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BUD Future  
User currently offlinedean From Hungary, joined Apr 2005, 216 posts, RR: 1
Posted (3 years 7 months 3 weeks 2 days 19 hours ago) and read 3035 times:

Budapest Airport is about to open its new-old terminal called SkyCourt. It will reconnect Terminal 2A and 2B with a large transit area, providing superior (or at least much greater) experience for pax. SkyCourt opens at the end of March, but other developments will follow including two new piers. This is the biggest investment in the recent past at BUD .

Hochtief AirPort, the major shareholder and operator of BUD agreed to carry out a huge development program (261 million EUR) until 2011. It is said they have already spent the 82% of the targeted budget, however, reconstruction and development is not yet finished. A new cargo terminal and logistic centre (called CargoCity) is planned and constructions are to begin in 2012. It is also said the overall pax capacity of BUD will grow over 15 million / year.

It is great to see BUD developing, however, I have some doubts about its future success. Comparing to nearby airports (VIE and PRG mainly) I can not see much of uncovered markets. The Hungarian flag carrier, Malev ceased its longhauls a while ago and they are not in the position to even think about reopening them. The EU market is full and as far as I can see MA also having trouble competing against big EU carriers and LCCs on shorthaul flights. Okay, there are other airlines as well, but who? EK seems to be happy with VIE and PRG and even they are about to open a new destination in the region, OTP fits better to their map. As for the US carriers, AA opens its daily service to JFK this spring (providing the only oneworld longhaul from BUD), competing againts DL (which I heard is going to be downgraded to 4 weekly). All other non-EU major carriers with flights to Central-Eastern Europe are going to VIE and PRG. Budapest Airport says it is negotiating with 40 (!!) airlines about opening new flights. Well, it is hard to believe  

On the other side I can see a real potentional in cargo as BUD location and infrastructure is good in the region.

What do you guys think? Which could be that 40 carriers? What could be BUD future success?

PS: there is a short video about the SkyCourt terminal: http://www.youtube.com/watch?v=NzmyUGpldwU

12 replies: All unread, jump to last
 
User currently offlineAleksandar From Serbia, joined Jul 2000, 3236 posts, RR: 32
Reply 1, posted (3 years 7 months 3 weeks 2 days 19 hours ago) and read 2958 times:

Number of 40 seems a bit exaggerated, but there will be a progress for BUD it just depends how big. What seems like the biggest obstacle for BUD growth is still VIE which is relatively close.


R-E-S-P-E-C-T
User currently onliner2rho From Germany, joined Feb 2007, 2677 posts, RR: 1
Reply 2, posted (3 years 7 months 3 weeks 2 days 16 hours ago) and read 2799 times:

BUD's main problem is the trouble that MA has gone through - on the one hand it has been poorly managed, on the other it has been largely neglected by its OW partners. Now it looks like MA mangement has established a clear way forward towards profitable operations... but in the meantime, OW has looked towards AB. So now MA / BUD's problem may be that in the coming years OW could be more keen on adding service to BER / AB instead.
I still think BUD has the better geographical position for an Eastern European hub, and AB has yet to develop any Eastern European destinations, so that's the card that MA / BUD will have to play to fill that gap in the OW network.


User currently offlineOP3000 From United States of America, joined Jun 2009, 1775 posts, RR: 2
Reply 3, posted (3 years 7 months 3 weeks 2 days 14 hours ago) and read 2649 times:

Quoting r2rho (Reply 2):
I still think BUD has the better geographical position for an Eastern European hub, and AB has yet to develop any Eastern European destinations, so that's the card that MA / BUD will have to play to fill that gap in the OW network.

The issue that BUD has is that unlike other OW hubs in Europe, it has relatively little potential for long haul. Pretty much the only O/D route is JFK-BUD, which AA flies year-round. Even HEL (a small O/D market) has more room given its location along the polar routes to Asia.

I personally see BUD (and other Eastern European airports) having a lot more growth in the next few years from LCCs, and not so much from indigenous legacies. And with these increases in airport capacity it is likely they will have to keep the landing fees cheap.


