Low Cost Monitor 2/2012

Low Cost Monitor 2/2012 - An Analysis performed by DLR - 648 Routes LCC Routes The current Low Cost Carrier Market in Germany Autumn 2012

Current Low Cost Carrier Market in Germany in 2012 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 of the summer flight schedule 2012. The passenger figures refer to the first half 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 20 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: 30 Aircraft (B737: 15, F50: 7, D8: 8) Air Berlin (AB) (www.airberlin.com), Fleet: 98 Aircraft (A319/20/21: 40, B737: 58) Air One (AP) (www.flyairone.com), Fleet: 8 Aircraft (A320: 8) Blue Air (JOR) (www.blueair-web.com), Fleet: 9 Aircraft (B737: 9) Easyjet (U2) (www.easyjet.com), Fleet: 193 Aircraft (A319: 145, A320: 48) flybe (BE) (www.flybe.com), Fleet: 65 Aircraft (D8: 44, E: 21) Germanwings (4U) (www.germanwings.com), Fleet: 32 Aircraft (A319: 32) Iceland Express (5W) (www.icelandexpress.com), Fleet: 2 Aircraft (A320: 2) Intersky (3L) (www.intersky.biz), Fleet: 3 Aircraft (D8: 3) Jet 2 (LS) (www.jet2.com), Fleet: 46 Aircraft (B737-300: 32, B757-200: 13, A319: 1) Meridiana (IG) (www.meridiana.it), Fleet: 23 Aircraft (A319: 3, A320: 11, MD80: 8, ATR: 1) Niki (HG) (www.flyniki.com), Fleet: 23 Aircraft (A320/321: 16, E: 7) Norwegian (DY) (www.norwegian.no), Fleet: 64 Aircraft (B737: 64) Ryanair (FR) (www.ryanair.com), Fleet: 294 Aircraft (B737: 294) Transavia (HV) (www.transavia.com), Fleet: 36 Aircraft (B737: 36) Vueling (VY) (www.vueling.com], Fleet: 59 Aircraft (A320: 59) Wizz (W6) (www.wizzair.com), Fleet: 37 Aircraft (A320: 37) Wizz Ukraine (WU) (www.wizzair.com), Fleet: 2 Aircraft (A320:2) (A: Airbus, B: Boeing, C: Canadair, D: Dash, E: Embraer, F: Fokker, MD: B/McDonnell, S: Saab) Flights offered by Condor or LTU are not considered in this analysis, although these airlines also offer a number Low Cost flights. But an unambiguous assignment to the Low Cost sector is considered to be difficult because only selected flights can be booked directly and with low fares. This contradicts the real Low Cost Carrier conception 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 a broad sense, Lufthansa flights of the Better-Fly -segment have to be taken into consideration as well, but here exists also 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 mergers with DBA, Gexx and LTU as well as the cooperation with Walter airline (LGW). 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 the city links, previously operated by TUIfly, some of which, however, have already been ceased again in the meantime. In total, when compared to last summer, the number of Low Cost Carriers operating in the German market has remained constant. 2

Most airlines have kept their fleet size relatively constant. Only Easyjet show an increase, worth being mentioned, of 9 airplanes as opposed to the last spring. Thus, Easyjet owns a fleet of 193 aircraft type Airbus A319 and A320. Opposed to this, Air Berlin reduced the number aircraft in service from 128 to 98 in the classes B737 and A319/320/321. With 294 aircrafts type Boeing 737-800 with almost 190 seats each, the Ryanair fleet has remained almost constant. Carrier Ranking (s. Tab. 1): Based on the number of flights (departures) in one week in July 2012, is Air Berlin with their Low Cost segment, having almost 2,300 departures, by far the largest Low Cost Carrier in Germany. However, the air traffic figure is by around 2% lower than in the preceding year. 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 continued also in the beginning of 2012, according to which the number of take-offs in the Low Cost sector dropped again by 14%, compared to 2011. But in July 2012, this crisis seems to be over because the number of starts increased by 1.5 % over the previous year. According to the ranking, Germanwings (968 flights) and Ryanair (672 flights) follow. For Ryanair, the trend observed regarding reduction in flights offered in Germany has not continued since early 2011. 