Low Cost Monitor 1/2013

Low Cost Monitor 1/2013 - An Analysis performed by DLR - LCC Routes 423 Routes The current Low Cost Carrier Market in Germany Spring 2013

Current Low Cost Carrier Market in Germany in 2012/2013 The Low Cost Carrier (LCC) market has been an inherent part of the German air transport market for several years. Published by DLR twice a year, the Low Cost Monitor informs on LCC s essential features and current developments in this market segment, particularly with reference to the number and relative importance of Low Cost Carriers, their supply including air fares, and the passenger demand for Low Cost transport services. The offers reflected by the current Monitor are based on one reference week in the winter flight schedule 2013. The passenger figures relate to the whole year of 2012. Airlines The airlines involved in the Low Cost business design their offers quite differently. Due to this inhomogeneity only a few distinctive criteria can be defined for the Low Cost market segment, such as low fares, general availability and direct sale via the internet. Thus, in some cases, a certain scope of discretion arises when allocating an airline to a LCC segment. Furthermore, amalgamations of business models are seen in several airlines that further complicate the accurate assignment to the Low Cost market. In this Monitor issue, the authors currently identify 21 airlines (among all airlines operating on German airports) providing completely or partly LCC services. These are in detail (see also Table 1): Aer Lingus (EI) (www.aerlingus.com), Fleet: 37 Aircraft (A320: 32, A321: 3, A319: 2) Air Arabia Maroc (3O) (www.airarabia.com), Fleet: 4 Aircraft (A320: 4) Air Baltic (BT) (www.airbaltic.com), Fleet: 26 Aircraft (B737: 14, F50: 4, D8: 8) Air Berlin (AB) (www.airberlin.com), Fleet: 91 Aircraft (A319/20/21: 36, B737: 55) Air One (AP) (www.flyairone.com), Fleet: 10 Aircraft (A320: 10) Blue Air (JOR) (www.blueair-web.com), Fleet: 8 Aircraft (B737: 8) Corendon (7H) (www.corendon.com), Fleet: 4 Aircraft (B737: 4) Easyjet (U2) (www.easyjet.com), Fleet: 187 Aircraft (A319: 138, A320: 49) flybe (BE) (www.flybe.com), Fleet: 66 Aircraft (D8: 43, E: 23) Germanwings (4U) (www.germanwings.com), Fleet: 34 Aircraft (A319: 34) Intersky (3L) (www.intersky.biz), Fleet: 4 Aircraft (D8: 3, ATR: 1) Jet 2 (LS) (www.jet2.com), Fleet: 43 Aircraft (B737-300: 32, B757-200: 11) Niki (HG) (www.flyniki.com), Fleet: 24 Aircraft (A319/A320/321: 19, E: 5) Norwegian (DY) (www.norwegian.no), Fleet: 72 Aircraft (B737: 72) Ryanair (FR) (www.ryanair.com), Fleet: 305 Aircraft (B737: 305) Transavia (HV) (www.transavia.com), Fleet: 26 Aircraft (B737: 26) Transavia France (TO) (www.transavia.com), Fleet: 8 Aircraft (B737: 8) Vueling (VY) (www.vueling.com], Fleet: 57 Aircraft (A320: 57) Wizz (W6) (www.wizzair.com), Fleet: 37 Aircraft (A320: 37) Wizz Ukraine (WU) (www.wizzair.com), Fleet: 3 Aircraft (A320: 3) WOW (X9) (www.wowair.com), Fleet: 3 Aircraft (A320: 3) (A: Airbus, B: Boeing, C: Canadair, D: Dash, E: Embraer, F: Fokker, MD: B/McDonnell, S: Saab) Flights offered by Condor are not considered in this analysis, although this airline also offers a number of cheap flights. But an unambiguous assignment to the Low Cost sector is considered to be very difficult because only selected flights can be booked directly and at low prices. This contradicts the very idea of Low Cost Carriers according to which all flights (or at least the bulk of the seat quota) should be available for booking online at a low price that is generally available and referring mainly to the actual advance booking period, respectively to the day of travel as well as to the booking situation. In the broad sense, Lufthansa flights of the Better-Fly segment would have to be taken into consideration as well, but even here exists only a strictly limited seat quota. An unambiguous assignment is not possible. The airline Air Berlin, who is running several business models, is one of the grey area. For this former charter airline, who has intervened early in the Low Cost market by launching the segment Cityshuttle, the identification of Low Cost routes has become much more complicated due to the acquisition of DBA and Gexx and LTU as well as through cooperation with the airline Walter (LGW) and joining the Oneworld airline alliance. Thus, only the presently existing Low Cost routes served by these airlines as well as the corresponding ones are being considered, but not the flight routes to typical holiday destinations like North Africa or other intercontinental connections. Some time ago, Air Berlin has newly added some city links previously operated by TUIfly, some of which, however, have already been ceased again in the meantime. 2

