activity (source: ACI/York Aviation, 2004)
I will elaborate more on the four impacts displayed in figure 1:
-Direct impacts: The employment of labour at, or immediately around, airports is the most immediately visible economic benefit. The direct impact can be defined as the value added and the employment generated in a certain geographical area as a consequence of performing airport-related activities on the airport site or in the immediate neighbourhood of it (Dooms, Macharis, and S’Jegers, 2004).
The on-site employment at airports is the economic impact that is most studied and quantified.
The general structure of on-airport employment can be described as follows:
1 ACI is the international profession organization of airports and airport operators. ACI Europe represents 450 airports in 45 countries (ACI/York Aviation, 2004).
Airlines/service Administration Commercial airlines airport company retail shops
ground handling agents non-airport security duty and tax free shops flight catering police restaurants
fuel services immigration car park companies cargo and freight operators customs car hire companies aircraft maintenance air traffic control
Table 1. On-site employment at airports (source: ACI/York Aviation, 2004)
-Indirect impacts: Airports not only support employment directly on-site and in the surrounding area but also indirectly in the chain of suppliers providing goods and services (ACI/York Aviation, 2004). Indirect impacts can be defined as the value added and the employment generated in a certain geographical area as a consequence of supplier relations to the direct activities (e.g. fuel supply) (Dooms, Macharis, and S’Jegers, 2004).
-Induced impacts: In addition, the incomes earned in these direct and indirect activities generate demand for goods and services in the economy, which supports further employment (ACI/York Aviation, 2004). Induced impacts concern the value added in a certain geographical area of the spending of the direct and indirect related employees (Dooms, Macharis, and S’Jegers, 2004).
-Catalytic impacts: Airports facilitate economic growth at a regional and national level but also act as magnets for a wide range of economic activities. This wider economic role of airports is known as the catalytic impact, arising from the effect that air service accessibility can have on the region served by the airport (ACI/York Aviation, 2004). The catalytic impact can be defined as the value added and the employment generated in a certain geographical area, because the airport activities (1) substantially contribute to an increasing productivity of the economic activities, and (2) substantially contribute to attracting other economic activities, in the form of foreign direct investment and tourism (Dooms, Macharis, and S’Jegers, 2004).
The mechanisms through which the catalytic effect operates relate largely to enhancing business efficiency and productivity by providing easy access to suppliers and customers. The effects are observed through the role of the airport in influencing company location decisions and competitiveness. The presence of an international airport can be a critical factor in:
-attracting new inward investment from outside the area, and especially companies from overseas;
-retaining existing companies in the area, whether they had previously been inward investors or indigenous operations;
-securing the expansion of existing companies in the face of competition with other areas;
-promoting the export success of companies located in the area by the provision of passenger and freight links to key markets;
-enhancing the competitiveness of the economy, and the companies in it, through the provision of fast and efficient passenger and freight services; and
-adding to the quality of life of citizens by enabling travel, notwithstanding local environmental implications.
-attracting business and leisure visitors and hence inbound tourism to the area, generating income and employment in the tourism industry (ACI/York Aviation, 2004).
• United States
An example of a recent economic impact study in the U.S. comes from the Columbus Regional Airport Authority (2005), which performed an economic impact study in conjunction with The Ohio State University Airport and Fairfield County Airport to estimate the economic benefits stemming from on-airport businesses and visitors to the Columbus region. They distinguish between first-round and second-round impacts.
-First-round impacts are divided into direct and indirect impacts. The definition of direct impacts is comparable to the direct effect as formulated by ACI/York Aviation (2004). The indirect impact is primarily attributable to the spending of visitors who arrive in the region via an airport.
-Second-round or induced impacts are the result of the recirculation of direct and indirect impacts within the economy. This re-circulation of impacts is frequently referred to as the multiplier effect. For example, as an airport employee spends his or her salary for housing, food, or services, that spending then circulates through the economy and leads to increases in associated spending, payroll, and employment throughout the region (Columbus Regional Airport Authority, 2005).
