Vienna International Airport: matching its peers. A vital east-west hub


With its well-developed market economy, skilled labour force, and high standard of living, Austria is closely tied to other EU economies, especially Germany’s. The City of Vienna is one of Europe’s richest, and sitting as it does on the border of Eastern and Western Europe it has been able to benefit from trade between the two for many years.  Its airport continues to do so today.

Only a decade ago it was underachieving for a wealthy capital city airport with high hub potential. But there have been considerable investments made in the infrastructure – which continue – and in addition Austrian Airlines has been absorbed into the Lufthansa Group, which has ultimately benefitted the airport. The airport now handles 22 million ppa, but growth rates recently have been low.

This report examines Vienna International Airport by way of several sets of metrics, looks at the airports that are rivals to it, at its construction activities and its changing ownership.

Austria and Vienna: Economic introduction

Austria's status remained unclear for a decade after the end of the Second World War. A State Treaty signed in 1955 ended the occupation, recognised Austria's independence, and forbade unification with Germany.

A constitutional law that same year declared the country's ‘perpetual neutrality’ as a condition for Soviet military withdrawal. The Soviet Union's collapse in 1991 and Austria's entry into the European Union in 1995 have altered the meaning of this neutrality. A prosperous, democratic country, Austria entered the EU Economic and Monetary Union in 1999.

With its well-developed market economy, skilled labour force, and high standard of living, Austria is closely tied to other EU economies, especially Germany’s. Its economy features a large service sector, a relatively sound industrial sector, and a small, but highly developed agricultural sector.

Economic growth has been relatively weak in recent years, approaching 0.8% in 2015 (see chart below). Austria’s 5.8% unemployment rate (see chart below), while low by European standards, is at its highest rate since the end of World War II, driven by an increased number of refugees and EU migrants entering the labour market. Without extensive vocational training programs and generous early retirement, the unemployment rate would be even higher.

Although Austria’s fiscal position compares favourably with other euro zone countries, it faces several external risks. Primary of these are: unexpectedly weak world economic growth threatening the export market; Austrian banks' continued exposure to Central and Eastern Europe; repercussions from a major bank collapse; political and economic uncertainties caused by the European sovereign debt crisis; the current refugee crisis and continued unrest in Russia/Ukraine.

Early signs point towards a slight improvement in 2016, driven by low interest rates on government debt. Currently the budget deficit stands at 2.7% of GDP, and public debt has reached a post-war high of 84.2% of the GDP.

A snapshot of economic indicators for Austria

It is interesting to compare the economic data below with those of neighbouring Switzerland, which is not a member of the European Union but  has preferential trading arrangements with it. Nor is Switzerland in the euro zone, unlike Austria.

(Those data appeared in the recent report on Geneva Airport. Please see: Geneva Airport bids in privatisation of Lyon Airport as Geneva breaks traffic record)

The Austrian GDP growth is slightly lower than Switzerland’s and is estimated to remain lower in the following five years.

Inflation bucks the trend of the euro zone a little, and is anticipated to be up to a percentage point higher in Austria than in Switzerland over the next five years. Unemployment, however, is at a lower rate in Austria and should stay lower in the measured five year period, by up to two percentage points.

GDP Growth of Austria (percentage change), 2010 projected to 2020

Inflation and average consumer prices of Austria (percentage change), 2010 projected to 2020

Unemployment rate of Austria (percentage of total labour force), 2010 projected to 2020

Details of tourism arrivals for 2015 are set out in the chart below. Germany is the country supplying the largest proportion of visitors by far, though many will arrive by road, as is the case with Italy and Switzerland/Liechtenstein and, to a lesser degree, the second largest market – the Netherlands.

The size of the Chinese market (2.7%) should be noted. It is only just behind that of the UK, but ahead of Austria's neighbour the Czech Republic, the US, and even France.

While Austria has much to offer the tourist beyond Vienna, the city of Vienna will be on the itinerary of most foreign visitors, for leisure or business and the airport is the primary international gateway.

