Strategy and managementStrategy

Thinking sustainably, acting responsibly

Flughafen München GmbH (FMG) combines sustainable economic value added with ecological and social responsibility. The airport’s business activities have a major impact on various areas and stakeholders: on Munich, Bavaria, and Germany as business locations, on the region and its inhabitants, the airport staff and passengers, as well as on other companies in and around the hub plus other stakeholder groups. In addition, the municipalities and districts of Bavaria are profiting from the enduring employment boom at the airport. However, the company is also aware of the negative effects that its business may have and is making every effort, through suitable initiatives and measures, to avoid these, keep them to a minimum, and, where required, compensate for them. In this context, for example, Munich Airport aims to be carbon-neutral by the year 2030.

Planning for the future today

For the future, the company has identified three key strategic challenges:

  • The needs-based and demand-oriented expansion of the infrastructure at the airport
  • The imminent generational change
  • The digital transformation

The airport defined guidelines for its medium-term development in the Strategy 2025. This describes five key fields of action for the successful operation of Munich Airport:

  1. Airside traffic development
  2. Landside access and traffic development
  3. Seamless travel (contribution to digitalization and customization of the travel chain)
  4. Expansion of non-aviation business
  5. Off-campus growth

Overview of Strategy 2025

Graphic: Overview of Strategy 2025

The fields of action are the result of scenario analyses on the future of aviation and of talks with the stakeholders. The initiatives and measures from the sustainability program serve to realize the strategy and thus bring about the further development of the airport. FMG measures the success of implementation using defined key performance indicators. A fundamental review of the Strategy 2025 is planned for 2019, in order to identify any areas that need adjustment and to take stock.

Experiencing «M»

Munich Airport Group places great importance on anchoring its brand values in the Group, and on making the brand promise «Living ideas – Connecting lives» something that can be experienced by all the various stakeholder groups. The continuous further development of the «M» brand is therefore an indispensable component of the corporate strategy. The climate protection strategy, for example, underlines the «Responsibility» brand value and supports the positive perception of the airport as an environmentally aware and sustainable company. And with the launch of the newly developed subsidiary brand LabCampus, Munich Airport is highlighting its commitment to innovation. 80 percent of staff know what the brand «M» stands for and its significance for their daily work. This is also true of the customers1): 60 percent said they felt that Munich Airport was particularly customer-oriented. 51 percent stated that the customer experience at Munich Airport is significantly better than at other airports. Its identity as a premium airport with a Bavarian core also cultivated a strong emotional connection for passengers:

59 percent named Munich as their «favorite airport», while 66 percent perceive «M» as a trustworthy brand. 63 percent of those surveyed viewed Munich Airport as «very innovative». When it came to «family friendliness», the airport was able to improve on last year’s score by five percentage points, rising to 63 percent.

1) External brand study, market research institute: IMPACT IRC, October 2018

Expansion plans

Planning and expanding in line with requirements

Strategy 2025 highlights key issues for the refinement of the business model and sets the course for Munich Airport’s future growth. Against this backdrop, FMG is expanding the airport infrastructure based on need, networking various transportation operators, and is actively involved in the expansion of the landside transport services – all while keeping quality and the changing needs of customers brought about, for example, by increased digitalization, at the heart of its work. Negative effects on the environment and the area around the airport are kept as low as possible, for example by applying extensive compensating and noise protection measures.

Terminal 1: meeting expectations, enhancing quality

In many respects, Terminal 1 can no longer meet the quality standards of passengers and the official requirements on control facilities. The building will therefore be extended to include a new gate with needs-based passenger handling facilities. The pier, which will extend 350 meters into the west apron, will be able to accommodate up to twelve aircraft. This renovation is also creating new retail and catering offerings as well as two large airline lounges, while simultaneously improving the passenger handling processes through centralized security zones; the aim is to make the area significantly more appealing to passengers and airlines in the non-Schengen segment. The first milestone in the realization of this plan was reached in autumn with the planning approval notice; the supervisory bodies had already spoken positively about the construction of the new gate beforehand. The preparatory building works on the apron began at the end of 2018; commissioning of the new gate is provisionally planned for 2023. At that time, Terminal 1 will once again be able to cater for the passenger numbers expected in the coming years, to international quality standards. Total project costs of around 455 million euros have been budgeted for the expansion project, which FMG will source from its own funds.

Photo: LabCampus
With the LabCampus, a new type of urban center is being created on the airport grounds.

New lounge for passengers

Terminal 1 already has a new premium address: the «Airport Lounge World», which extends over two floors, opened in Departures/Arrivals B last October. For a fee, all passengers can come into the well-being area, covering 1,700 square meters, to relax and take a break.

LabCampus: collaboration, interaction, and ideas for the future

In the northwest of the airport property emerges the cross-sector innovation center called LabCampus. Knowledge carriers, global players, start-ups, and creatives working in areas such as mobility, digitalization, and security, will find the workspaces, showrooms, project and conference spaces here that they need for systematic and networked research and development work. As a cross-sector meeting point for innovators from the most varied of fields, LabCampus will benefit in particular from the airport’s global access, and the constant presence of thousands of international guests.