As described above, the direct effect is the starting point of the overall economic impact. A frequently quoted ‘rule of thumb’ is that airports support around 1,000 direct jobs for every one million passengers handled per annum (ACI/York Aviation, 2004). So, the direct effect depends on the number of passengers, amongst others. According to research by NYFER (2000), not the size of the airport is important, but the growth rate of the airport is important to contribute to region’s economic development: growth of air transport by 1% (measured as passenger moves) leads on average to 0.17% extra economic growth in the region. In sum, more passengers will lead to more direct jobs (direct effect), which will also produce an indirect and induced effect. In the longer term, a catalytic effect may also arise. Together, these effects represent the total impact on the regional economy.
Although airports are major generators of economic prosperity through their direct and measurable economic contribution, their most important function is the role they play in securing accessibility that allows other businesses to develop. Surveys have shown that international accessibility is one of the top three factors in company location decisions.
Airports are an essential part of the regional economic infrastructure and it is important that the growth of airports is seen as an integral part of national and regional economic development strategies. Growth of air service access can enhance the growth potential of a region, which in turn will increase the demand for air travel, creating a ‘virtuous circle’ of growth (ACI/York aviation, 2004).
This study is not an economic one in the sense that economic effects are quantified and impacts are determined. Thus, the reader should take above-mentioned as background information. The reason is that the current quantified economic impact is not important for the NOM and GAE. Important is to get to know why some regional airports have shown considerable growth and why this has not been the case for GAE so far. Therefore, in this research I will look at the growth process of airports. What can be derived from afore- mentioned, both in the European and the US studies, is that for starting the growth process, primarily the direct impacts, and secondary the indirect impacts are crucial. The extent to which these impacts can occur, are determined by internal and external (f)actors. This thesis therefore focuses on these internal and external (f)actors which have been important in making growth of airports (im)possible.
2.4 Research proposal
To make it as clear as possible for the reader, first the purpose of the research and the main research question are given, along with a short clarification. Then, before turning to the sub questions, the conceptual model is presented which is the guiding principle of the thesis. From the model, all sub questions can be derived and these are dealt with subsequently. In this way, the reader, at every sub question, can look back at the research model which increases the easiness of reading and understanding the structure of the thesis.
Purpose
To map external (f)actors and internal (f)actors of and around two regional airports which have grown considerably in the past on the one hand, and GAE on the other, in order to give GAE an indication of development possibilities.
Main research question
How can the external and internal environment of GAE and two regional airports which have grown considerably be characterized; how did the two regional airports approach the growth process; and how can this comparison and development overview give insight into development possibilities for GAE?
By external (f)actors I mean:
-Passengers (explained in more detail in sub question 2)
-Competitors, Political actors, regional-economic (f)actors, socio-cultural factors, and technological factors (explained in more detail in sub question 3).
By internal (f)actors I mean:
-Characteristics, strengths and weaknesses, and strategy (explained in more detail in sub question 4)
The reason for choosing to look at two airports next to GAE is that the success of an airport depends on many (interdependent) variables. To my opinion therefore, a comprehensive study on the development and growth process of a few airports is more valuable for GAE than a study on many airports regarding only one aspect. Combined with the limited timeframe available for this research (18 weeks) I came to the decision to look at two airports. The thesis can be described as an exploratory case study.
By grown considerably I mean:
-The airport has more passengers, destinations, flights, airlines serving the airport, and airport tenants than GAE.
-The airport does not only offer domestic flights.
Next, figure 2 presents the structure of this research (see next page). This conceptual model is partly derived from a development / growth model for an SME (Risseeuw and Thurik, 2003), from strategic literature (Aaker, 1992), from a study on the development of Eelde airport (Metra Consulting Group London / Northern Netherlands Airport Commission, 1972), from a research on airports and their external effect (Kramer, 1990), and from my own reasoning.
The model is elaborated on and explained after figure 2. It is valuable for the reader to have this model in mind when reading the next part.