In total, when compared to last winter, the number of Low Cost Carriers operating in the German market has remained almost constant. While Iceland Express has ceased operations, their routes have been taken over by the newly established WOW air in 2012. Bmibaby has also ceased operation in 2012. Compared to last winter Transavia (France) is new. The fleet size has remained relatively the same with most airlines. Only with Ryanair, there was a significant increase of 12 aircraft over the previous spring. Thus, Ryanair has 305 aircraft of the type 737-800 with just under 190 seats each, making up a total now of a similar number of aircraft such as Germany's largest airline Lufthansa (Lufthansa and Lufthansa CityLine: 348). Air Berlin, however, reduced the number of operating aircraft from 128 to 91 aircraft in the B737 and A319/320/321 classes. Easyjet, being the second largest Low Cost company in Europe, has been owner for some time now of a relatively constant number of 187 aircraft of the type A319/A320, Germanwings of about 34 aircraft of the same type. Carrier Ranking (s. Tab. 1): Based on the number of flights (departures) in a week in January 2013, Air Berlin - with their Low Cost segment having almost 1,600 departures - is by far the largest Low Cost Carrier in Germany. Their air traffic is slightly above the previous year. However, the number of routes has been reduced by approximately 14 %. This trend is, among other reasons, based on Air Berlin s comprehensive programme of capacity reduction, including also their withdrawal from several regional airports. Whereas during the past years until 2008 high yearly growth rates have been achieved in the Low Cost sector, a reversal already indicated in summer 2008 when the growth rates dropped distinctly. This decline continued until summer 2009. After a further consolidation phase, positive growth rates were seen again for most airlines since the beginning of the year 2010 - a trend that continued also in summer 2010. Since early 2011, however, there is a new decrease in the number of take-offs offered. In July 2011, these values were lower by 11% compared to the year of 2010, an effect caused partly by the implementation of the air traffic tax in Germany as of 1 st January 2011. This trend appears after a sharp decline in 2012 to initially slow down, because with about 3,500 flights in a week in January 2013 a similar number of flights were offered as in 2012. According to the ranking, Germanwings (746 flights) and Ryanair (343 flights) follow. As one of the few airlines, Germanwings has increased its range of flights over the previous year. Here, the first effects have been identified prior to the "New Germanwings" that are supposed to take over the decentralized services of Lufthansa Europe from summer 2013 onwards. Consequently, there is a significant reduction in flights from Munich. Furthermore, a shift of the flights took place in Berlin, from Schönefeld to Tegel, the offer in Stuttgart has been greatly increased from 140 to 221 flights per week and Bremen was newly included in the flight plan. As opposed to this, for Ryanair, the trend observed since the beginning of 2011 to reduce flight offers in Germany is continuing further. After the company was able to increase the number of flights at a high level throughout the economic crisis 2008/2009 while almost all other Low Cost Carriers have reduced their flight offer during this period all domestic flights served by Ryanair have been discontinued in March 2011. Also on the other routes, Ryanair reduced their offer in Germany in 2011 and 2012 by 30 % each year. A major cause was, according to Ryanair, the introduction of the German air traffic tax. This spring, a further decline in Ryanair s flight offer of around 10% is observed. Here, however, the number of routes remained constant, as opposed to Air Berlin. Easyjet also declined their flight offer again in spring 2013, offering four routes less than the year before. The expansion of the number of flights in Berlin is facing decline in the flight offers on almost all other locations in Germany, particularly in Dortmund. Places 5, 6 and 7 are held by the Austrian airline Intersky, the Hungarian airline Wizz and Aer Lingus the acquisition of which Ryanair is interested in. But so far this has been banned by the EU because the proposed merger threatened competition. Flybe has fallen to 8 th place, because the offer was