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 supply during this period all domestic flights served by Ryanair have been discontinued in March 2011. Also on the other routes, Ryanair reduced its offer in Germany in 2011 by almost 30 %. A major cause was, according to Ryanair, the introduction of the German air traffic tax. This summer, however, Ryanair has expanded again its supply of flights by around 12 %. For Easyjet, in 2011 a return to growth in supply can be seen after a period of rigid reductions in 2010. This is due to the considerable expansion of the service in Berlin and by extensions in Cologne-Bonn, Duesseldorf, Hamburg and Munich, as well as the addition of new flights from Dresden. Although the number of Easyjet s routes increased by 4 % in summer 2012, there was an increase of only 1 % in frequency deals. Also for the winter flight schedule of 2012, Easyjet announced further reductions, particularly at the Dortmund airport, but also increases at Berlin. The British airline Flybe and the Austrian airline Intersky and the Hungarian airline Wizz follow on places 5 and 6. Whereas Flybe reduced their frequencies only by around 2 %, there was an increase of almost 14 % for Intersky. On the other hand, for flights performed by Wizz (ranking 7 th ) there was an increased by 12 %. Flights performed by all other Low Cost Carriers distinctly amount to less than 80 flights per week, LCC Market Shares (s. Fig. 1): The seven major of 20 Low Cost Carriers currently cover roundly 94 % of the German market. Just Air Berlin covers around 47 % of all flights. On the market share ranking list, it is followed by Germanwings (20 %) and Ryanair (14 %,). Easyjet have been able to maintain its share of 8 %. Transport Services Routes (s. Tables 1 and 2 as well as Fig. 2): In total, the analysed Low Cost airlines served 648 different domestic and cross-border routes in one week in July 2012. These are roundly 10 routes more than in summer 2011, which equals to an increase of 2 %. Thus, after route closures in 2009, a rise in 2010 and a decline in 2011, again there is a slight growth in the route development. However, the number of 648 routes is well below the maximum value from the year 2010 with 675 routes. The number of flights has also risen slightly (+ 1.5 %) if compared to the preceding year. While since the emergence of the Low Cost market roundly 10 years ago, in the first 6 years, almost 100 routes have been added each year, a crisis of the world economy and of air transport was already looming in summer 2008, when only about 50 routes have been additionally covered by LCC s. In spring 2009, for the first time, there was a decline compared to the reference period. But already in summer 2009 a positive growth of routes was seen again that continued and arrived at a new peak of 700 in summer 2010. Although, the financial and economic crisis in Germany seems to be over some companies did better than others. But with the introduction of the air traffic tax there is a new inhibitory effect. While some small airlines left the market during the crisis period, Ryanair have carried out a significant network extension. Aside from a short period of downsizing, Ryanair expanded their network by 75 routes between 2008 and 2012 and set a new 3

record in Germany in this period between summer 2008 (112 routes) and summer 2012 (187 routes). Here, in particular, the Karlsruhe and Memmingen airports play a role, because primarily from these airports Ryanair s network extensions have been made. Also at the Hahn and Niederrhein airports there is expansion of routes again this year so that the maximum values from the year 2010 could be even slightly exceeded. While flights from the Berlin-Schoenefeld airport have been reduced, Leipzig airport was included into Ryanair s flight schedule and since May 2012, there are also Ryanair flights from the Cologne-Bonn