Figure 2. Conceptual model Sub questions
9 airports (NOM) (including GAE)
Comparison based on location and size
2 foreign airports
GAE
Passenger analysis Sub question 2 External (f)actors (currently)
Constraints and stimuli for growth:
Political actors (Regional)-economic (f)actors (incl.
competitors) Socio-cultural actors Technological factors Sub question 3
Internal (f)actors (currently)
Characteristics Sub question 4
Strengths / Weaknesses Sub question 4
Strategy Sub question 4
Development in the past
Strategy Sub question 7
Growth process + external constraints and stimuli:
Political actors
(Regional)-economic actors (incl. competitors) Socio-cultural actors Technological factors Sub question 8
Inititative to a process design and development alternatives
Sub question 9 Airports served by low- cost (www.cheap0.com)
External and internal (f)actors (currently)
Passenger analysis Sub question 5
Characteristics Sub question 6
Strengths / Weaknesses Sub question 6 Sub question 1
Comparison
In order to answer the main research question, the following sub questions were developed (every sub question is also indicated in figure 2):
PART 1: INTRODUCTION
1. Which two (regional) airports are comparable to GAE, regarding location and size?
As can be seen in figure 2, the input for this comparison comes from two sources: the NOM and the website www.cheap0.com. The airports given by the NOM (next to GAE) are:
Maastricht Aachen Airport, Weert (private airport in Budel), and Eindhoven in The Netherlands; Luton and Farnborough in The UK; Schönhagen in Germany; Billund in Denmark (Lenstra, 2004), and Ljubljana in Slovenia. The reason for the second source will be explained more carefully in sub question 1. To explain it here would not increase the readability of chapter 2.
Regarding location I look at the geographical location (see chapter 3 for more detail) and the number of inhabitants in the surrounding area. Regarding the size of the airport I do not look at variables like number of flights and amount of passengers. The reason for this is that the airports which I use as a comparison have already shown a growth during the last years, which is not the case for GAE. So these kinds of variables are no good comparison variables.
Therefore, I choose to look at the length of the runways and the number of them because this might be the same as at GAE.
The greater the length of a runway, the larger the type of aircraft which can take off or land on it. Larger aircrafts have a higher weight. And “the greater the total weight (operating weight empty plus payload plus fuel) of an airplane, the longer are the takeoff or landing distances”
(De Neufville and Odoni, 2003). The non-stop distance which can be flown also increases with the length of the runway: longer stage lengths (or non-stop distances) to be flown “mean more fuel and thus increased weight and longer takeoff distances” (De Neufville and Odoni, 2003). So the longer the runway, the larger the aircraft type which can use it, and the more passengers can potentially be transported.
By having one runway with a maximum length which is fully used, an airport can grow by constructing a new runway. Then the airport can grow again until the new runway is fully used as well. Hence, the number of runways also forms an indication of the size of an airport.
After having compared the airports mentioned by the NOM and the relevant airports from www.cheap0.com, two foreign airports are chosen which are used in the remaining research and are compared to GAE.
PART 2: GAE
2. Who are the passengers of GAE and what are their characteristics?
Here I look at survey results of passengers who arrive at or leave from GAE. Source for this information is a survey among charter passengers, performed by Delger (2004) by order of GAE, during the period 16th April – 29th October 2004. With these results, we obtain some insight in the background of the passenger, their flight behaviour, and their opinion about the airport. This is important to know because passengers have to be retained and attracted in order for an airport to grow. I would like to have an answer to the following questions:
Departing passengers:
1. Where did you start your journey?
2. What is your end destination? (country and airport) 3. Do you live in Northern Netherlands? Yes / no
4. What is/was the purpose of your journey? Work / holiday / other 5. What is your occupation?
6. Are there any special reasons for flying from/to GAE, instead of flying from/to another airport? Yes / no. If yes, which ones?
3. Which are the most important stimulating and constraining (f)actors for a possible development and growth from the macro-environment of GAE and how do the actors relate to each other?