reduced by about 25 %. The flights of all other Low Cost Carriers are well below 50 flights per week. LCC Market Shares (s. Fig. 1): The six largest of the 21 Low Cost Carriers currently account for around 92 % of the German market. Air Berlin alone accounts for about 47 % of all flights. In the market share ranking follow Germanwings with 21 %, Ryanair with 10 % and Easyjet with 9%. Transport Services Routes (s. Tables 1 and 2 as well as Fig. 2): Viewed broadly, the Low Cost airlines operated 423 different routes in one week in January 2013 in domestic and cross-border air traffic. These are about 30 routes less than in the spring of 2012, equivalent to a decline of almost 7%. After growth in 3

the last summer period, the tendency observed since 2011 to reduce the number of routes continues in the winter months. The number of flights has also decreased slightly by 0.4% compared to the previous year. While, since the emergence of the Low Cost market more than 10 years ago, about 100 new routes have been added annually in the first 6 years, pointing in the summer of 2008 to a crisis in the world economy and aviation, as only about 50 new routes of LCC traffic have been opened up. In spring 2009 there was the first time a decline over the same period, but in the summer of 2009, a positive growth path appeared again. In the summer of 2010, there was the former record with 675 different routes. The climax was reached in the winter of 2011, with 507 different routes. Although the financial and economic crisis seems to be complete in Germany (that some companies have survived better and others worse) but with the introduction of air traffic tax there is a new braking effect. After the crisis, some smaller companies have been removed from the market, but Ryanair in this period between spring 2008 (94 routes) and spring 2011 (139 routes) continued to expand the network with a total of 45 additional routes. After reducing the number of routes in 2012 to 107, it stagnated at this level in 2013, despite the addition of the Cologne airport into Ryanair's route network in this period. From March 2013, flights from Dortmund and Nuremberg are also planned, and also from Münster / Osnabrück in future. After Easyjet has slightly expanded its route network in the spring of 2012, there are new declines in 2013. Germanwings also reduced the network significantly, especially in Hanover and Berlin, with a slight increase in Stuttgart. It should be noted that in the German domestic traffic a route is taken into account twice (e.g. in execution MUC-DUS and in the return direction DUS-MUC). Air Berlin continued the reduction of the network that began in 2011. So, this year about 14 % fewer routes are available than last year. After more and more intra-german routes have been introduced in recent years by Air Berlin, Germanwings, Ryanair and Intersky, the reduction of the German domestic routes that started already in 2011 has continued by -17 % over the previous year. Competition: Direct competition between carriers in the Low Cost range is still very low. Only on 18 (4.1 %) routes out of 441 are two competing providers. There are few routes with two or more providers. 405 routes and thus the vast majority are operated solely by one Low Cost air company. Flights (s. Table 1): A total of approximately 3,500 flights were carried out by the Low Cost Carriers in one week in January 2013, one year before there were 15 more flights. The number of flights is thus decreased by 0.4 %. In contrast to this, the number of seats has increased by 0.9 %. The number of routes has fallen by 5 %. This means that the network was reduced with a slight increase of available seats and a stagnation of the frequencies. Seats (s. Table 1): At 3,507 flights 153 seats per flight were offered on average, a slightly higher number than the year before (151 seats). It appears that now a typical average aircraft size of 150 seats has established at Low Cost Carriers. However, it is Ryanair, the largest Low Cost Carrier, with the B737-800 aircraft that makes exclusively use of significantly greater seating capacity (189 seats). These flight-specific seating capacities are thus well above those of the traditional European scheduled airline services. In terms of fleet composition of the individual companies it is clear that increasingly smaller device is decommissioned. Typical aircraft are Airbus series 319/320 and Boeing 737. Only a few companies such as Intersky or flybe have smaller propeller aircraft in their fleets. Destinations (s. Table 2): The countries of destination