airport. While Easyjet has greatly expanded their flights supply in summer 2011, there are only slight increases in the current year. But, at the same time, the peak of flights offered (386) and routes in operation (55) has been achieved. Also Germanwings increased their flights offered and the route network slightly, particularly in Stuttgart and partly in Cologne-Bonn, but there are decreases in Berlin-Schoenefeld. It should be noted, that for domestic flight routes double counting should be taken into account (for example, outward MUC-DUS and return DUS-MUC). As opposed to this, Air Berlin continued to reduce the flight service - a process that began in 2011. This year, approximately 2 % fewer starts and 7 % fewer routes are available than were last year. After Air Berlin, Germanwings, Ryanair and Intersky had started to serve more domestic routes in the years before, the reduction of domestic flight routes, already started last year, was continued with roundly 8% as opposed to the preceding year. There were special service offers with new priorities in the last year, especially to Eastern Europe. Thus, for example, the air traffic to Hungary increased to well over 50 %. Competition: Direct competition among carriers in the Low Cost sector is still very low. Only 27 (4.5 %) of a total of 648 routes are two competing vendors. There are few routes with 2 or more providers, 619 routes and thus the vast majority are operated solely by a low cost company. Flights (s. Table 1):: In total, about 4,900 flights were carried out by Low Cost Carriers in one week in July 2012; one year before there were 70 fewer flights. Thus, the number of flights has increased by 1.5 %. The number of seats has grown somewhat more strongly, by around 3.8 %. The number of routes has increased by 2 %. This means that the flight routes network developed similar to the number of frequencies. Seats (s. Table 1): On 3,522 flights on average 153 seats per flight have been made available, a similar value like in the preceding year. Obviously, for Low Cost Carriers a typical average scale airplane with around 150 seats has established. However, Ryanair, the major Low Cost Carrier uses only 189 seats per flight in their B737-800. These flight-specific seat capacities continue ranking distinctly higher than those of traditional European scheduled airlines. When considering the fleet composition of the individual airlines the tendency of disposing small-scale aircraft is revealed. Typical aircraft are Airbus 319/320 and Boeing 737. Only a few airlines, such as Intersky or flybe have smaller propeller aircraft in their fleets. Destinations (s. Table 2): The country of destination ranking reveals the high market share of German domestic traffic: However, only 33 % of all departures offered by Low Cost Carriers, flights departing from German airports, are offered in this market. That makes only up 15 % of all routes (roundly 102 routes, corresponding to 51 airport pairs). On average, 16 Low Cost domestic flights per week are being offered on one route. In the summer months, Spain and Italy rank second and third with their round 790 and 485 flights respectively. Great Britain ranks ahead of Austria and Switzerland on place 4. These are followed by Greece, Ireland and Sweden on places 7 to 9 ahead of Poland and Croatia. In particular inside Germany and to Austria and Switzerland a decline of Low Cost services is seen as opposed to the preceding year. However, this is among others due to administrative reasons such as a more rigid charging policy, since both, Germany as well as Austria have implemented or raised an air traffic tax, which made several companies reduce their services in these markets. In total, German Low Cost Carriers currently serve destinations located in 36 countries. An expansion is seen to the Mediterranean countries and Eastern Europe. As opposed to the preceding year, newly added is only Tunisia. Airports (s. Fig. 3): The most frequented German airport Frankfurt continues playing only a minor role in the Low Cost segment in the summer 2012. This is due to its distinct hub function in traditional scheduled airline traffic and the already high utilisation of airport capacity. Thus, only 100 flights (roundly 2 %) have been performed mainly by Air Berlin, Niki or flybe as Low Cost flights. Cologne-Bonn shows with 555 departures (equals to 65 % of the total local flight traffic) a roundly 4