User currently offlineWROORD From United States of America, joined Mar 2009, 958 posts, RR: 0
Reply 4, posted (3 years 7 months 3 weeks 2 days 11 hours ago) and read 2523 times:

Quoting r2rho (Reply 2):
BUD's main problem is the trouble that MA has gone through - on the one hand it has been poorly managed, on the other it has been largely neglected by its OW partners

True, to have a larhe hub operations you've got to have a strong airline there and MA is anything but that. MUC or FRA are doing great because LH, VIE has OS. Once MA gets stronger BUD will become more important.


User currently onlinekl911 From Czech Republic, joined Jul 2003, 5201 posts, RR: 15
Reply 5, posted (3 years 7 months 3 weeks 2 days 10 hours ago) and read 2472 times:

Wizzair is strong out of T1, perfect terminal with rail connection, which T2 hasnt. For EU flights i prefer Wizz over Malev for price/quality. But I must say im curious for this new skyterminal.

User currently onlinePEET7G From Hungary, joined Jan 2007, 695 posts, RR: 0
Reply 6, posted (3 years 7 months 3 weeks 2 days 10 hours ago) and read 2453 times:

Quoting dean (Thread starter):
Budapest Airport is about to open its new-old terminal called SkyCourt. It will reconnect Terminal 2A and 2B with a large transit area, providing superior (or at least much greater) experience for pax. SkyCourt opens at the end of March, but other developments will follow including two new piers. This is the biggest investment in the recent past at BUD .

Well, I would call the new area totally new as the old building was torn down to earth and state of the art, as for the many prizes the Skycourt constructors have won with this project. Unfortunately the further developments are to come wen achieving an internal benchmark number of passengers and that is 10M as it was spoken when we where still in this project. However as you rightfully pointed out the next development and focus is on the cargo center.

Quoting dean (Thread starter):
Comparing to nearby airports (VIE and PRG mainly) I can not see much of uncovered markets.

On the contrary, there is a huge uncovered market and that is OW. While you are right that the 2 mentioned airports are the main competitors, but the future of MA and to some extent BUD relies on what is on the minds of OW alliance, MA management and etc. Unfortunately there was little to no action on their part regarding BUD, however no serious alliance can ignore this vastly developing region of the EU and leave a blackspot on their network. The 2 fastest growing markets in East Europe are Romania and Bulgaria, and accessing those from London, MAD or even any of AB's hubs is impossible. So I am pretty confident that something has to happen, or OW will totally lose this market to Star and Skyteam.

Besides, if you look at PRG, Skyteam has a huge hand in their development (KE and DL come to mind). It is simple OK and their Skyteam members have a huge co-operation that MA lacks from it's OW members.

Quoting dean (Thread starter):
The Hungarian flag carrier, Malev ceased its longhauls a while ago and they are not in the position to even think about reopening them.

Very true, but I don't think that is a problem, in fact it is a pretty smart move to dump those 2 flights and all the costs of maintaining such a small Longhaul fleet. Again I see a huge part for OW carriers to start up flights to BUD and co-operate with MA to develop a very strong regional distribution point.

Quoting Aleksandar (Reply 1):
Number of 40 seems a bit exaggerated, but there will be a progress for BUD it just depends how big. What seems like the biggest obstacle for BUD growth is still VIE which is relatively close.

Totally agree. The biggest obstacle is VIE, but that is a competition that a well served BUD should be able to handle. The problem is that over half of Hungary (and the best developed part for that matter) can access VIE just as easily as BUD.

Quoting r2rho (Reply 2):
BUD's main problem is the trouble that MA has gone through - on the one hand it has been poorly managed, on the other it has been largely neglected by its OW partners. Now it looks like MA mangement has established a clear way forward towards profitable operations... but in the meantime, OW has looked towards AB. So now MA / BUD's problem may be that in the coming years OW could be more keen on adding service to BER / AB instead.
I still think BUD has the better geographical position for an Eastern European hub, and AB has yet to develop any Eastern European destinations, so that's the card that MA / BUD will have to play to fill that gap in the OW network.

You pretty well summed it all up r2rho  
However as I already said, no AB hub is in a good position as BUD is. And one of the biggest drawback of BUD (the small and cramped terminals) has now ended.

Skycourt is really going to be a modern way to connect and I think MA is putting in huge effort and upgrade into their new lounges at the spanking new Skycourt.

Quoting OP3000 (Reply 3):
The issue that BUD has is that unlike other OW hubs in Europe, it has relatively little potential for long haul. Pretty much the only O/D route is JFK-BUD, which AA flies year-round.