Visitor arrivals by market at Vienna, percentage of market, 2015

Vienna – a prosperous city that perpetuates its imperial history

Vienna is the capital, the largest city, the primary commercial, political and cultural city and one of the nine states of Austria. The population is approximately 1.8 million, amounting to 2.6 million within the full metropolitan area – almost one third of Austria's population. It dominates the country in a way that few other European capitals do.

Moreover, being located in the eastern part of Austria and close to borders with the Czech Republic, Slovakia and Hungary, it has a larger transnational population. The metropolitan region formed with Bratislava in Slovakia, for example, counts approximately three million inhabitants.

Vienna hosts many major international organisations, including the United Nations and OPEC.

Irrespective of the Austrian economy as a whole, Vienna has been classified as the most prosperous city in the world, with a gross regional product capita in the region of EUR50,000; approximately 160% of the EU average. It scores highly in terms of ‘innovation’ and is frequently identified as ‘the most liveable city in the world’ (or similar title).

Broadly speaking the service sector is the most important economic sector with a share of over 85% in gross value added. Industry and commerce have a share of 14.5% in gross value added, with agriculture playing virtually no role in the city-region except for viniculture (though that is not the case elsewhere in Austria).

The most important business sectors are trade (14.7% of added value in Vienna), scientific and technological services, real estate and housing activities, as well as the manufacturing of goods. Vienna’s contribution to Austria’s outgoing and incoming foreign direct investments is of the order of 60%, which demonstrates its role as an international hub for domestic and foreign companies.

Vienna has always held a particularly strong position as a gateway to Eastern Europe and indeed, Austrian Airlines was never shy to publicise its slogan ‘the West-East Airline.’

At least 300 international companies now have their Eastern European headquarters in Vienna and its environs. Companies in Vienna have extensive contacts and competencies in business with Eastern Europe due to the city’s historical role as centre of the Hapsburg Empire. The number of international businesses in Vienna continues to grow and the city-region has also established a reputation as a business start-up location, being ranked in the top 10 start-up cities worldwide.

Research and Development (R&D) is also an important component of the employment mix, and apart from the hundreds of R&D firms in the life sciences sector there are 25 public and private research institutions.

Finally, Vienna is one of Europe’s largest IT locations with close to 10,000 IT businesses.

All this activity ensures that Vienna is one of the world's top destinations for international congresses and conventions, with 200 events each year.

Vienna International Airport competes with German and other major European airports

In terms of international competition, Vienna is ranged against five airports. Two of them, Prague and Budapest, have historically vied with it for the title of ‘East & Central European hub,” all of them experiencing varying fortunes over the years.

To the west, the large and fast-growing Munich Airport in Bavaria, Germany, is attractive to cross-border air travellers from western Austria, even though there are airports at Salzburg and Innsbruck. Possibly the most intriguing competitor is Bratislava Airport in Slovakia, 80 km (50 miles) from Vienna, and less from Vienna Airport. Bratislava hosts almost exclusively LCCs, and is an airport with which Vienna Airport has discussed ‘co-operation’ in the past. The two cities form a large cross-border metropolis, as mentioned earlier.

N.B. Zurich Airport is also a competitor but only for hub traffic, and since both SWISS and Austrian Airlines came under the control of Lufthansa Group that competition is moderated. Accordingly, Zurich Airport is not included in the peer group.

Map of the area encompassing Vienna, Munich, Prague, Bratislava and Budapest

The table below compares these airports by assorted metrics.

Apart from Bratislava, all the airports fulfill the role of both point-to-point (O&D) and hub airports on account of (a) being the capital and/or a chief commercial city (which does also apply in the case of Bratislava), and (b) the location there of ‘national’ airlines that promote connecting flight activities to varying degrees.

(1) Airport rankings by assorted metrics: ASK, seats, frequencies and cargo payload; city populations compared. 

Airport/metric world ranking




Cargo payload

Pax 2015 (million)

+/- previous year %

City population (million)









Budapest F Liszt Int








Prague V Havel
















Bratislava Ivanka







3.0 *1

The first conclusion to be drawn from this data is that Munich Airport eclipses all the other members of this peer group and operates on a different global scale. However, within the secondary hub level battleground – between Vienna, Budapest and PragueVienna has edged to the leading position in both the passenger and cargo segments, in all measures.