4 % lower value than in the preceding year and is only number 2 in the German airport ranking offering the highest number of Low Cost flights, behind Berlin-Tegel airport. Whereas the Low Cost percentage of Berlin-Schoenefeld amounts to roundly 74 %, the one of Berlin-Tegel amounts to 39% only. Although the Low Cost traffic has decreased on some German airports (e,g, Berlin-Schoenefeld, Cologne-Bonn or Hamburg), it was able to increase its supply of flights in Berlin-Tegel by 30 flights per week. Also airports that last year suffered sharp declines are also to grow this year, such as the airports Hahn and Niederrhein, the revenue of which is still far below the value of 2010. With more than 90 % share of scheduled airline services, the airports Niederrhein, Luebeck and Hahn almost exclusively Low Cost Carrier transport is practiced. To a less extreme extent, the same is true for the airports Dortmund, Karlsruhe/Baden-Baden and Memmingen, Air Fares Average Fares The air fares offered by the major Low Cost Carriers in Germany are considerably varying related to destination and booking period. The prices publically quoted by the Carriers are often net prices, normally not including any fees, taxes or other charges. 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 time points (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 that were operated in autumn 2012. The relatively constant route sample allows for a comparison with the results of the preceding analysis. This time, 12 th of September 2012 was selected as the posting date. In the autumn of 2012, the average fares determined in this way for one route vary depending on the carrier between approx, 50 and 90 (net prices) and between 70 and 120 (gross prices). The difference between net and gross prices amounts to around 8 in the best case, and to 64 in the worst case. Meanwhile, many airlines do not show their net fares anymore. In autumn this year - like every year - the average fares have partly dropped compared to spring. Whereas the average fares of the inexpensive Low Cost Carriers have slightly climbed, there is a slight decrease of the more expensive ones have dropped, so that the price span is slightly closer. Average Prices related to Booking Period Low Cost Carrier air fares considerably vary according to the period between booking and flight operation: A flight, carried out one day after booking, often costs four to tenfold of a flight to be started in 3 months. However, this price range is not considered to be as pronounced as formerly. The average gross prices quoted by the major German Low Cost Carriers vary between approx, 100 and more than 200 for a flight with a booking period of only one day and between 21 and 99 for a flight to be started 3 months after the booking date. However, these values do not refer to the number of tickets actually sold at these prices, since there is no assured information on the quantity of seats sold at the respective rates. A detailed analysis of Low Cost Carrier 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 referring between airports. For the hub-airport Frankfurt the LCC-percentage is the lowest (2 %), whereas the Low Cost Airports Hahn, Luebeck and Niederrhein are almost exclusively characterized by this air traffic segment. Also the airports Berlin-Schoenefeld, Cologne-Bonn, Dortmund, Karlsruhe/Baden-Baden, Friedrichshafen and Memmingen mainly feature these Low Cost services. After the traffic decline in 2008/09 marked by the