On the contrary... only that currently LH, OS, LX, AF, KL... and others are feasting on these passengers. You should see the army of flights going out to these hubs packed with connecting passengers. If you look at OS for example (a pretty easy measure) almost 100% of their BUD flight is to collect connecting passengers. No one in their right mind would otherwise take a flight to VIE from BUD! And that is just OS and those who don't choose to drive to VIE... so the potential is very much there, it just needs to get organized  
Quoting WROORD (Reply 4):
True, to have a larhe hub operations you've got to have a strong airline there and MA is anything but that. MUC or FRA are doing great because LH, VIE has OS. Once MA gets stronger BUD will become more important.

100% correct...and to be back on topic: I think the new terminal is a huge step to give every option for MA and OW partners to connect their passengers in a stylish and modern hub. What they will do with it, is up to them.



Peet7G
User currently offlinekrisyyz From Canada, joined Nov 2004, 1593 posts, RR: 0
Reply 7, posted (3 years 7 months 3 weeks 2 days 9 hours ago) and read 2400 times:

Quoting r2rho (Reply 2):
BUD's main problem is the trouble that MA has gone through - on the one hand it has been poorly managed, on the other it has been largely neglected by its OW partners

The biggest problem with MA is it's massive debt. For decades, MA's mission was prestige, growth and to be a source of national pride. It's only now being operated like a for profit business. MA thought it was more important to look like a "good airline" than to make money or to secure its future.

Quoting dean (Thread starter):
The Hungarian flag carrier, Malev ceased its longhauls a while ago and they are not in the position to even think about reopening them.

Correct me if I'm wrong, but I recall something like 80% of MA's long-haul passengers were transit pax, who connected through BUD to other destinations. When MA rightly ceased long-haul ops those pax simply found other direct ways of getting from A to B. Do you happen to know what percentage of pax traffic was made up of MA long-haul pax?

If MA ever restarts long-haul ops, they should concentrate on serving the far and middle-East rather than N. America.

Quoting PEET7G (Reply 6):
Totally agree. The biggest obstacle is VIE, but that is a competition that a well served BUD should be able to handle. The problem is that over half of Hungary (and the best developed part for that matter) can access VIE just as easily as BUD.

I know of several Hungarians who fly YYZ-VIE on OS and then either drive or take the train into BUD.

Call me pessimistic, but I don't see the situation in BUD improving for a while. The economic and political situation in Hungary is pretty poor at the moment. The "1956" immigrant community is getting too old to travel so BUD will see less and less VFR traffic. Even most tourist from North America fly into one of the major hubs then travel by ground throughout Europe.

MA 's future viability is questionable. Even if they get all their debt issues solved, they still face increasing competition from LCC's and little revenue to invest into improving their services or network. For years they couldn't even afford to paint even one 737 in the OW colour scheme. I think MA would have had greater success with SkyTeam.

I think the BUD redevelopment is great! SkyCourt looks good and it really injects some "hope" into the future of BUD. The problem I see is somewhat similar to YYZ . Like YYZ has, BUD is undergoing massive redevelopment which eats up a lot of money. To attract new airlines, airports usually lower fees. But most airports cannot afford to do both at the same time. BUD probably won't be able to pay for the construction while decreasing fees so much that airlines leave other airports to operate out of BUD. I know that BUD has already lowered some of its fees and they have been able to attract some new carriers but their growth seemingly plateaued . I hope that everything goes to plan and BUD becomes a significant "player" in the region, only the future will tell.

Just my two cents,

KrisYYZ


User currently offlineIndianicWorld From Australia, joined Jun 2001, 2989 posts, RR: 0
Reply 8, posted (3 years 7 months 3 weeks 2 days 8 hours ago) and read 2362 times:

Quoting dean (Thread starter):
Budapest Airport says it is negotiating with 40 (!!) airlines about opening new flights. Well, it is hard to believe

They may consider an email to 40 carriers negotiations 

I wouldnt blame OW for MA's faults, its really just its own inability to manage its affairs properly.

BUD has a promising future, especially with such developments as the SkyCourt, but it will definately need a stronger MA and an improved national economic position to achieve its potential.


