The return of the low cost terminal as Warsaw’s Chopin Airport seeks ways to ‘divide’ traffic

Polish Airports considers a budget (LCC & Charter) terminal at Warsaw Chopin Airport

PPL Polish Airports' CEO Andrzej Ilków said recently that the construction of a terminal dedicated exclusively to low cost and charter airlines was being considered at Warsaw Frederic Chopin Airport, and that the decision would be influenced primarily from the need to maintain full capacity at Chopin Airport.

He continued, "We currently do not have the option of administratively dividing airport traffic in Mazovia [the province where Warsaw is located], because we cannot provide airlines with access to aviation infrastructure at an equivalent level. Our goal is to create conditions for constructive cooperation with carriers so that they can take conscious decisions about the airports that best suit their needs".

'LCATs' were prevalent from the late 1990s

If such a decision is taken it will reverse a global trend towards hybridity in terminal and pier design in recent years, which itself was an about-turn from the preference shown for such 'low cost airports and terminals', or LCAT's (as CAPA - Centre for Aviation dubbed them), in the first decade of this century.

That original trend was dictated by the huge increase in low cost/budget flights (and LCCs) from the mid-late 1990s onwards and the demands levelled by their management, which showed unusual and novel aggressiveness in its tactics, often insisting that very basic low cost facilities be provided so that, accordingly, reduced levels of charges could be applied to the LCCs.

Hence the birth of the low cost terminal.

Many secondary level airports declined to be bullied, but at least provided some sort of segregation within the existing facilities, while the tertiary airports, some of which had handled barely any commercial traffic before the advent of the LCCs, offered facilities which were designed only for that business model.

The Asian experiment did not work initially

A small group of others across the world, but mainly in Europe (west and east) and Asia Pacific, and including primary level airports, opted to build specific infrastructure for the LCCs. Two examples in Asia Pacific were Singapore Changi and Kuala Lumpur, both of them building such terminals in 2006.

The former no longer has a dedicated budget terminal, the LCCs are accommodated across the main ones, while the latter closed its terminal (which was situated a great distance from the main campus) and built a huge replacement, KLIA2, identified by AirAsia's (now Capital A) CEO as a 'Taj Mahal' - the very same pejorative terminology used by his European counterpart, Ryanair's Michael O'Leary, to categorise many primary airport terminals.

Warsaw's Modlin Airport is a good example of a LCAT

Warsaw's other airport, Modlin, is a good example of a later LCAT.

It is located 40 kilometres (25 miles) north of the capital, and was previously a military base, then more recently a general aviation and flight training airport until its transformation into a commercial low-cost carrier facility. It has always been the preserve of LCCs, and today 100% of its capacity is on that business model (and exclusively on Ryanair).

During runway works there in 2012-2013 Ryanair shifted capacity to Warsaw Chopin and threatened to stay there, but soon drifted back.

More recently, though (Aug-2024), Ryanair advised that it would cut capacity by 50% at Modlin in northern winter 2024-5. It will continue operating 22 routes from Modlin while shifting some capacity to Chopin Airport, where it will run six routes in a move that just might be linked to PPL's announcement.

Ryanair currently has only about 1% of movements and capacity at Chopin, while Wizz Air has 21.5% of capacity.

Warsaw Frederic Chopin Airport: system seats, all business models, week commencing 30-Sep-2024

Source: CAPA - Centre for Aviation and OAG.

Low cost currently amounts to 26% of capacity overall at Chopin compared to the 1% at Modlin.

Low cost continues to drive the post-pandemic travel revival

Does this investigation by PPL indicate that low cost is making a comeback - if, indeed, it ever went away?

It was certainly the case in Europe in the immediate aftermath of the two worst COVID-19 pandemic years, 2020 and 2021, that LCCs did reinvigorate the air transport business, since they mainly operate leisure routes, and the onset of the so-called 'revenge travel' (to visit relatives and to take vacations) ensured that demand returned swiftly.

In fact, a chart of total seat capacity within Europe and to/from Europe reveals that low cost is currently (Jan-Oct-2024 or 9M2024) running at its highest capacity level in both categories since before 2014, where the chart begins - 13% of 'to/from' seats and 48.5% of 'within' seats.

Seats from 2014 to 2024 for Europe

Source: CAPA - Centre for Aviation and OAG.

That provides a solid base on which to make such an infrastructure development decision.

However, in Poland itself the message is quite different. In the period Jan-2024 to Oct-2024 domestic LCC seat capacity has fallen to 9.2% of the total, from 16.2% in the full year 2023. That is pretty much where it was in 2018, while it should be noted it has been as high as 28.6% in 2017, the last of three years with very high levels.

Seats from 2014 to 2024 for Poland

Source: CAPA - Centre for Aviation and OAG.

On the international level the ratio of LCC seats stands at 64% in 9M2024 - again similar to what it has been in the immediately previous years, and it is higher than the 2019 level (55.9%).

So there is little in the Polish domestic statistics to justify an LCC terminal, although there is (just) in the international statistics.