financial and economic crises, air traffic has recovered in 2010. The number of passengers has grown by 2 % in the first half of 2012 in comparison with the previous year. Since for the purposes of demand determination in the Low Cost traffic for the first time the MIDT-data, supplied by Sabre, have been applied, that are not necessarily compatible with those data supplied by the airlines in former years, a statement as to the growth in passenger demand in this segment can only be made to a limited extent. When combing the data sources in the area of supply and demand, it can be concluded that in the Low Cost traffic the total number of passengers carried declined by around 2 million or more than 6 % in the first half of 2012. 5

Here, the increase of the total German air traffic is offset by a simultaneous decrease of the number of LCC passengers. Thus, the proportion of 33 % of passengers carried by the Low Cost traffic decreased to 30 %. Based on the original domestic demand (disregarding the transfer traffic) the LCC suppliers show high to very high market shares for domestic flights (s. Table 4) on most airports apart from the airports Frankfurt and Bremen. In total, about 40 % of passengers are carried on domestic flights operated by Low Cost Carriers. This is a decline of over 5 percentage points compared to last year. At the airport Berlin-Schoenefeld, almost all the demand is served by Low Cost deals. In contrast, the inner-german Low Cost flights were stopped completely at airports such as Niederrhein and Hahn since 2011. Although the LCC percentage amounts only to 50% at the airport of Berlin-Tegel, this airport shows the highest passenger traffic in the Low Cost area (1,8 million), followed by the airports Munich (1,6 million), Cologne-Bonn (1,2 million), Duesseldorf (1,0 million) and Hamburg (0,9 million). The current Low Cost Carrier Market in Europe Besides the detailed analysis of the German Low Cost Carrier market, also the main features of the European LCC-market are described here. In addition to the airlines already operating in the German market, further airlines can be allocated to the 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 classical 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: 12 Aircraft (B737: 8, B767:4) Blu Express(BV) (www.blu-express.com), Fleet: 4 Aircraft (B737: 4) Bmibaby (WW) (www.bmibaby.com), Fleet: 14 Aircraft (B737: 14) Flybaboo (F7) (www.flybaboo.com), Fleet: 5 Aircraft (D8; 2, E190: 3) Jet4you (8J) (www.jet4you.com), Fleet: 1 Aircraft (E: 1) Meridiana (IG) (www.meridiana.com), Fleet: 23 Aircraft (A319: 3, A320: 12, MD82/83: 5, ATR: 3) Transavia France (TO) (www.transavia.com), Fleet: 8 Aircraft (B737: 8) Volare (VA) (www.volareweb.com), Fleet: 1 Aircraft (A320: 1) Windjet (IV) (www.windjet.it), Fleet: 12 Aircraft (A319: 5, A320: 7) 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: 24 Aircraft (B737: 24) In total, compared with the previous year, the number of Low Cost airlines operating in Europe has decreased slightly. In this context, the Moroccan Low Cost Carrrier Jet4you and the Italian air company Windjet have now ceased operations. Also Flybaboo fly no more using their own brand but has been taken over by Darwin Airline. The Malaysian long-haul Low Cost Carrier Air Asia X have been pulled back from Europe entirely due to increased costs. The major European Low Cost airline is Ryanair with 12,000 departures in July 2012 (s. Table 5). For the first time after the decrease this spring they show a growth again of almost 10 % compared with the previous year thus reaching a new high. Second major airline is Easyjet with roundly 9,000 departures. They also increased their flights by offering about 7 % more than last year. While at Ryanair almost 300 routes have been added, Easyjet expanded their flight route network by slightly more than 100 routes. After a big gap, they are followed by the airline flybe that was able to extend their services