The macro-environment is split up into political actors, (regional)-economic (f)actors, socio- cultural actors, and technological factors (PEST-analysis, De Wit & Meyer, 2004). Regarding political, (regional)-economic, and socio-cultural actors, I make use of the framework of Kohse (2003) because in this framework the most important actors regarding development and growth of an airport are shown. “In the planning process for airports a lot of stakeholders and actors might be involved that either have a certain interest for a streamlined realization of the planning procedures or have different interest and certain blocking power that complicates the whole planning process” (Kohse, 2003:91). Figure 3 shows the stakeholders that participate actively and tangential in the airport planning processes as well as actors that do not participate in the process, however, their perceptions, objectives and behaviour has influence and an impact on the airport planning processes (Kohse, 2003:91).
Figure 3. Stakeholders displayed according to participation/influence on different airport planning levels (strategic plan, master plan and project plan level)
(source: Kohse, 2003)
From figure 3, I choose the most important stakeholders, sometimes modified/added with another stakeholder:
• Political actors
Concerning political actors I distinguish between the national government, the regional/local government, and the European Union. I look at the (regional) airport legal framework (including noise and environmental regulations). Furthermore, aid and promotion for development seems important to me.
• (Regional)-economic (f)actors
Here I start with giving the competing airports of GAE. The number of competing airports is of influence on the possibilities for development and growth of GAE itself.
Ideally, one would also have to map their characteristics, strengths, weaknesses, and strategy. But because of the limited timeframe I only give the number (and names) of the competing airports.
Furthermore, I distinguish between investors and local spatial land use and infrastructural planning agencies. Ideally, one would also have to take macro- economic statistics into consideration, for example GDP per capita and population growth. But since the relationship between these statistics and the propensity to fly is difficult to prove, I do not take these variables into consideration. The only factor I look at is the population number in the surrounding area of the airport.
• Socio-cultural actors
Regarding socio-cultural actors, I distinguish between local residents and environmental protection groups.
• Technological factors
Finally, I deal with technological factors which could constrain or stimulate a growth of GAE.
Furthermore, I research how the political, regional-economic, and socio-cultural actors relate and influence each other. Information regarding this sub question was mainly obtained by interviewing the Vice-President of GAE.
4. Which are the internal characteristics, the strengths and weaknesses, and the strategy of GAE?
Regarding internal characteristics, I look at variables most of which determine the quality and competing power of an airport (Kramer, 1990). The variables are elaborated and operationalized in appendix A. Here I give the general overview:
Ownership pattern Supply
Pricing Freight
Technical facilities Service level Accessibility
Production environment
Information regarding these characteristics was mainly obtained by the website of GAE and other documents and publications.
Regarding strengths I look at the characteristics that give the airport advantages over other sites or competitive airports and regarding weaknesses I look at characteristics which may limit its growth or opportunities (De Neufville and Odoni, 2003). Ideally, one would also have to look at the internal organization of the airport; whether the right personnel is to be found at the right place for example, or whether the airport has the right organizational structure.
Because this is more difficult to compare with other airports and regarding the limited time available, these are not subject of this research.
Regarding strategy the short and long-term goals of the airport are mapped and the way the airport would like to achieve these. Information on the strengths, weaknesses, and strategy of GAE was mainly obtained by interviewing the Vice-President of GAE.
PART 3: OTHER AIRPORTS
5. Who are the passengers of the other airports and what are their characteristics?
The most important questions to which I would like to have an answer here are:
1. What is/was the purpose of your journey? (Work / holiday / other)
2. In case of holiday: is/was there a specific attraction which made you fly to the region?
3. In case of business: what kind of business are you coming for/did you go for and where is/was the business located/to be done?
4. Are there any special reasons for flying from/to this airport, instead of flying from/to another airport? Yes / no. If yes, which ones?
Unfortunately, I could not get an answer to all of these questions. Some have been answered partially. Information regarding this sub question was mainly obtained by performing telephone interviews with directors of the foreign airports. Reason for doing telephone interviews with directors at the foreign airports instead of visiting those directors, is the result of a trade-off between cost of flying to the foreign airports and the added value of interviewing people in real instead of interviewing them by phone. I talked to the directors on the phone during a few hours and one can get quite a lot of valuable information in this way.