Hybrid airlines mean that the huge LCC capacity increases experienced in the 2000s will not return

What are missing, without question, are the dramatic increases in LCC capacity that were witnessed in the 'noughties' (2000-2010), when they were often exponential.

That will not return because of the degree of hybridity that the full service/legacy airlines were forced to introduce on many of their routes in order to compete - manifested in large-scale cost-cutting in in-flight services, allied to readjusted prices, but which very rarely saw those FSCs asking to be housed in the 'concrete lean-tos' that some LCATs were called by critics.

The other side of this equation is the existing facilities at Warsaw Chopin. What does Mr Ilków mean when he says, "We cannot provide airlines with access to aviation infrastructure at an equivalent level"?

But Warsaw Chopin needs more LCCs

It is certainly the case that full service (69.5%) and alliance airline (68%) capacity dominate at Warsaw Chopin.

How that compares to other principal European capital city airports is shown below.

Ratio of FSC/Regional; alliance; and LCC airline capacity, week commencing 23-Sep-2024

Airport	Has secondary airport(s)? Y/N	% FSC and regional airline seats	% Alliance airline seats	% LCC seats
Warsaw Chopin	Y (1)	70.2	68.0	25.9
Berlin Brandenburg	N	40.3	35.3	59.0
Copenhagen	N	57.3	55.0	39.4
Prague	N	31.1	25.8	68.4
Budapest	N	26.6	21.1	69.0
Vienna	N	66.6	62.5	33.2
Amsterdam	N	73.2	68.8	22.8
Brussels	Y (1)	72.1	65.0	17.0
Paris Charles de Gaulle	Y (2)	87.0	76.1	13.0
London Heathrow	Y (5)	97.8	87.7	2.2
Average		62.2	56.5	35.0

Data sources: CAPA - Centre for Aviation Airport Profiles.

Chopin is the fifth lowest of the group of 10 for LCC seats and, excluding the three global gateway hubs in the table (Amsterdam, Paris CDG and London Heathrow), it is the second lowest.

At 25.9% it is below the average for the group as a whole and all its central and eastern European peers, including Vienna, which historically found it difficult to attract LCCs.

On that basis alone, an argument can be made to provide LCC-friendly infrastructure there if it attracts and retains those airlines.

Current construction work doesn't specify any low cost facility

The airport is currently in the midst of a terminal development and redevelopment project, along with one for a hotel, costed in total at over USD200 million according to the CAPA - Centre for Aviation Airport Construction Database, and there is no previous evidence of a low cost terminal having been considered previously (but see later!).

Two terminals were joined into a single Terminal A in 2010, which consists of five check-in areas in two main halls, South and North, with 116 check-in desks and 45 passenger gates, 27 of which are equipped with jet bridges.

With little work having been done between then and this recent round of improvements, the opportunity exists to designate one of the halls into an LCC/charter/regional airline facility (total capacity just over 30%) - or build a new one altogether. Whether or not a new one would be built on the same 'austerity' lines as those in the 2000s is open to question.

CPK is a problem - Warsaw Chopin might even close - but that is way in the future

On paper, at least, the fly in the ointment (so to speak) for Warsaw Chopin is the USD6-7 billion New Central Polish Airport (a.k.a. 'Solidarity Transport Hub') and known as 'CPK' which is intended to serve as a facility not only for Warsaw, but for the entire country as its name suggests, with rapid rail connections throughout.

But no construction work has yet started on CPK, which is still at the geotechnical and geological field studies stage, tests that are scheduled for completion in Jun-2025. It isn't expected now to open until 2032 (previously 2031 and 2028 before that).

No decision has been made on whether Warsaw Chopin would then close.

SEE RELATED CAPA - CENTRE FOR AVIATION REPORT FROM OCT-2023: Poland's Central Polish Airport starts to take shape: part one - entering decisive development phase; part two - VINCI and Incheon combine for PPP

Meanwhile passenger traffic is continuing to grow at 19% (5M2024) at Warsaw Chopin, and in light of the continuing trend of increasing low cost demand a solution must be found there long before CPK's scheduled opening.

Low cost terminals seem to have a longer life expectancy than airports

It may be useful to look back at some of the airports in Europe where designated LCATs were built in the past, and where greenfield budget airports were constructed, and what happened to them.