ranking reveals the high market share of German domestic traffic: 46% of all departures of Low Cost Carriers from German airports are offered on this market, but with around 78 routes (equivalent to 39 airport pairs) it accounts only for about 18% of all routes. On average, 21 Low Cost flights per week have being on a route in the German domestic air traffic, a much higher value than in the summer months, when only 16 flights per week were offered on one route. In the winter months, with around 350 and 250 flights Great Britain and Spain are ranking second and third. Italy is ahead of Austria and Switzerland in fourth place. Then, the following are the ranks 7 to 9 held by Ireland, Poland and Sweden, in front of Denmark and Latvia. Here, a decrease in the Low Cost offerings from the previous year is to be noted, particularly flights within Germany and to the UK and Austria. But the decline has inter alia also administrative reasons, for example a stricter pricing policy, as all, Germany, the UK and Austria collect an air traffic tax. In consequence, several companies have reduced their offerings in these markets. Overall, the Low Cost Carriers from Germany currently serve destinations in 36 countries. An expansion is apparent in some Mediterranean countries and Eastern Europe. New additions to the previous year are Tunisia and Macedonia. 4

Airports (s. Fig. 3): Only a subordinate role plays Frankfurt, Germany's busiest airport, due to its distinct function as a hub in the traditional scheduled air transport and the full capacity utilization in Low Cost traffic in the spring of 2013. Thus, only 72 flights (around 2%), particularly by Air Berlin and Niki were carried out in the Low Cost market. Cologne / Bonn with 376 starts (equivalent to 67% of the local air volume) shows a number of flights that is lower by around 3% over the previous year. Most (628) Low Cost flights are offered in Berlin-Tegel, that have increased by 35%, and they mostly result from the relocation of the Germanwings flights from Schönefeld to Tegel. While the Low Cost share in Schönefeld is around 79%, in Tegel it is 46%. Although the Low Cost traffic has decreased on some German airports, such as Berlin-Schönefeld (including relocation of Germanwings to Tegel), Munich (e.g. reduction of Germanwings), Dortmund (e.g. reduction of Easyjet), Hanover (e.g. reduction of Germanwings) or Hamburg (e.g. reduction of Easyjet), the LCC traffic was able to grow in Berlin-Tegel by around 150 flights per week (relocation of Germanwings). Even airports that suffered declines in recent years, such as Bremen, Stuttgart and Lübeck, show growth again this year. However, this does not apply to airports strongly aligned to Ryanair such as Hahn or Niederrehin, where, although the number of routes has remained almost constant, the number of flights has decreased during the winter months. With a share of over 90% on regular scheduled services, Low Cost traffic is almost exclusively carried out at the airports Niederrhein, Dortmund, Lübeck, and Hahn. This applies in a somewhat weaker form also to the airports Karlsruhe-Baden/Baden and Memmingen. Air Fares Average Fares The air fares offered by the major Low Cost Carriers in Germany are considerably varying depending on destination and booking period. The prices publically quoted by the carriers are often net prices, normally not including any fees, taxes or other surcharges. Thus, they are not meaningful. In order to allow for statements on final prices, the prices for LCC flights on 60 selected routes have been determined and evaluated for 4 different points of time (advance booking periods of one day, one week, one month and three months). The selection of routes corresponds to a representative sample of around 10 % of all LCC routes operated in spring 2013. The relatively consistent selection of routes allows for a comparison with the results of the preceding analyses. This time, the 22 nd of April 2013 was selected as the posting date. The average prices determined on all routes and booking times for a flight vary by carrier in the spring of 2013. With most airlines it is between 40 and 90 at the net prices and from 60 and 120 at gross prices. The difference between net and gross prices amounts to around 7 in the best case, and to 65 in the worst case. Meanwhile, many airlines do not show their net fares any more. In spring this year - like every year - the average fares have partly increased compared to autumn. But an increase in ticket prices over the last spring is also noted in most airlines. Furthermore, it hs to be