One should also take the purpose of the research into consideration: it is meant to be an exploratory study; no hard conclusions and advices are required by the NOM. Within this perspective, it was reasonable to obtain information by means of telephone interviews.
6. Which are the internal characteristics, and the strengths and weaknesses of the other airports?
Here I take the same variables as mentioned under sub question 4 into consideration.
Information on the internal characteristics was obtained by the websites of the foreign airports and by other documents. Information on strenghts and weaknesses was obtained by interviewing the directors of the foreign airports.
Sub questions 2, 3, and 4 deal with the current situation of GAE. Sub questions 5 and 6 deal with the current situation of the other airports. Sub questions 7 and 8 research the way these airports have come to the current situation and which stimulating and constraining factors they have experienced on this way. So these sub questions deal with the development which took place at the other airports and, hence, deal with a timeframe of many years.
7. Which strategy did the other airports pursue over the last years?
Here I map the short and long-term goals which the airport had and the way the airport is achieving/has achieved these. Information was obtained by interviewing the directors of the foreign airports and by reading secondary publications.
8. Which have been the most important stimulating and constraining (f)actors for development and growth during the past and how did the actors relate to each other?
In this sub question I distinguish between the same (f)actors as mentioned under sub question 3. Furthermore, I look in more detail at the relationship between the growth of the airport and business activities in the surrounding region. Information was obtained by interviewing the directors of the foreign airports and by reading secondary publications.
PART 4: CONCLUSION
After sub question 8 has been answered, I compare GAE and the other two airports on all aspects mentioned in sub question 1-8. Thereafter, I come to the final sub question:
9. How should GAE approach a possible process of growth, based on the process development analysis of the two other airports? And which development alternatives can be formulated for GAE, based on the internal and external comparison between the three airports?
Because I only look at two other airports, next to GAE, it is difficult to present hard conclusions. However, from the sub questions I would like to develop some development alternatives for GAE. These alternatives will be mainly based on the analysis of the current external and internal environment of all three airports. Together with these alternatives, I would like to give an initiative to a process design. This will be mainly based on the analysis of the development of the other two airports during the last years. I advise the task force
‘Airport development Eelde’ to take this urge seriously and to continue with designing a process approach. The reason for advising a process design is explained below.
De Bruijn, ten Heuvelhof, and In ‘t Veld (2002) mention three characteristics of problems which need a process design:
1. The problem is unstructured. An unstructured problem is a problem which does not have an unambiguous and/or authoritative solution. The reason for this is twofold:
-there is no objective information available;
-there is no consensus about the norms which should be used during the problem solving.
2. The unstructured character of problems arises from the fact that certain problems cannot be solved in isolation, but are interconnected with other problems.
3. A third characteristic of the content of problems which need a process design, is their dynamic nature.
In my opinion, the laborious growth of GAE is a problem which satisfies these three characteristics:
Ad. 1. Discussion is possible about the data, the methods, and the system boundaries which will be used in the problem definition and in choosing a solution. There are also different norms which can be used in the problem. For example, the airport might use different norms regarding noise than environmental groups and people living in the neighbourhood of the airport. Another factor which makes the problem unstructured is that the processes of deciding, paying, and enjoying are not in the hands of the same people. Therefore, the problem is unstructured.
Ad. 2. There are also other problems which play a role. An example is the regional economy, which is not performing as well as some parties in the Northern Netherlands would like. One will also have to take into account the surrounding environment of the airport. Therefore, the problem is interconnected with other problems.
Ad. 3. Third, the problem is dynamic as well. The problem might change after some time.
Factors that might change are for example the opinions and interests of relevant stakeholders, the legal framework regarding regional airports, and all kinds of regulations regarding noise and environment.