On the other hand, it was the slowest growing in the passenger segment in 2015, behind Munich Airport which is almost twice as large (annual growth above 5% per annum rarely takes place above 40 million ppa).

On this evidence Bratislava Airport can be dismissed as a competitor to Vienna on both counts – passenger and cargo – since it is so far behind in the global rankings. However, the obsessive focus there on the low cost passenger segment means that it cannot be dismissed. Just as in other scenarios between airports there will inevitably be a negative effect on traffic at the primary level airport (for comparison: Brussels Zaventem/Charleroi; Milan Malpensa and Linate/Bergamo; Manchester/Liverpool).

The table below summarises Vienna International Airport’s route network at this time and the table below that compares Vienna to its peer group in network terms.

Vienna International Airport Network Summary (at 18-Apr-2016)

Total Airlines


    Domestic only




Total nonstop passenger destinations






    Asia Pacific


    Schengen Europe


    Other Europe


    Latin America


    Middle East


    North America


Total nonstop freight destinations






    Asia Pacific




    Latin America


    Middle East


    North America


(2) Airports compared by airlines, passenger traffic, international airlines and destinations


Total airlines

Pax traffic 2015 (million)

Airline to pax ratio

International airlines

Nonstop passenger destinations

Nonstop freight destinations








Budapest F Liszt Int







Prague V Havel














Bratislava Ivanka







This table shows that Vienna is actually not far separated from Munich in terms of the total number of airlines and international airlines operating at the airport, and nonstop passenger destinations, and is considerably ahead of the rival Budapest Airport. Its airline to passenger ratio is not particularly low, hinting at a comparative lack of airline competition when matched with the Budapest and Prague airports.

Vienna has a very high reading in the nonstop freight destinations column, in fact – much higher than that of Munich Airport. The reasons for this are examined later.

Vienna's seat capacity rising slowly

Airline seat capacity has been slowly rising over the last two years, although the rate of growth halved between 2014 and 2015.

Vienna International Airport, seat capacity year-on-year, system-wide

The vast majority of capacity is international. Domestic capacity is mainly O&D and feeder traffic from Austrian cities where a justification can be made for air services such as Salzburg, Innsbruck, Klagenfurt and Graz.

Vienna International Airport international vs. domestic capacity, seat share, (18-Apr-2016 to 24-Apr-2016)

Austrian Airlines has 45% of the total seat capacity

As might be expected seat capacity is dominated by Austrian Airlines, with 45% market share. No other airline exceeds 10% of capacity and the leading one is the low cost airline Niki, a subsidiary of airberlin, which itself lies third in the capacity order. Lufthansa, the parent (group) airline for Austrian Airlines, is fourth.

While mainland European low cost airlines have operated at Vienna for some years it is only fairly recently that British and European ones have chosen to do so to any degree. So the 2.4% capacity share held by easyJet, while small, is significant. Ryanair however continues to ignore Vienna in favour of Bratislava where it has an 83% capacity share.

Other LCCs that continue to avoid Vienna include Wizz Air (which works out of alternative airports surrounding Vienna such as Budapest and Bratislava) and Norwegian, which has a single route between Vienna and Oslo.

Vienna International Airport capacity seats, per week, system, all airlines, 18-Apr-2016 to 24-Apr-2016

One potential reason for this avoidance of Vienna by some LCCs is the level of charges. For that reason three of the peer airports have been compared with Vienna correspondingly, below.

Landing Charges (USD) for Vienna International Airport, Prague Václav Havel Airport, Munich Airport, Bratislava Ivanka Airport, 2014

On the strength of the data there is no indication that Vienna loses out because of excessively high landing charges. However, it must be carefully noted that these data deal specifically with landing charges only. For combinations of landing charges with terminal charges etc. the results may be different.