by 8 % to more than 3,790 flights. As a consequence and owing to the decrease of around 3,780 flights offered per week, Air Berlin is close behind and only ranking fourth amongst the Low Cost Carriers in Europe. Norwegian and Vueling, in contrast, have extended their flights in the meantime and are 5 th and 6 th, with more than 2,700 departures. Wizz, Germanwings, Jet2 and Air Baltic follow with between 1,000 and 2,000 departures per week. Whereas Wizz, too, have considerably extended their services, that of Air Baltic decreased sharply. Thus, the consolidation in the Low Cost Carrier range is continuing. While airlines such as, for example, Clickair have been integrated into a larger Low Cost Carrier company such as Vueling, others such as Air Italy have been taken over by former national carriers like Alitalia, and still others such as Windjet had to file for bankruptcy in August 2012. 6

Consolidation in the market seems to be progressing further. While smaller companies are increasingly disappearing from the market, larger ones, for example Ryanair, expand their supply after a brief standstill phase and strengthen the market position by 24% last year to more than 25% in this year. Thus, a permanent growth in the number of routes is to be noted at the European level, determined this time by 6 % compared to the 2011 period. In contrast, in Germany only a growth of 2 % can be seen, after a decline of more than 7 % in the last year. The increase by about 6 % in the offered flights in Europe is much higher than in Germany with 1.5 %. The reason is the already frequently mentioned implementation of the air traffic tax in Germany since 1 st January 2011 and the subsequent shifting or ceasing of flights in Germany. Great Britain is, as source and destination country for Low Cost flights still number 1 (s. Table 6). In summer 2012, the British network is covering more than 1,100 routes all over Europe, including domestic traffic. Also here, since 2009 stagnation - or a below-average growth respectively - is observed with regard to the number of routes, possibly owing to the raised air traffic tax levied in this country. The number of flights increased only slightly by 1 % in the observed period. Spain, Italy and Germany follow on the next places with about slightly more than 4,800 flights each. France, Ireland, Norway and the Netherlands rank on places 5 to 7 with more than 1,000 flights each. Out of the total of 7,000 different routes, more than 6,400 (91 %) are being served by only one Low Cost Carrier. Only 563 flight routes are served by 2 and 66 flight routes by more than 2 Low Cost Carriers being in the state of competition. This means that even in Europe, the number of routes where direct competition takes place has been greatly reduced. Due to a strong flight supply expansion among others by Ryanair and Vueling - Barcelona is the major European Low Cost Carrier airport now, with more than 1,800 departures per week in July 2012 (s. Fig. 4). It is followed by the airports London-Gatwick (1,484 departures), Palma de Mallorca (1,371 departures) and Dublin (1,321 departures). London-Stansted, the second London airport, follows on rank 5 (1,207 departures). The third London airport Luton is number 14 (660 departures). More than 3,300 Low Cost flights are provided in total from these London airports. This figure is not topped by any other European agglomeration. Berlin-Tegel with its 649 departures ranks on place 15. Among the 30 major Low Cost Carrier airports in Europe range together with Cologne-Bonn (place 18), Duesseldorf (place 20), Stuttgart (place 26) and Munich (place 30) also further German airports where the Low Cost Carriers serve more than 440 flights per week. When looking at the ranking of German airports providing Low Cost service, it becomes obvious that particularly the airport Berlin-Schoenefeld has worsened if compared with summer 2011. It has deteriorated from the 28 th to 34 th place in the ranking. This is, among other things, due to the strong reductions of Germanwings s and Ryanair s offer in Berlin-Schoenefeld. On European routes, the LCC market has been able to increase its share to 29 % in the area of European air traffic (s. Fig. 5). 71% of the flights are mainly performed by the traditional scheduled airlines and holiday charters. Another part of the market is served by smaller regional airlines but mostly in cooperation with a large air company. 7