De Bruijn, ten Heuvelhof, and In ’t Veld (2002) distinguish between a traditional power field analysis and a continuous actor scan. The power field analysis is made from one’s own perspective. The result is a list of actors, their points of view, and their means of power. Then the initiator knows which actors have to be manipulated in order to achieve the initiator’s goal. The continuous actor scan, however, is directed towards getting to know points of view, interests, and incentives which can be used to design a process. The results of this process should serve as many interests as possible.
Some actors will stimulate the growth of GAE, and other actors do not want GAE to grow (indicated by the + and – sign below). Besides, parties might influence each other in a political way (not indicated). It might be important to involve all parties in the growth process right from the beginning. For the case of GAE, the following picture can be imagined:
Figure 4. Expected picture of interests in growth of GAE
Ideally, one would have to research opinions and interests of all relevant stakeholders, in order to make a continuous actor scan. However, regarding the scope and timeframe of this thesis, it is too much to do all this. Therefore, I collect data regarding influences between stakeholders from one perspective, namely the perspective of the directors of the airports subject of this research. In this way, it is still a kind of power field analysis. But for the task force it would be an important step to get to know the interests of all stakeholders, in order to serve as many interests as possible and avoid conflicts in the process of development and growth.
Growth GAE Passengers
GAE NOM
Business life
Neighbouring people Ecology groups
- -
+
+ +
+
During the management of the process, one should carefully safeguard the openess of the process, that is, the relevant parties will have to be involved in the decision-making and these parties will have to be sure that their interests will have to be taken into consideration as much as possible, within the process agreements of course. Also, core values of all participating parties should be protected during the entire process. Third, progree of the process has to be taken care of. Finally, the content of the process has to be taken into consideration, that is, the process may not be alowed to deviate too far from the original purpose: to solve problems with respect to content and generate solutions.
2.5 Data collection
As already mentioned in paragraph 2.4, primary as well as secondary information is used.
Primary information: semi-structured (telephone) interviews.
Secondary information: articles, publications, internet.
From the next chapter on, all sub questions which are explained in this chapter will be answered. In chapter 3 the airports are selected for the remaining research. Chapter 4 deals with the passengers of GAE. Chapter 5 continues with constraints and stimuli from the external environment. In chapter 6 I describe the characteristics, strengths and weaknesses, and strategy of GAE. Then in chapter 7, the passengers of the other airports are addressed, followed by the airports’ characteristics and strengths and weaknesses in chapter 8. Chapter 9 describes the strategy which the airports have followed, and chapter 10 describes the constraints and stimuli from the external environment. Then a comparison follows in chapter 11, from which an initiative to a process design and development alternatives are derived in chapter 12. The thesis ends with a discussion and reflection.
PART 1: INTRODUCTION Chapter 3. Selection of comparable airports
3.1 Introduction
In this chapter, sub question 1 is answered: “Which two regional airports are comparable to GAE, regarding location and size?” Five airports are selected which are comparable to GAE.
These five airports were sent a letter (including an interview) and asked if they would like to cooperate. Two airports responded and there were also two airports needed for this research.
So these two airports are used in the remaining research. In paragraph 3.2 I first elaborate more on how this sub question is answered. Thereafter, I start with the selection in paragraph 3.3.
3.2 Method and argumentation Sequence of selection:
• I look at the airports mentioned by the NOM (see paragraph 2.4, sub question 1).
• After this, I focus on the countries UK (England, Wales, Scotland, and Northern Ireland), Ireland, Denmark, Norway, Sweden, Finland, and Northern Germany.
I choose to look at countries in Northern / North-West Europe. The countries in Southern Europe have a warmer climate and many holiday destinations. In 2003, the number of tourists (x 1,000) in France, Spain, and Italy were 29,552, 17,899, and 24,553 respectively. In contrast, these numbers in Denmark, Ireland, Finland, and Norway were 2,802, 3,695, 2,404, and 2,639 respectively (www.epp.eurostat.cec.eu.int). The airports in Central Europe are located far from sea (see point 5 below) and people can travel in all directions after arriving at those airports. Regarding Eastern Europe, there might be some airports located in a relatively small city near the sea but I assume that these airports still have to be developed. Ryanair for example, has just announced that it starts operating flights to Poland and in this way ‘liberated Poland’2. Besides, the countries in Eastern Europe are countries in transition and therefore, standards and criteria might be slightly different from those in highly developed countries.