The chart below is of seat capacity distribution by region, with Western Europe by far the main one at 63%. Note, however, that Eastern and Central Europe account for towards a quarter of seats, 23.7%, hinting at the continuing capacity of the airport to act as an east-west hub (and to a lesser degree north-south).

The largest individual country market is Germany, which is four times the size of its nearest rival, Switzerland. North America, the Middle East and Asia remain comparatively small markets.

Vienna International Airport capacity seats by region, 18-Apr-2016 to 24-Apr-2016

A further chart presents this data as a ‘heat map’ which emphasises the capacity focus on Europe. Note the lack of capacity to/from Latin America, much of Africa and Australasia.

Vienna International Airport international capacity seats by region, ‘heat map’, 18-Apr-2016 to 24-Apr-2016

The airport’s current route network is shown here. The chart has been zoomed out to show the North American and Asian routes.

Nonstop connectivity – only one obviously weak area, but an important one

The chart below contrasts the peer group airports in terms of nonstop connectivity. Again the strength of Vienna in the European sector is made clear, with the second highest number of nonstop services after Munich, and only by 30.

Despite the fact that much of Africa is not covered, Vienna scores comparatively well on that continent, also in Asia Pacific. Again in the case of North America and the Middle EastVienna is the leading airport of the group after Munich.

The chart emphasises that Vienna’s one clear weakness is to Latin America; the lack of services there. While there are few strong connectors between that continent (South America) generally and Austria, Vienna’s importance as a hub for Central and Eastern European businesses (as described earlier) implies that the value of such (a) route(s) will likely to be under regular review.

Nonstop connectivity values of Vienna, Munich, Prague, Budapest and Bratislava departing airports for 18-Apr-2016 to 24-Apr-2016

Full service airlines account for 86% of seats

Vienna has a very high rate of full service/network airline seat capacity, which is partly explained by the reluctance (alluded to earlier) among budget airlines to operate out of there.

Vienna International Airport capacity seat share by airline type (system), 18-Apr-2016 to 24-Apr-2016

Here that traffic split is compared with the airport’s peer-competitors.

Comparison of selected airports by airline type – seat availability, 18-Apr-2016 to 24-Apr-2016  


% of seats on FSCs

% of seats on LCCs

% of seats on other modes (e.g. regional, charter airlines)

Clarification of previous column





Regional/commuter and charter

Budapest F Liszt Int





Prague V Havel




Charter and regional/commuter






Bratislava Ivanka





Bratislava is evidently an outlier here, with less than 3% of its capacity on FSCs. The most telling fact concerning the four other airports is that the percentage ratio of FSC capacity at Vienna is only marginally behind that of Munich, and it is considerably higher than at Budapest and Prague.

58% of Vienna capacity is on Star Alliance airlines

As the Lufthansa Group is a mainstay of the Star Alliance it is perhaps not surprising that 58% of seat capacity at Vienna is on Star Alliance services. Oneworld and SkyTeam are comparatively small and 17% of capacity is on unaligned airlines.

Vienna International Airport capacity seats share by alliance (system), 18-Apr-2016 to 24-Apr-2016

Business class seating ratio higher than at Budapest and Prague

A comparison can be made of the percentage of seats available in different classes (first, business, premium economy and economy) between airports and a worldwide average. The chart below is that comparison illustrated for the same peer group as before.

No particular conclusions can be drawn in this instance other than that none of the peer group airports apart from Munich offer first class seating, and even there it is only 0.3% of the total. Vienna’s business class seating is at a higher level than at Budapest and Prague, but a lower level than at Munich.

Vienna International Airport schedule by class of seat - one way weekly departing (airport comparison by seat type)

Operational waves are identifiable in the flight movements

The airport is sufficiently separated from built-up areas that a night curfew is not necessary. However, there is a voluntary limit on movements according to the provisions of a mediation agreement.

The effect of this limit can be seen in the chart below, which is for a typical day, Friday 22-Apr-2016.

Vienna International Airport seats per hour total system, all airlines, all terminals, all origins/destinations, typical day: Friday 22-Apr-2016

While this chart measures seat capacity available by hour (arriving and departing) it also acts as a log of slot activity. There is little activity between 2300 and 0600. On this particular day at least, two waves of arriving flights followed by departing flights can be observed; at 0800-1100 and 1600-1900, although there are lesser wave combinations at other times of the day.