User currently offlinedebonair From Germany, joined Jan 2004, 2442 posts, RR: 4
Reply 9, posted (3 years 7 months 3 weeks 2 days 3 hours ago) and read 2189 times:

Quoting dean (Thread starter):
Which could be that 40 carriers?

One of them for sure will be: http://www.flycentraleurope.com/

Quoting dean (Thread starter):
What could be BUD future success?

I think one big problem is the situation of MA. There is nothing special about this airline... E.g. OS is most famous the airline of EasternEurope. But MA?! MA is in urgent need to get a name either for service, comfort etc. or for their route network.

Also MA & BUD should do much more code-sharing. BUD is a great hub- so why not connecting QR's Doha service active in the MA hub-and route- system?! Likewise the AA-flights. There is huge demand from Albania, Kosovo etc. for flights into N.Y.- as you could have seen here: http://www.scanderbegair.com .


User currently offlinedean From Hungary, joined Apr 2005, 216 posts, RR: 1
Reply 10, posted (3 years 7 months 3 weeks 2 days 1 hour ago) and read 2090 times:

Quoting OP3000 (Reply 3):
The issue that BUD has is that unlike other OW hubs in Europe, it has relatively little potential for long haul. Pretty much the only O/D route is JFK-BUD, which AA flies year-round.

There is potential though, and I wouldn't call it that little. There is a significant pax and cargo traffic from East Europe to USA and Asia too. With some good feeder flights from the region I can see potential in long-hauls to California, Florida and Asian OW hubs. Maybe looking for less covered markets would be also a possibility.

Quoting PEET7G (Reply 6):
On the contrary, there is a huge uncovered market and that is OW. While you are right that the 2 mentioned airports are the main competitors, but the future of MA and to some extent BUD relies on what is on the minds of OW alliance, MA management and etc. Unfortunately there was little to no action on their part regarding BUD, however no serious alliance can ignore this vastly developing region of the EU and leave a blackspot on their network. The 2 fastest growing markets in East Europe are Romania and Bulgaria, and accessing those from London, MAD or even any of AB's hubs is impossible. So I am pretty confident that something has to happen, or OW will totally lose this market to Star and Skyteam.

OW (with MA) is losing that market! I don't want to blame OW, to be honest I understand them from business aspects. There is a market with growing demand and strong competition. It could be big but for sure it is not a niche market. What they need is a good product at a good value AND shorter connections. MA was not able to establish something like this in the recent past. In the mean time other alliances and carriers got their segments on the market... and MA? They emerged from bankrupcy, arranged its owner relations.

I am also sure that something has to happen, but I can't see the happy ending. MA is in a bad position in its only market. OW could help with long-hauls but there might be more important markets for them...

Quoting krisyyz (Reply 7):
Correct me if I'm wrong, but I recall something like 80% of MA's long-haul passengers were transit pax, who connected through BUD to other destinations. When MA rightly ceased long-haul ops those pax simply found other direct ways of getting from A to B. Do you happen to know what percentage of pax traffic was made up of MA long-haul pax?

majority of pax were transit on MA long-hauls. 80% would be close to correct.


User currently offlineHT From Germany, joined May 2005, 6525 posts, RR: 23
Reply 11, posted (3 years 7 months 3 weeks 12 hours ago) and read 1744 times:

LCC ...: I always considered Budapest (and thus BUD) to be a destination for tourists, but apparently nowadays it is hard to get enough yield from this type of pax to break even. Maybe it is the HAJ-end of the route, but neither AB nor 4U was able to make HAJ - BUD sustainable for long.
-HT



Carpe diem ! Life is too short to waste your time ! Keep in mind, that today is the first day of the rest of your life !
User currently offlineconnector4you From Canada, joined May 2001, 932 posts, RR: 2
Reply 12, posted (3 years 7 months 3 weeks 5 hours ago) and read 1651 times:

Quoting dean (Thread starter):
As for the US carriers, AA opens its daily service to JFK this spring (providing the only oneworld longhaul from BUD), competing againts DL (which I heard is going to be downgraded to 4 weekly)

Not really, both American and Delta are showing daily runs to JFK for the month of July 2011 accordingly to Amadeus. That's twice daily !!!!!!!!!!!!

Way much better than Vienna who's got only one daily JFK service operated by Austrian.

It seems that there's more competition on Budapest to New York route with possible sweet TATL deals this coming summer. Check it out folks !


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