This might make a comparison less valuable.
To make sure that the airports from these countries are comparable somehow to GAE, but at the same time are not too small (GAE would like to see if and how it can grow in the future, so the two airports which I choose to research more in-depth will have to be grown), I take the following restrictions into consideration when collecting basic information on a number of airports:
1. The airport has more passengers, destinations, flights, airlines, and airport tenants than GAE.
2. The airport does not only offer domestic flights.
3. The airport is not the national airport or the main airport of the capital.
4. The airport is not the main airport of a city having more than 500,000 inhabitants.
5. The airport is not located in a metropolitan region (e.g. London, Hamburg, and Copenhagen).
6. The airport is located to a certain extent isolated from the rest of the country and preferably not too far from sea. This restricts the centrality of the airport.
7. The airport offers more than five international destinations.
2 Ryanair, Europe’s No. 1 low fares airline, announced at the 18th of May 2005, 5 new routes to Poland and Slovakia. From October 30th, 2005 Ryanair will operate daily flights from London-Stansted to Gdansk, Bydgoszcz, Szczecin, Rzeszow (Poland) (60 years after VE day: Ryanair liberates Poland – 5 new routes to Poland & Slovakia at fares from £3.99 (www.ryanair.com).
8. Information required for this first screening will have to be obtainable from public sources.
Above, the first source of input for the selection of airports is mentioned, namely the NOM. In chapter two though, I mentioned a second source of input, namely the website www.cheap0.com. In the next part this decision regarding the second source is explained more carefully. Starting point forms a classification of strategies which airports can follow (Graham, 2001). From these strategies, I take the one which would suit GAE best. This choice leads to the abovementioned website as a basis from which to select the other airports.
3.2.1 Marketing by airports
Marketing is a relatively new business strategy employed by airports to try to attract business. Airports possess a number of different strategies to market their services (Graham, 2001):
• Charter or freight specialization
• Hub or hub alternative
• Traffic overspill/reliever
• Low cost alternative within a region
• Proximity to specific areas
Each of these strategies is elaborated on now.
Charter or freight specialization:
Currently, 80% of all passengers at GAE come from charter flights; holiday flights to destinations in Southern Europe during the summer period. According to Mr C.
Stutterheim – Vice President of GAE – the charter flights are quite easily filled during summer. But in the whole period between March-October, this is more difficult to achieve.
The goal is to give an impulse to the regional economy of Northern Netherlands.
Therefore, it is better to offer flights continuously, rather than only charter flights during summer3. Furthermore, in the interview it became clear that the volumes of freight offered to GAE by companies in Northern Netherlands are only very small. Last year, between 3,000 and 8,000 kg freight was transported. Besides, the airport is closed at night and this is not going to change in the near future. There are not enough companies present in Northern Netherlands, so more (foreign) companies will have to be attracted in that case.
Hence, it will take time and effort before GAE can develop itself as a freight specialist.
The definition of a hub is a large central airport from which one or more (global carrier) airlines fly to many (inter-continental) destinations with high frequency and use an application directed transfer system to realise as many (transfer) connections as possible.
Examples of hub-airports are London-Heathrow, Chicago-O'Hare and Amsterdam- Schiphol. Taking into consideration this definition, it seems very unlikely that GAE will develop itself as a hub in short term or long term. As hub alternative and traffic overspill- reliever GAE does not seem to be very suited either. Lelystad and Rotterdam are more candidates for this: both airports are owned for 100% by N.V. Schiphol Airport. These airports offer chances for Schiphol when the capacity constraints at Schiphol increase and
3An example of an airport which did manage to position itself as a charter airport is Orlando Sanford. After some market research they were able to attract many charter flights and passengers (De Neufville and Odoni, 2003). But Florida enjoys a warm climate all year, supporting tourism, and has some large cities as well.
