A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Niemeier, Hans-Martin Working Paper Expanding airport capacity under constraints in large urban areas: The German experience International Transport Forum Discussion Paper, No. 2013-4 Provided in Cooperation with: International Transport Forum (ITF), OECD Suggested Citation: Niemeier, Hans-Martin (2013) : Expanding airport capacity under constraints in large urban areas: The German experience, International Transport Forum Discussion Paper, No. 2013-4, Organisation for Economic Co-operation and Development (OECD), International Transport Forum, Paris, http://dx.doi.org/10.1787/5k46n45fgtvc-en This Version is available at: http://hdl.handle.net/10419/97100 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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EXPANDING AIRPORT CAPACITY UNDER CONSTRAINTS IN LARGE URBAN AREAS: THE GERMAN EXPERIENCE TABLE OF CONTENTS 1. INTRODUCTION ..................................................................................... 5 2. INVESTMENT OF GERMAN AIRPORTS: OVERVIEW ................................. 7 3. CASE STUDIES OF CAPACITY EXPANSION AT SIX GERMAN AIRPORTS 11 3.1. Berlin Brandenburg International Airport „Willy Brandt“ ...................... 11 3.2. Düsseldorf Airport ......................................................................... 12 3.3. Frankfurt Airport ........................................................................... 13 3.4. Hamburg Airport ........................................................................... 14 3.5. Munich Airport .............................................................................. 14 3.6. Stuttgart ...................................................................................... 15 3.7. Some stylized facts about German airport expansion ......................... 15 4. KEY PROBLEMS OF AIRPORT INVESTMENT .......................................... 19 4.1. Transaction cost perspective ................................................................. 19 4.2. Airport Economics and Regulation .................................................... 20 4.3. Mega project cost economics .......................................................... 21 5. ASSESSMENT OF DECISIONS ON CAPACITY EXPANSION OF AIRPORTS 23 5.1. Public Planning .............................................................................. 23 5.2. Mediation ..................................................................................... 24 5.3. The role of CBA and the role of Impact Analysis ................................ 24 6. STRENGTHS AND WEAKNESSES OF THE GERMAN DECISION PROCESS 27 6.1. Strengths ..................................................................................... 27 6.2. Weaknesses .................................................................................. 27 6.2.1. Doubtful Demand Forecasts ......................................................... 27 6.2.2. Airport Expansion and Airport Competition .................................... 29 6.2.3. Airport Expansion and Environmental Policy ................................... 30 6.2.5. Single or Multi Hub strategy ........................................................ 34 7. SUMMARY AND CONCLUDING RECOMMENDATIONS ............................. 35 REFERENCES ............................................................................................. 38 Hans-Martin Niemeier — Discussion Paper 2013-4 — © OECD/ITF 2013 3 EXPANDING AIRPORT CAPACITY UNDER CONSTRAINTS IN LARGE URBAN AREAS: THE GERMAN EXPERIENCE 1. INTRODUCTION Expanding airports is a topic which can easily make it to the first page of the national press. But this is highly unlikely as “bad news” is “good news” and most often failures and scandals make it to the front page. Berlin airport or the on-going failure to open up a nearly-complete new airport has been the front runner in this regard and gained so much international attention that the association of engineers fears that the world wide renowned reputation of German engineering might be seriously damaged. Adding airport capacity is also a topic which goes beyond technical aspects. After all, at some time, in the short or long run, the airport Berlin Brandenburg „Willy Brandt“ will be in operation, but it will then be the economist to ask at what price. This will be difficult to assess not only for Berlin, but also for other major airport infrastructure projects of which some were actually built and some not. Fraport opened its new runway on 21 October 2011. In contrast, Munich Airport’s plan to build a third runway was voted down by a referendum on June 17 2012. Düsseldorf has two runways, but is only allowed to operate at single runway capacity due to environmental restrictions. In the 90’s, the city state of Hamburg resisted the proposal of the Chamber of Commerce to shift all charter traffic to Hannover airport and instead has expanded airport capacity at the inner city airport in Fuhlsbüttel. Plans for a central Northern German Airport never materialised. In this paper I like to address the following questions: 1. How have German airports extended capacity? Has capacity been expanded on an optimal scale and time? 2. What are the key problems of airport investment? 3. How have investment