The predominance of arriving (0800) and departing (2000) seats could be explained by long haul flights that are timed to integrate with the Eastern/Central European flights (and with others; Austrian Airlines also promotes connecting services from and to Western Europe).

This east-west hub concept is supported by the following chart, which demonstrates that almost two thirds of all seats are on flights of up to two hours in duration. Vienna’s position towards the geographical centre of Europe ensures that many cities fall within this flight time range.

Vienna International Airport seats by length of flight (system), 18-Apr-2016 to 24-Apr-2016

The final chart in this section contrasts flight stage lengths with frequencies. It is clear again that the vast majority of frequencies equate to the one to three hour flight length.

Vienna International Airport frequencies (system), 18-Apr-2016 to 24-Apr-2016

Steady, if undramatic, rise in passenger traffic

Passenger traffic has been rising steadily since 2013 to reach 22.8 million in 2015 (+1.3% on 2014). Figures suggest that average growth in the first three months of 2016 has been +2.3%.

Vienna International Airport,  annual passenger numbers, 2012 - 2015

Cargo – Asian airline dedicated freighters close behind Austrian Airlines in capacity

Almost all cargo handled at Vienna International Airport is international (99.1%). As indicated earlier there is a strong freight presence, and almost one third of cargo is on designated freighters.

The largest country market by payload is Germany, followed by China.

Vienna International Airport total international capacity cargo payload (kg) by country, 25-Apr-2016 to 1-May-2016

As might be expected, Austrian Airlines is the largest airline by payload but it is followed in size order by three Asian airlinesKorean Air, China Southern and Asiana – which collectively have over 25% of capacity.

All three have dedicated freighters serving Vienna and it is a focus city for Asiana Cargo and Korean Air Cargo.

Vienna International Airport total international capacity cargo payload (kg) by country, 25-Apr-2016 to 1-May-2016

Individually, and by some margin, the biggest route by capacity is Frankfurt.

Terminals and construction

There is only one terminal building as such at Vienna Airport, and also the stand-alone T1A for LCCs – the ideal hub scenario. The terminal is one that has been expanded extensively and it continues to be enlarged, including a Terminal 3 extension (formerly Skylink). There are three concourses, one of which is presently closed, and they are referred to as ‘terminals.’

Vienna Airport

Vienna Airport ‘terminal’ plan

According to the CAPA Airport Construction Database some USD1.3 billion has been allocated on infrastructure development at the airport through to 2018. This is being spent on renovation and expansion of its infrastructure, not including its planned billion-dollar third runway project.

Much of the expenditure is in Terminal 2, which is currently closed and undergoing a major refurbishment until 2023. It was used by numerous foreign airlines that have been temporarily relocated to other Terminals. The projects have a cost ceiling of USD500 million.

The costs for the terminal extension check-in 3 (formerly Skylink), which started operations in 2012, were less than EUR740 million.

The airport is considering the construction of a mid-field terminal.

The construction would cater for 50 million annual passengers compared with the 22 million being handled at present, with the airport currently having an annual capacity of 35 million passengers. 

Separately, the airport plans to expand its cargo centre. The EUR16 million project includes construction of a 13,000sqm airfreight logistics facility and is expected to be complete by autumn 2017.

Ownership and privatisation

Vienna Airport was one of the first in Europe to undergo privatisation when Vienna International Airport was listed on the Austrian Stock Exchange in 1992, in the ratio of 52.14% held by the central, state and city authorities and 46.7% held privately. Subsequently the Austrian government decided (2001) to divest its remaining (17%) stake.

Flughafen Wien, the parent company, has been an investor in other airports but lately it has relinquished some of its investments and found itself to be the subject of a hostile takeover by the Australian fund IFM in 2014, which currently holds 29.9% of the equity.  The free float has also reduced, to 20.1%.