considered that expensive companies have better service sometimes (e.g. free drinks or magazine). Average Prices related to Booking Period Air fares of a Low Cost Carrier vary greatly with the period between flight booking and flight: A flight taking place on the following day after booking can cost many times a flight that is only performed three months after the booking. However, this breadth does not seem to be as pronounced as before. The average gross prices of the major Low Cost Carriers in Germany vary between 80 and 180 for a flight with an advance booking of only one day and between 60 and 100 for a flight that will take place until three months after the booking date. However, the figures say nothing about the number of tickets actually sold at these prices because there is no reliable information on how many of the seats to the respective tariffs have been sold. A detailed analysis of Low Cost Carriers air fares in Germany can be found on the DLR website (www,dlr,de/fw). Passenger Demand In the first half of 2012, in total 95.1 million passengers were counted on the 26 international and regional airports. Thereof, 28.8 million departing and arriving passengers are to be allocated to the Low Cost segment (s. Table 3). This corresponds to a share of 30.3 %. The proportion varies greatly between the airports. For the hub airport Frankfurt the LCC-percentage is the lowest (2 %), whereas the Low Cost Airports Hahn, Lübeck and Niederrhein are almost exclusively characterized by this air traffic segment. Also the airports Berlin-Schönefeld, Cologne / Bonn, Dortmund, Karlsruhe / Baden-Baden, Friedrichshafen and Memmingen mainly feature these Low Cost services. 5

After the decline in traffic in the year marked by the financial and economic crisis (2008 / 2009), air travel has rebounded since 2010, but passenger traffic is still low in Germany in 2012. It increased only by 1 % over the previous year. As for the determination of the demand for Low Cost traffic has been resorted to data of MIDT of Sabre, which are not necessarily compatible with the data the airlines have provided in previous years, a statement as to the growth in passenger demand in this segment can only be made to a limited extent. Taking the available data sources in both, the supply and the demand side, together, one may conclude that the number of passengers carried in Low Cost passenger transport in 2012 compared to 2011 is almost constant. In contrast to this stands a simultaneous increase of the total German air traffic by 1 %. Thus, the proportion of passengers carried on Low Cost flights has declined by 0.2 percentage points. Based on the original domestic demand (excluding transfer traffic) the LCC suppliers show high to very high market shares for domestic flights (s. Table 4) on most other airports with the exception of the airports of Frankfurt and Bremen airports. Overall, about 43 % of the passengers are transported in domestic traffic on flights of Low Cost Carriers. This is a similar level as last year. At the airport Berlin-Schönefeld almost the entire demand is met by Low Cost offers. In contrast, the intra-german Low Cost offer has been fully abandoned at airports such as Niederrhein (since 2011). At the airport Berlin-Tegel, the LCC share is indeed only about 47%. But this airport has more than 3.4 million passengers - one of the highest numbers in the LCC area. The current Low Cost Carrier Market in Europe Besides the detailed analysis of the German Low Cost Carrier market, the main features of the European LCC-market are also described here. In addition to the airlines already operating in the market, further airlines can be allocated to the German Low Cost Carrier market. However, the number of those airlines is increasing, that are involved in the classical regular and charter flights as well as in the pure Low Cost segment, such as Air Berlin in Germany. Hence, the distinction between traditional airline carriers, holiday airlines and Low Cost Carriers becomes increasingly complicated. Consequently, this analysis cannot be considered to be complete, but it is intended to approximately inform on the extent and structure of the European Low Cost market. Besides the airlines operating in the German market the following are actors in the European market: Air Italy (I9) (www.airitaly.it), Fleet: 10 Aircraft (B737: 7, B767: 3) Blu Express (BV) (www.blu-express.com), Fleet: 3 Aircraft (B737: 3) Cerendon Dutch (CND) (www.cerendon.com), Fleet: 2 Aircraft (B737: 2) Flybaboo (F7) (www.flybaboo.com), Fleet: 3 Aircraft (D8; 2, E190: 1) Iceland