Low Cost Carrier Market in Germany 07/2012 07/2011 Change (%) Rank Airline Departure Seats Routes* Departure Seats Routes* Departure Seats Routes* 1 Air Berlin 2,317 351,449 187 2,361 348,868 201-1.9 0.7-7.0 2 Germanwings 968 139,392 157 957 138,393 149 1.1 0.7 5.4 3 Ryanair 672 127,008 187 598 113,022 161 12.4 12.4 16.1 4 Easyjet 386 61,272 55 383 59,954 53 0.8 2.2 3.8 5 flybe 91 7,116 10 93 6,789 13-2.2 4.8-23.1 6 Intersky 87 4,698 16 101 5,454 18-13.9-13.9-11.1 7 Wizz 81 14,580 21 72 12,528 19 12.5 16.4 10.5 8 Aer Lingus 62 10,788 7 62 10,788 7 0.0 0.0 0.0 9 Air Baltic 56 5,537 5 59 5,195 5-5.1 6.6 0.0 10 Norwegian 47 8,596 11 37 6,624 8 27.0 29.8 37.5 11 fly Niki 34 4,846 2 34 4,688 2 0.0 3.4 0.0 12 Vueling 33 5,832 5 0 0 0 - - - 13 Wizz (Ukraine) 17 3,060 5 15 2,610 4 13.3 17.2 25.0 14 Jet2 9 1,332 2 6 888 1 50.0 50.0 100.0 15 Iceland Express 6 900 3 7 1,036 3-14.3-13.1 0.0 16 Blue Air 6 944 2 6 884 2 0.0 6.8 0.0 17 Air One 5 740 1 0 0 0 - - - 18 Transavia 4 616 1 4 616 1 0.0 0.0 0.0 19 Air Arabia Maroc 2 324 1 6 1,044 2-66.7-69.0-50.0 20 Meridiana 2 336 1 0 0 0 - - - Total: 4,885 749,366 679 4,815 721,702 658 1.5 3.8 3.2 Table 1: 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 July 2012) 8

Low Cost Carrier Market in Germany 07/2012 07/2011 Change (%) Rank Destination Departures Seats Routes Departures Seats Routes Departures Seats Routes 1 Germany 1,640 224,870 102 1,866 258,943 111-12.1-13.2-8.1 2 Spain 790 145,737 96 581 105,173 82 36.0 38.6 17.1 3 Italy 485 77,622 115 466 74,875 112 4.1 3.7 2.7 4 Great Britain 481 68,921 54 437 60,260 52 10.1 14.4 3.8 5 Austria 259 36,290 18 282 39,036 23-8.2-7.0-21.7 6 Switzerland 134 21,066 9 165 23,610 11-18.8-10.8-18.2 7 Greece 106 17,226 42 100 15,921 39 6.0 8.2 7.7 8 Irleland 87 15,333 12 83 14,622 11 4.8 4.9 9.1 9 Sweden 77 13,191 14 71 12,051 13 8.5 9.5 7.7 10 Poland 74 10,842 14 55 9,297 13 34.5 16.6 7.7 11 Kroatia 72 10,472 26 70 10,105 25 2.9 3.6 4.0 12 France 68 11,091 12 72 11,169 15-5.6-0.7-20.0 13 Russia 67 10,980 8 80 11,802 11-16.3-7.0-27.3 14 Latvia 66 7,427 8 69 7,085 8-4.3 4.8 0.0 15 Portugal 60 10,566 15 52 9,177 14 15.4 15.1 7.1 16 Norway 59 9,594 12 59 10,197 12 0.0-5.9 0.0 17 Hungary 58 8,987 10 31 4,704 6 87.1 91.1 66.7 18 Denmark 42 6,671 4 37 5,377 4 13.5 24.1 0.0 19 Turkey 33 4,752 10 47 7,022 17-29.8-32.3-41.2 20 Belgium 29 4,563 3 6 936 1 383.3 387.5 200.0 21 Rumania 28 4,796 8 27 4,298 8 3.7 11.6 0.0 22 Finland 27 4,560 5 30 4,812 5-10.0-5.2 0.0 23 Serbien 26 3,924 11 22 3,390 9 18.2 15.8 22.2 24 Morocco 22 3,906 10 23 4,257 8-4.3-8.2 25.0 25 Ukraine 17 3,060 5 15 2,610 4 13.3 17.2 25.0 26 Ntherlands 15 2,284 3 20 3,004 3-25.0-24.0 0.0 27 Lithuania 12 2,250 4 7 1,323 2 71.4 70.1 100.0 28 Czechia 10 1,440 1 7 1,008 1.0 42.9 42.9 0 29 Bulgaria 9 1,638 3 10 1,650 3-10.0-0.7 0.0 30 Estonia 9 1,701 3 6 1,134 2 50.0 50.0 50.0 31 Iceland 7 1,032 3 10 1,468 5-30.0-29.7-40.0 32 Cyprus 6 1,134 3 2 378 1 200.0 200.0 200.0 33 Bosnia 5 720 2 4 576 2 25.0 25.0 0.0 34 Israel 2 288 1 2 288 1 0.0 0.0 0.0 35 Tunisia 2 288 1 0 0 0 - - - 36 Albania 1 144 1 1 144 1 0.0 0.0 0.0 Total 4,885 749,366 648 4,815 721,702 635 1.5 3.8 2.0 Table 2: Country of destination ranking according to number of flights (data are valid for one week in July 2012; within Germany both directions of one route are considered) 9

629 675 635 648 Figure 2: Development of the LCC route network on German airports Flights / Week LCC Flights / Week Number of Departures Airport Figure 3: Passenger flights offered on German airports per week in July 2012 10