In Mar-2016 the Australian private-equity investment company IFM Global Infrastructure Fund offered to pay a 21% premium to increase its stake in Vienna International Airport as it sought stable income from infrastructure operators, amid a drop in interest rates. IFM offered to pay EUR100 per share to lift its holding in Flughafen Wien AG to 39.9%.

The Austrian Takeover Act requires Flughafen Wien to publish a detailed written statement including its recommendation to accept or reject the offer, once the offer is officially published. IFM’s other investments include eight Australian Airports and the Manchester Airports Group.

Along the way Flughafen Wien has disposed of its interests in Friedrichshafen Airport and has (Mar-2016) agreed to acquire SNC Lavalin Invest's indirect stake in Malta International Airport (MIA). SNC Lavalin Invest subsidiary SNCL Malta has a 38.75% stake in Malta Mediterranean Link Consortium Limited (MMLC), which has a 40% interest in MIA. The acquisition brings the Flughafen Wien AG stake in MIA to more than 48% and the stake in MMLC to more than 95%.

The airports that Flughafen Wien is now involved with, other than Vienna International Airport, are therefore Malta, Kosice (Slovakia) and Odessa, Ukraine.

Vienna International Airport ownership as of 25-Apr-2016

Summary & Conclusions

  • While Austria’s economy has been quite weak recently the country has always been at the centre of trade between eastern and western Europe, and many Eastern European countries have their headquarters in Vienna. This helps to perpetuate business travel to, from and via Vienna and the city remains a top conference destination.
  • Vienna International Airport competes openly for pre-eminence among a trio of capital city airports in the region for both O&D and transfer traffic, namely with Budapest and Prague airports. Munich Airport is also a major competitor for traffic from the western half of Austria. Bratislava Airport competes with Vienna as a major centre for LCCs, but not in any way as a hub.
  • Vienna has the upper hand in its battle with Budapest and Prague airports, as measured by relative size.
  • Vienna is not far behind Munich in terms of the total number of airlines and international airlines operating at the airport, and has a very high reading in nonstop freight destinations; the highest of the peer group.
  • Airline seat capacity has been slowly rising over the last two years and passenger traffic has also been on the increase since 2013, at a low single digit rate.
  • Austrian Airlines is the dominant airline with 45% of seat capacity. LCCs have a mixed profile operating there, possibly influenced by their reaction to charges. EasyJet has a small capacity share of 2.4%, but airlines such as Ryanair and Wizz Air continue to avoid it and Norwegian has only a single route.
  • The largest individual country market by capacity is Germany, whose market is four times the size of second placed Switzerland.
  • The one clear gap in the route network is to Latin America.
  • The percentage of full service airline (FSC) capacity at Vienna is high in comparison with its direct rival airports, and is not that far behind that of Munich.
  • Star Alliance dominates the airline alliance landscape.
  • The business class seating ratio is higher than the peer airports, except in the case of Munich;
  • A chart of seat capacity by arriving/departing flights suggests two main waves of connecting traffic –o ne in the morning the other in the late afternoon/evening – with lesser wave combinations at other times of the day.
  • While Austrian Airlines has the greatest cargo payload capacity, there are three Asian airlines – two of them with dedicated freighters – which collectively are not far behind.
  • Most tourists – over 45% – come from Germany, but China has crept up to sixth place, overtaking the US and France.
  • USD1.3 billion has been allocated on infrastructure development at the airport through to 2018. This is being spent on renovation and expansion of its infrastructure, not including its planned billion-dollar third runway project. Much of the expenditure is in Terminal 2. The airport is considering the construction of a mid-field terminal and plans to expand its cargo centre.
  • Flughafen Wien is partially privately held, although there are some remaining public sector shareholders (the City, the Province and employees: collectively 50%). The Australian fund IFM took 29.9% of the equity in 2014 and has recently offered to increase that holding to 39.9%, which would make it as big as the holding of the City and Province combined. Separately, Flughafen Wien has disposed of its interests in Friedrichshafen Airport and has agreed to acquire SNC Lavalin Invest's indirect stake in Malta International Airport, thus increasing its overall ownership there.

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