Express (5W) (www.icelandexpress.com), Fleet: 2 Aircraft (A320: 2) Meridiana (IG) (www.meridiana.com), Fleet: 17 Aircraft (A320: 7, MD82/83: 10) Volare (VA) (www.volareweb.com), Fleet: 1 Aircraft (A320: 1) To an increasing extent also non-european Low Cost Carriers serving Europe are entering the market. These are among others: Flydubai (FZ) (www.flydubai.com), Fleet: 28 Aircraft (B737: 28) In total, compared with the previous year, the number of Low Cost airlines operating in Europe has decreased slightly. The airline bmybaby has ceased their operations in September 2012 and the Icelandic company Iceland Express has been adopted by WOW. Also, Flybaboo no longer flies under its own name but has been adopted by Darwin Airline. The Malaysian long-haul Low Cost Carrier Air Asia X has withdrawn from Europe altogether, due to the increased costs. Ryanair is the major European Low Cost airline with 7,000 departures in January 2013 (s. Table 5). This represents a decline of nearly 4% over the previous year. The second largest air company is Easyjet with 6,100 starts. Easyjet could increase the flight offer in Europe by around 50 flights. While at Ryanair only 4 routes are newly added, Easyjet extended the network to 28 routes. With a large gap in the ranking follow the flights offered by flybe that reduced their offer by 7% to around 2,800 flights. Owing to the reduction of flights offered, Air Berlin s Low Cost segment with approximately 2,360 departures per week is now behind Norwegian that could increase their number of flights to over 200 flights per week. Air Berlin is now only number 5 in the Low Cost Carriers group in Europe. Aer Lingus and Vueling also extended their flight offers and are with about 1,500 flights on ranks 6 and 7. With a number of 1000-1300 weekly flights Wizz and Germanwings keep a similar level as in 2012. Here, the consolidation in the field of Low Cost Carriers continues. While companies such as Clickair have been integrated in larger Low Cost Carriers such as Vueling, others, such as Air Italy have been taken over by former national carriers such as Alitalia, and still others as Windjet had to sign up bankruptcy in August 2012. While smaller companies are increasingly disappearing from the market, larger ones such as Ryanair are not able any more to expand their offering, but some have also experienced declines of 3-4 %. Also, 6

owing to a general slight decrease in Low Cost air transport in Europe, Ryanair was able to maintain their market position by 24 % this year. Thus, for the first time since 2009 a decrease in the number of the routes at European level is noted again, this year of -1.5 % compared to the observation period of 2012. This decline is far below the value of Germany, where after growth a decrease of 6% is noted in recent years. With reference to the flights offered, the decline of around 3 % in Europe is somewhat higher than in Germany with 0.4 %. One reason for this is that in Europe the flights heading to the target areas Italy and Spain decreased, but when the last winter half-years are compared, this is not the case if departing from Germany. Great Britain is still considered to be a source and destination country number one for Low Cost flights (see Table 6) with nearly 7 thousand starts per week. In the spring of 2013, the network of this country includes more than 800 routes across Europe, including the national traffic. Again, the number of routes has fallen here by 2 %, which is well within the range of the general decline of Low Cost routes from 3 % in Europe in the current observation period. Further down the list of offered flights follow Italy, Spain and Germany with each slightly more than 3,500 flights. On ranks 5-7 are France, Norway and Ireland with more than 1,000 flights. Out of the total of more than 4,400 different routes, over 4,000 (91 %) are served by just one Low Cost Carrier. Only about 360 flight routes are served by two, and 11 routes by more than two Low Cost Carriers being in the state of competition. This means that even in Europe, the direct competition of Low Cost Carriers serving the same routes is relatively low. Barcelona is now, with approximately 1,100 LCC departures per week in January 2013 is (+4.5%), due to a strong expansion of flight services by Ryanair or Vueling, the largest European Low Cost Carrier airport (see Figure 4). The London Gatwick airport (1,046 starts) and Dublin airport (943 starts) follow behind. London Stansted being London's second airport is in 4 th place with 916 starts. London s third airport London Luton has 460 starts