2018 saw the launch of a number of important developments for the future: Research institutions such as the University of Erlangen-Nuremberg, UnternehmerTUM GmbH, and the Fraunhofer Institut have committed to being innovation partners. The renowned Massachusetts Institute of Technology (MIT), Cambridge, which was involved in the concept stage of the establishment and development of the new LabCampus at Munich Airport, is also on board. Construction on the first two new buildings at the innovation center is set to start at the end of 2019. Over the course of 2019, the first research results from the cooperation with MIT will be published. The MIT Senseable City Lab will initially work with Munich Airport as a research partner for three years, in order to develop LabCampus into an innovative Smart City.

Third runway remains the most important future project

Politics determines the schedule

The ruling coalition parties, CSU and Freie Wähler (Free Voters), have agreed to impose a five-year moratorium on the construction of the third runway, with the result that the project cannot be pursued at present. The third runway nonetheless remains the most strategically important expansion project for Flughafen München GmbH. The planning permission is still valid following the ruling of the German Federal Administrative Court.

Important hub function

This moratorium-induced delay in realizing the expansion project will lead to a further exacerbation of the already existing capacity bottlenecks in the runway system over the coming years. The growth potential for further connections will diminish as the time window still available now becomes filled with additional take-offs and landings. If airlines cannot continue to expand to meet demand in Munich, they will move their flights to other airports with available capacity. In the worst-case scenario, Munich could lose its status as a high-performance hub airport in the international aviation industry. The current attractive direct connections offered to and from Munich would also come under pressure in the long-term, in the absence of the third runway.

Apron extension to the east: more space for more aircraft

At peak times, there are frequently no available aircraft stands on the aprons of Munich Airport. This is because of the increased number of flight movements and the use of wide-bodied aircraft like the Airbus A380, which require a lot of space. As further increases in traffic are expected in the coming years, but utilization of capacity is already currently high, aircraft must stay longer on the ground between landing and take-off and the demand for aircraft stands continues to rise. For this reason, the apron on the eastern side of the airport near the T2 satellite building will be expanded as of 2019 with the addition of 23 aircraft stands for all aircraft types. The new area will then have a modern infrastructure, in order to be able to guarantee safe, efficient, and sustainable aircraft handling. For example, the taxiway and apron lighting will be designed using modern LED technology with flight schedule-dependent switching. The installation of charge columns for handling equipment and the stationary ground power supply for aircraft are also contributing to a reduction in emissions from aircraft handling. Completion of the apron expansion is planned for spring 2021.

Photo: New tunnel
The new tunnel runs directly under the airport and enables suburban and long-distance trains to pass through.

New road and rail connections

The «Erdinger Ringschluss» is taking shape: The official starting shot for the eastward extension of the railway tunnel by approximately 1,500 meters was fired in September 2018. The tunnel itself is to be completed by the airport in 2021, and will then be fitted out by DB Netz AG with the required technical equipment for train services. Suburban and long-distance trains will then be able to pass via the airport in the future. The first stage through to the Schwaigerloh reverser forms the basis from which the planned improvements in railway transport to the airport can be realized. This is also simultaneously dependent on the construction of the second trunk route through Munich, the first preparatory measures for which began in 2018. The Neufahrner Kurve, which makes possible direct rail access in the direction of Freising and Regensburg, has been operational since December 2018. The trains are now running hourly. Furthermore, the double-track expansion of the Munich–Mühldorf–Freilassing rail route including the Walpertskirchener Spange was classed as an «urgent need» in the Federal Transport Infrastructure Plan. In terms of road projects, both the new Freising northeastern bypass as part of the 301 federal highway and the Freising west bypass are well advanced with construction progressing on schedule. Both route stages, which are important link roads for passengers and staff, are due to be completed by the end of 2020.

Strategic field of action: Landside access and traffic development

Graphic: Strategic field of action: Landside access and traffic development

Digital offering and seamless travel

With its digitalization strategy, Munich Airport intends to secure the future of its business model. The aim is to help shape technological innovations in order to be able to offer passengers a variety of services that will support them on their journey. For the airport, this specifically means that services are also available digitally. FMG sees digitalization as key to a smooth customer journey: punctuality of departure and arrival, good navigation, and route guidance as well as appropriate shopping options for guests. Thus, through digital processes and tools a seamless travel experience is created without hindrances or delays, which is enhanced with offers that are individually tailored to the needs of passengers and customers.

The four fields of digitalization at Munich Airport:

  1. Establishment of digital end customer contact for better passenger services
  2. Increase in data quality and availability for enhanced data utilization in decision-making processes
  3. More intensive networking of internal and external data to increase system quality
  4. Greater automation of processes

As the digital transformation progresses, the risk of cyber crime and attacks on IT systems also increases. The Information Security Hub (ISH) at Munich Airport aims to counter these risks. FMG cooperates with experienced IT security firms in the operation of the ISH. The high-tech center of competence for IT security, housed in the former airmail sorting center at the airport, is used for training courses, conferences, and all types of events.