Low Cost Carrier Market in Germany Airport Passengers in the 1 st half year of 2012 (in thousand) Percentage % Share of total Total LCC LCC TXL 8,445 4,135 49.0 DUS 9,703 3,157 32.5 CGN 4,218 3,111 73.7 SXF 3,414 2,943 86.2 MUC 18,454 2,611 14.1 STR 4,455 2,101 47.2 HAM 6,564 2,068 31.5 HHN 1,198 1,198 100.0 NRN 948 948 100.0 HAJ 2,374 909 38.3 NUE 1,746 880 50.4 DTM 886 845 95.4 FRA 27,304 657 2.4 BRE 1,130 536 47.5 FKB 550 520 94.5 FMM 392 381 97.0 DRS 866 378 43.6 LEJ 896 365 40.8 FMO 447 278 62.2 PAD 382 182 47.7 FDH 239 173 72.5 LBC 153 153 100.0 SCN 173 119 68.9 RLG 48 30 62.5 ZQW 61 14 22.3 ERF 53 2 4.4 Total: 95,103 28,819 30.3 Table 3: Low Cost passenger traffic according to airports and the share of total in the first six months of 2012 (References: ADV, Sabre, DLR) 11

Airport Low Cost Carrier Market in Germany Passengers in German domestic flights in the 1 st half of 2012 (in thousand) Percentage % Share of total LCC TXL 1,816 51.5 MUC 1,600 33.4 CGN 1,212 72.2 DUS 1,037 46.0 HAM 887 33.2 STR 813 56.2 SXF 426 97.7 NUE 395 56.0 DRS 244 42.8 HAJ 213 35.4 FRA 163 5.1 FKB 131 98.4 LEJ 122 34.9 FMO 104 45.8 DTM 86 99.8 FDH 83 68.2 SCN 81 68.9 RLG 30 71.6 PAD 14 18.9 BRE 7 1.7 ERF 3 86.6 HHN 0 100.0 FMM 0 0.2 LBC 0 100.0 NRN 0 0.0 ZQW 0 0.0 Total: 9,324 39.8 Table 4: LCC passengers on German domestic flights, according to airports and LCC share in the first six months of 2012 (References: ADV, Sabre, DLR) 12

Low Cost Carrier Market in Europe 07/2012 Rank Airline Departures Seats Routes 1 Ryanair 11,717 2,214,513 2,597 2 Easyjet 8,763 1,409,388 1,128 3 Flybe 3,791 277,052 364 4 Air Berlin Euro Shuttle 3,784 599,816 396 5 Vueling 2,790 496,080 292 6 Norwegian 2,735 491,824 524 7 Aer Lingus 2,003 294,502 224 8 Wizz 1,706 307,080 442 9 Germanwings 1,577 227,088 283 10 Jet 2 1,006 174,848 305 11 Air Baltic 1,002 92,127 104 12 Meridiana 895 125,980 126 13 Transavia 772 120,616 203 14 fly Niki 707 108,800 158 15 Air One 703 101,780 99 16 Windjet 433 69,504 67 17 bmybaby 260 38,252 60 18 Blue Air 256 40,940 64 19 Blu Express 239 40,415 44 20 Volareweb 232 30,616 26 21 flybaboo 225 12,210 44 22 Transavia,France 212 38,928 74 23 Intersky 121 6,534 36 24 Air Italy 114 16,726 25 25 Wizz Ukraine 88 15,840 24 26 Air Arabia Maroc 50 8,100 19 27 Iceland Express 46 6,900 23 28 flydubai 33 6,237 11 29 Corendon Dutch 28 5,040 14 Total 46,288 7,377,736 7,776 Table 5: Ranking of the Low Cost Carriers operating in Europe, according to number of departures in 07/2012 (figures for one week in July 2012; both directions of one route are considered). Low Cost Carrier Market in Europe 07/2012 Rank Country Departures Seats Routes 1 GB 10,028 1,377,398 1,188 2 ES 7,984 1,429,005 1,042 3 IT 6,909 1,129,675 1,036 4 DE 4,885 749,366 648 5 FR 2,728 453,846 506 6 IE 1,808 290,961 216 7 NO 1,469 252,313 246 8 NL 1,034 168,633 183 9 CH 938 139,614 143 10 PT 879 152,548 135 11 SE 811 143,100 162 12 PL 749 133,190 203 13 GR 695 121,824 269 14 AT 636 94,635 108 15 DK 600 101,690 93 16 BE 576 103,596 103 17 LV 571 59,806 67 18 FI 407 50,243 67 19 HU 383 66,946 67 20 RO 374 63,206 85 21 HR 269 44,439 90 22 TR 194 33,873 64 23 LT 187 28,406 43 24 CZ 183 30,989 36 25 RU 164 24,921 35 26 CY 123 23,145 41 27 MT 123 22,526 41 28 BG 119 19,977 32 29 EE 92 10,220 16 30 UA 89 13,439 20 31 RS 84 12,792 29 32 SK 62 11,636 17 33 IS 36 5,644 16 34 GI 17 2,652 3 35 MD 17 2,433 6 36 AL 11 1,630 3 37 BA 9 1,476 4 38 LU 9 450 1 39 MK 8 1,440 3 40 GE 7 1,095 2 41 SI 7 1,092 1 AM 5 903 2 AZ 5 795 2 42 BY 4 168 1 Total 46,288 7,377,736 7,075 Table 6: Ranking of the European countries according to the number of LCC departures in 07/2012. (Figures for one week in July 2012; 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 July 2012 Other Airlines 71 % Figure 5: Share of LCC on European air traffic according to number of departures in 7/2012 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