and is ranking 13 th. Thus, in total, over 2,400 Low Cost flights are available from all London airports, more than in any other agglomeration of Europe. Berlin-Tegel with 628 starts is number 5. Among the 30 largest Low Cost Carrier airports in Europe are Düsseldorf (rank 17), Cologne / Bonn (rank 19), Stuttgart (rank 22), Munich (rank 26) and Berlin-Schönefeld (27), and some other airports having more than 300 Low Cost Carrier starts per week. It is noted that at German airports with Low Cost offers particularly Berlin-Schönefeld worsened from 20 th to 27 th place in the ranking, if compared within Europe and to spring 2012. This is, inter alia, due to the strong reduction in flight offers of Germanwings and Ryanair in Berlin-Schönefeld. In contrast, Berlin-Tegel has improved from 16 th to 5 th place, among others due to the relocation of Germanwings flights from Schönefeld to Tegel. On European routes, the Low Cost Carrier market has kept its 25 % share of the flights in the winter months (Fig. 5). 75 % of flights are mainly carried out by traditional scheduled airlines and holiday charters. Another part of the market is served by smaller regional airlines, but in most cases in cooperation with a large air company. 7

Low Cost Carrier Market in Germany 01/2013 01/2012 Change (%) Rank Airline Departure Seats Routes* Departure Seats Routes* Departure Seats Routes* 1 Air Berlin 1,660 254,606 122 1,650 248,886 142 0.6 2.3-14.1 2 Germanwings 746 107,424 84 715 102,960 91 4.3 4.3-7.7 3 Ryanair 343 64,827 107 383 72,387 107-10.4-10.4 0.0 4 Easyjet 322 52,344 44 328 51,864 48-1.8 0.9-8.3 5 Intersky 74 4,428 7 75 4,050 8-1.3 9.3-12.5 6 Wizz 68 12,240 23 75 13,500 20-9.3-9.3 15.0 7 Aer Lingus 55 9,570 7 53 9,222 7 3.8 3.8 0.0 8 flybe 50 3,896 7 68 5,228 9-26.5-25.5-22.2 9 Norwegian 45 8,464 11 43 7,594 9 4.7 11.5 22.2 10 Air Baltic 42 3,921 5 45 3,602 5-6.7 8.9 0.0 11 fly Niki 29 4,086 2 30 3,954 2-3.3 3.3 0.0 12 Vueling 20 3,600 3 13 2,340 1 53.8 53.8 200.0 13 Wizz (Ukraine) 16 2,880 5 16 2,880 4 0.0 0.0 25.0 14 Transavia 12 1,528 4 5 738 2 140.0 107.0 100.0 15 Air One 6 888 1 0 0 0 - - - 16 Jet2 6 888 1 6 888 1 0.0 0.0 0.0 17 Corendon 4 676 4 7 1,155 5-42.9-41.5-20.0 18 Blue Air 3 486 1 2 310 1 50.0 56.8 0.0 19 Air Arabia Maroc 2 324 1 2 324 1 0.0 0.0 0.0 20 Transavia (France) 2 372 1 0 0 0 - - - 21 WOW 2 300 1 0 0 0 - - - Total: Table 1: 3,507 537,748 441 3,522 532,736 465-0.4 0.9-5.2 Low Cost Carrier ranking according to the number of flights performed (during one week in January, domestic routes are counted twice, within Europe only in one direction), *Routes served by several carriers are counted twice, Figure 1: Low Cost Carrier market share in Germany (according to number of flights performed during one week in January 2013) 8

Low Cost Carrier Market in Germany 01/2013 01/2012 Change (%) Rank Destination Departures Seats Routes Departures Seats Routes Departures Seats Routes 1 Germany 1,630 239,744 78 1,631 235,595 94-0.1 1.8-17.0 2 Great Britain 349 51,167 43 366 53,171 48-4.6-3.8-10.4 3 Spain 251 45,095 64 246 43,806 62 2.0 2.9 3.2 4 Italy 249 40,090 65 238 37,459 66 4.6 7.0-1.5 5 Austria 233 34,130 19 240 33,520 21-2.9 1.8-9.5 6 Switzerland 123 20,082 8 129 20,334 10-4.7-1.2-20.0 7 Ireland 68 12,027 10 67 11,868 10 1.5 1.3 0.0 8 Poland 62 9,410 14 51 8,844 12 21.6 6.4 16.7 9 Sweden 55 9,246 11 53 9,210 12 3.8 0.4-8.3 10 Denmark 49 7,508 5 30 4,452 4 63.3 68.6 25.0 11 Latvia 47 4,866 7 54 5,303 8-13.0-8.2-12.5 12 Norway 47 8,278 10 51 8,378 10-7.8-1.2 0.0 13 Russia 46 7,300 7 73 12,450 10-37.0-41.4-30.0 14 France 43 7,446 7 37 6,132 7 16.2 21.4 0.0 15 Hungary 43 6,436 6 22 3,396 6 95.5 89.5 0.0 16 Portugal 25 4,494 8 25 4,482 7 0.0 0.3 14.3 17 Belgium 23 3,444 2 10 1,560 1 130.0 120.8 100.0 18 Romania 19 3,294 7 22 3,694 8-13.6-10.8-12.5 19 Morocco 18 3,219 8 15 2,763 6 20.0 16.5 33.3 20 Serbia 18 2,736 10 25 3,780 12-28.0-27.6-16.7 21 Finland 17 2,802 3 24 4,083 5-29.2-31.4-40.0 22 Netherland 16 2,486 3 23 3,510 4-30.4-29.2-25.0 23 Ukraine 16 2,880 5 16 2,880 4 0.0 0.0 25.0 24 Greece 13 2,004 4 14 2,160 5-7.1-7.2-20.0 25 Croatia 12 1,728 4 14 2,040 5-14.3-15.3-20.0 26 Lithuania 10 1,872 4 10 1,872 3 0.0 0.0 33.3 27 Bulgaria 6 1,080 2 11 1,926 4-45.5-43.9-50.0 28 Czech Republic 6 864 1 6 864 1,0 0.0 0.0 0 29 Macedonia 4 720 2 0 0 0 - - - 30 Bosnia 3 432 2 2 288 1 50.0 50.0 100.0 31 Israel 2 288 1 2 288 1 0.0 0.0 0.0 32 Iceland 2 300 1 2 296 1 0.0 1.4 0.0 33 Tunisia 1 144 1 0 0 0 - - - 34 Turkey 1 136 1 5 820 3-80.0-83.4-66.7 35 Cyprus 0 0 0 2 378 1-100.0-100.0-100.0 36 Estonia 0 0 0 6 1134 2-100.0-100.0-100.0 Total 3,507 537,748 423 3,522 532,736 454-0.4 0.9-6.8 Table 2: Country of destination ranking according to number of flights (data are valid for one week in January 2013; within Germany both directions of one route are considered) 9