Airport	Country	Terminal or Airport	Active or Closed as commercial passenger airport	Date opened as LCAT	Description
Coventry	UK	Airport	Closed	2004	Municipally owned airport bought by TUI and built up to almost 1mppa before closing in 2008 after a lengthy planning battle. Now under different owners, it has reverted to a general aviation/cargo facility.
Doncaster-Sheffield	UK	Airport	Closed	2005	Opened by the Peel Group (UK) as Robin Hood Doncaster-Sheffield airport, as a military airfield conversion. Managed a maximum of 1.5mppa. Closed in 2022 when Peel Airports exited, then acquired by the local municipality, which intends to reopen it.
Glasgow Prestwick	UK	Airport	Active	1992	Open since 1938 and also a military facility. Once a major gateway with trans Atlantic services, has been reinvigorated by a succession of private owners since 1992, but has never exceeded 2.5mppa. Now at 0.5mppa (2023). Now owned by the Scottish government, which wishes to onsell or lease it.
(London ) Manston (Kent International)	UK	Airport	Closed	2004	A 'London' airport, 60 miles/95km from the UK capital with a very long (military) runway, Manston was developed by a succession of UK and foreign owners until it closed in 2014. Subsequently acquired by a US real estate investment firm, which has acquired the rights to reopen it mainly as a cargo airport.
Frankfurt Hahn	Germany	Airport	Active	2001	Another military airfield conversion and Ryanair's 2nd European base. Has gone through several ownership changes, and a spell of bankruptcy, with wild gains/losses in traffic. Once handled over 4mppa. 2023 total was 1.7 million. Minimum pre-COVID was 1.5 million (2019).
Niederrhein/Weeze	Germany	Airport	Active	2003	Close to the Dutch border, in a heavily populated area and a competitor to Düsseldorf Airport. Another military airfield conversion, and now used almost exclusively by Ryanair. Like Hahn, its traffic growth has not been consistent. Highest total was 2.9 million (2010) reducing to 1.2 million in 2019, but since recovering beyond that to 1.6 million (2023).
Marseille	France	Terminal	Active	2006	MP2 terminal opened in 2006 at a cost of EUR16 million, with 'Spartan' 'hardship' facilities to encourage domestic airlines to compete with the TGV high-speed rail service. Regarded as successful. MRS handled 10.8 million pax in 2023, in excess of the 2019 level, and low cost is 55% of capacity.
Bordeaux	France	Terminal	Active	2009	Bordeaux opened its Billi Terminal, the first standalone budget terminal in France, in 2010, with a similar 'hardship' design to that of Marseille's. Initially ridiculed by users, it survived, and now handles easyJet and Ryanair services, which account for 58.5% of capacity.
Charleroi/Brussels South	Belgium	Airport	Active	2000	Belgium's second busiest airport was opened as a LCAT by Ryanair as its first mainland UK base in 2000. Went from strength to strength, and added infrastructure. Publicly owned, but with private sector minority equity. 2023's 9.4 million pax is the highest total ever recorded.
Ciudad Real	Spain	Airport	Closed	2009	Originally known as Don Quixote Airport, it is a vanity project by local councils and some private sector enterprises, which sought to provide competition for Madrid Barajas airport - well over 100km away - by focusing on LCCs and a fast (AVE) rail connection. Thwarted by regulatory issues and bad timing, it never got going, and closed to commercial flights in 2012 when it was known as an 'aeromuerto'.

Sources: CAPA - Centre for Aviation Airport Profiles, 2007 and 2009 LCAT reports.

Although many of the full airport conversions to low cost facilities - most of which were previously military ones - have closed, the (fewer in number) terminals have mostly survived, albeit with some adjustments to their 'Spartan' specifications that were made later.

Warsaw Chopin has had a budget terminal before - what had been a supermarket and furniture store

The humorous, almost comical, thing about PPL's plans at Warsaw is that there already has been a low cost terminal at Chopin Airport.

Following Poland's entry into the European Union in 2004, there was both an influx of foreign visitors into the country and an exodus of Poles looking for work elsewhere in the EU. Along with that came the almost inevitable rise in the number of LCCs, the majority of then flying into Warsaw, which was handling over half of the entire air passenger trips in the country.

Warsaw's LCAT was called 'Etiuda'. It opened in Mar-2004 to supplement the existing T1 and was situated in the southern part of the airport, away from the main buildings.

It lacked FBO and retail provisions, offering only a coffee shop and drinks machines. Customs clearance was only for passengers to other EU countries, so there was no Duty-Free either. It did not even have a designated car park.

In a previous life it had been an arrivals hall, but when facilities were centralised it became a furniture warehouse, a supermarket and storage space.

In 2009 PPL closed Etiuda and doubled charges at the other terminal, prompting outrage from Wizz Air - although it did stay, and remains the second busiest airline by capacity today.

Little can be learned from that previous experience

Can PPL learn anything from that experiment with a budget terminal?

At the time it might have done, but passenger expectations are so much higher now.

'Low Cost Carriers' are perceived now to be what they are - a little bit cheaper than their competitors, but still trying to maximise profitability - and by consequence so are these terminals that still serve them. Opening a very basic 'austerity' or 'hardship' facility like that in 2024 would be commercial suicide.

BACKGROUND INSIGHT: Low Cost Airports & Terminals Report 2009

More information on low cost airports and terminals is available in the Low Cost Airports & Terminals Report 2009 report.

The 2009 report contains over 300 pages of coverage of Low Cost Airport Terminals developments worldwide. The report draws heavily from experiences, examples and case studies involving European airports - where the most intensive LCC activity has occurred over the past decade.

It can be accessed here: Low Cost Airports & Terminals Report 2009