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Plans to develop Budapest airport area

Budapest Airport and local authorities are working together to develop the surrounding area and enhance the regional competitiveness of the airport.  

The airport’s first terminal is now a listed building

The operator of Ferenc Liszt International Airport operator has established the Budapest Airport Region Cluster (BARC) in conjunction with local authorities to develop the airport and the surrounding area. The aim is to enhance the profile of the airport and strengthen its competitiveness in Central and Eastern Europe. 

Speaking at a conference organized by BARC and Budapest Airport in conjunction with Airports Regions Conference (ARC) at the mothballed Terminal 1, István Papp, vice president of business development at the Hungarian Investment Promotion Agency, said the geographical advantages of Hungary would only become a true competitive advantage if linked with improved logistics.

“The airport infrastructure offers huge potential as it is considered underdeveloped in comparison with the economic potential of the country and the attractiveness of Budapest from a touristic perspective,” Papp said.

He added that Budapest’s airport is “comparable to Heathrow in terms of land size and the basic infrastructure as there are two parallel runways. We should take advantage of these characteristics and develop the air traffic infrastructure, logistics centers and the transport connection with the city. Airports are not only physical locations but are often recognized as economic zones and this is the philosophy we should adopt,” he noted. Comparisons with for example Barcelona International Airport were discussed at the event.

Business indicators for the airport are favorable. According to Budapest Airport, passenger numbers at Ferenc Liszt International Airport increased by 10% for 2015 to 10.3 million, representing a 12.5% annual growth rate that has outperformed most European airports.

Last year saw more than 92,000 air traffic movements and close to 91,500 tons of cargo. Employees of companies at the airport currently stand at around 7,500 and in total there are 65,000 jobs in Hungary associated with airport operations.

Passenger traffic is forecast to exceed 11 million in 2016 and surpass 12 million in 2018. The airport currently has 102 scheduled destinations by 41 airlines. Cargo traffic is forecast to exceed 100,000 tons in 2016 according to Budapest Airport.

“Our aim to be the leading airport in Central Europe and our main competitors are Prague and Warsaw. Vienna airport is at another level with regard to traffic volume, although we could compete in the quality of services and the level of passenger growth,” commented Gábor Szarvas, director for community affairs and environment at Budapest Airport.

As a central element of the airport development program construction of the HUF 50 billion, 145-room ibis Styles Budapest Airport Hotel has started, through a partnership of Budapest Airport and the developer, WING.

Budapest Airport plans to invest a further EUR 160 million on airport developments by 2020. This includes the EUR 17 mln Pier B that will deliver 27 new boarding gates and ten new bridges on a 10,000 sqm area with a proposed completion date of fall 2008. Terminal 2C is planned with a proposed delivery of 2020-2021.

With regard to logistics, Budapest Airport has undertaken development of a 13,000 sqm logistics base for DHL Express that is due to be completed next summer, employing 300 staff. A second 12,000 sqm logistics facility for TNT is due to complete in May 2017, employing a staff of 300. Further, New Cargo City is planned to deliver a 20,000 sqm cargo handling building in 2018.

Service hub

“We see the 18th district as a hub and service center for the airport and need to create a brand or image for the district as a so-called ‘airport city’,” said Attila Ughy, major of District XVIII.

“The population of the district has the lowest average age in Budapest in an area with a large supply of green space and easy access to the city center. The district is benefiting from taxes sourced from businesses associated with the airport. Although unemployment in the area is low at 1.5%, the airport area could provide a higher standard of employment possibilities,” he added.

The state has plans for a HUF 120-150 bln railway link between the airport and the center of Budapest and thus the regional cities. A further HUF 40-50 bln project would see the redevelopment of the main road between the airport and central Budapest.