495 507 454 Figure 2: 423 Development of the LCC route network on German airports Flights / Week Number of Departures LCC Flights / Week Airport Figure 3: Passenger flights offered on German airports per week in January 2013 10

Low Cost Carrier Market in Germany Airport Total Passengers in 2012 (in thousand) Percentage % Share of total LCC LCC TXL 18,154 8,362 46.1 DUS 20,808 7,635 36.7 CGN 9,259 6,584 71.1 MUC 38,217 6,081 15.9 SXF 7,083 5,900 83.3 HAM 13,678 4,885 35.7 STR 9,683 4,505 46.5 HHN 2,650 2,649 100.0 HAJ 5,264 2,312 43.9 NRN 2,207 2,207 100.0 NUE 3,571 1,880 52.7 DTM 1,897 1,839 97.0 FRA 57,274 1,687 2.9 BRE 2,442 1,373 56.2 FKB 1,278 1,267 99.1 DRS 1,871 860 46.0 LEJ 2,090 764 36.5 FMM 732 732 100.0 FMO 1,013 657 64.9 PAD 864 418 48.3 FDH 540 386 71.5 LBC 332 332 100.0 SCN 387 213 55.0 RLG 126 83 66.0 ERF 176 79 44.8 ZQW 104 2 1.5 Total: 201,700 64,263 31.9 Table 3: Low Cost passenger traffic according to airports and the share of total in the year of 2012 (References: ADV, Sabre, DLR) 11

Airport Low Cost Carrier Market in Germany Passengers in German domestic flights in 2012 (in thousand) Percentage % Share of total LCC MUC 3,716 38.6 TXL 3,438 47.9 CGN 2,276 70.3 DUS 2,257 50.0 HAM 2,199 41.2 STR 1,770 60.2 NUE 744 56.3 SXF 693 99.1 DRS 518 45.5 HAJ 491 41.1 FRA 489 7.5 LEJ 261 38.3 FKB 254 99.5 FMO 201 45.8 DTM 172 99.8 FDH 161 66.2 SCN 159 65.0 RLG 67 71.7 BRE 64 7.9 FMM 33 99.6 PAD 28 19.6 ERF 3 40.6 ZQW 2 34.5 HHN 1 99.9 LBC 0 0.0 NRN 0 0.0 Total: 20,151 43.0 Table 4: LCC passengers on German domestic flights, according to airports and LCC share in the year of 2012 (References: ADV, Sabre, DLR) 12

Low Cost Carrier Market in Europe 01/2013 Rank Airline Departures Seats Routes 1 Ryanair 7,066 1,335,474 1,517 2 Easyjet 6,110 988,920 835 3 Flybe 2,808 200,504 258 4 Norwegian 2,392 444,544 368 5 Air Berlin Euro Shuttle 2,366 369,266 232 6 Aer Lingus 1,537 224,277 154 7 Vueling 1,348 240,696 154 8 Wizz 1,322 237,960 407 9 Germanwings 1,082 155,808 143 10 Air Baltic 720 66,957 83 11 Transavia 476 72,152 119 12 Meridiana 432 63,860 63 13 Air One 416 61,002 60 14 fly Niki 347 50,304 58 15 flybaboo 223 12,514 22 16 Volareweb 195 26,148 24 17 Jet 2 165 26,662 75 18 Blue Air 144 24,392 25 19 Blue Air 136 22,032 42 20 Air Italy 119 18,534 22 21 Corendon 106 16,905 53 22 Intersky 104 6,048 10 23 Transavia.France 86 15,960 32 24 Wizz Ukraine 82 14,760 26 25 Air Arabia Maroc 65 10,530 21 26 flydubai 45 8,505 13 27 Icelandexpress 34 5,100 10 28 WOW 26 3,900 8 29 Corendon Dutch 22 3,960 14 Total 29,974 4,727,674 4,848 Table 5: Ranking of the Low Cost Carriers operating in Europe, according to number of departures in 01/2013 (figures for one week in January 2013; both directions of one route are considered). Low Cost Carrier Market in Europe 01/2013 Rank Country Departures Seats Routes 1 GB 6,840 918,598 815 2 IT 4,214 690,337 609 3 ES 3,761 677,791 627 4 DE 3,507 537,748 423 5 FR 1,737 289,403 317 6 NO 1,392 252,732 169 7 IE 1,310 209,304 148 8 CH 822 125,695 113 9 NL 797 127,544 140 10 PL 670 120,252 172 11 SE 604 107,825 98 12 AT 510 74,672 82 13 DK 485 84,369 65 14 BE 445 79,594 80 15 LV 430 46,615 58 16 FI 421 48,921 54 17 PT 409 71,373 84 18 HU 312 55,041 46 19 RO 252 43,427 70 20 CZ 140 22,214 31 21 LT 133 20,309 30 22 RU 110 16,667 19 23 TR 85 13,578 36 24 UA 76 12,683 20 25 BG 71 11,784 19 26 RS 64 9,946 26 27 GR 61 10,249 18 28 EE 59 5,381 8 29 MT 50 9,156 21 30 CY 39 6,962 14 31 SK 33 6,237 8 32 MK 26 4,488 11 33 IS 19 2,985 6 34 AL 18 2,672 3 35 HR 16 2,352 5 36 MD 12 1,731 4 37 GE 9 1,497 3 38 SI 9 1,524 3 39 AZ 6 1,134 1 40 GI 5 780 1 41 AM 4 756 1 42 BY 4 292 1 43 LU 4 624 1 44 BA 3 432 2 Total 29,974 4,727,674 4,462 Table 6: Ranking of the European countries according to the number of LCC departures in 01/2013. (Figures for one week in January 2013; both directions of one route are considered). 13

Flights / Week LCC Flights / Week Number of Departures per week Figure 4: Major LCC airports in Europe according to number of flights per week in January 2013 Other Airlines 75 % Figure 5: Share of LCC on European air traffic according to number of departures in 1/2013 Contact: Dr. Peter Berster Deutsches Zentrum für Luft- und Raumfahrt (DLR) Flughafenwesen und Luftverkehr (FW) Linder Höhe D-51147 Köln Tel.: (49) 02203-601-4554 Fax: (49) 02203-601-14554 E-Mail: peter.berster@dlr.de 14