Hannover Airport is developing a diversified business model that plays to its strengths and recognises its people as a critical element to success. New Chief Executive Martin Roll explains the plan to Mark Pilling
There are many aviation workers who have wonderful views from their airport desks. Prof Dr Martin Roll, who is CEO and co-Managing Director of Hannover Airport, is one of those lucky individuals.
His office is especially unique, as the large wraparound windows that offer a view of a green, and on the day of our interview a damp German morning, are those of the airport’s original air traffic control tower.
Built in 1936, this modest building is only two-storeys high – controllers in the 1930s were directing much smaller aircraft than today – but its construction in the Bauhaus style is a talking point for every visitor.
Roll was appointed Managing Director of Hannover Airport in March 2022. At the beginning of this year, he was named CEO and Chairman of the airport’s management board, following the retirement of long-serving CEO Raoul Hille.
The airport is in the middle of north Germany on the outskirts of the 13th-largest city in Germany and fourth largest in northern Germany after Berlin, Hamburg and Bremen.
Roll’s priorities are to steer this mid-sized airport with its well-established business model back into the black, restoring its pre-pandemic traffic levels, growing the network, and executing on a target of achieving net zero carbon dioxide emissions by 2045.
After the hard pandemic years, traffic, revenue and profits are returning at Hannover. “The important message is that at the operating level our result is positive,” said Roll. “I’m really happy about that because it shows our business model is intact.”
However, it will take two more years for the business to return to a net profit level, he noted. “It is a bit of a different story here because we pay a lot of interest on loans taken on during Covid to finance the airport business.”
Traffic recovery
Hannover’s peak traffic year was 2018 at 6.3 million passengers, with 2019 just slightly lower, as the airport made a name for itself as a connecting point for most of Europe’s main hubs and is served by most of the continent’s mainline carriers.
That remains a strength for Hannover, and one Roll’s network development team is determined to build on, while leisure carrier TUIfly, among others, and Lufthansa Group low-cost carrier, Eurowings also serve several destinations, predominantly in the Mediterranean.
However, a sluggish German economy has meant traffic has not rebounded as quickly as in many other European countries. “Last year we had almost 4 million passengers and this year we’ll probably have around 4.6 million,” said Roll. In 2024, it will exceed 5 million, which Roll views as an important benchmark in Hannover’s regrowth.
“For our airport, the business model is just fine because we are focusing on three areas, with each about a third of our traffic, and that is business, touristic and VFR [visiting friends and relatives],” explained Roll.
Today the airport has about 60 destinations with direct service. “What we did this year was really focus on expanding traffic into the major hubs,” said Roll. This starts with Frankfurt and Munich within Germany, followed by London, Paris, Amsterdam, Vienna, Zurich, Copenhagen and Istanbul, with the latter increasingly important for its Asian and African connectivity.
“We talked a lot to the airlines that serve those hubs and we have seen good increases in the number of flights and the frequency of flights to those hubs,” said Roll. “For instance, we need at least five daily flights to Munich to really catch all the waves without delays.”
A new capital city added to Hannover’s network this April was Latvia’s Riga, with airBaltic operating twice-weekly Airbus A220 services.
“Next year, we expect several new destinations and we’re in talks with airlines,” said Roll. The Routes World show in Istanbul in October will be an important marker of the airport’s progress as airlines’ summer 2024 plans get firmed up.
Focus Italy
A big target for more destinations is Italy, with extra incentives in place to stimulate new routes in addition to the classic incentive scheme that offers lower charges for the first three years of a new route, said Roll. “Italy is a focus market which is very much underserved from Northern Germany,” he said.
“In our scheme for landing fees we will next year put in incentives for flying into special markets,” said Roll. “One of those markets will be Italy because we want more direct traffic, and we feel from the market that this is very welcome, and we expect several new destinations next year.”
Today, Hannover has no direct service to Rome, while Milan is only served when the city hosts trade fairs at the massive Hannover Messe exhibition ground. “This is absolutely not enough for the big Italian market,” said Roll.
As Hannover looks to next year, “the focus in 2024 is on Italy, Europe and the Mediterranean,” said Roll. “We are in talks about flights into North America and into the Gulf region, but that’s more of a long-term perspective.” This means at a minimum of two to three years.
“Airlines are interested because in Lower Saxony, the state Hannover is in, we have a very strong industrial base, especially in the automotive industry,” said Roll. Hannover is the largest automotive centre in Germany with firms like Volkswagen and Continental Tyres located there.
The airport is also located on two major axes on Germany’s autobahn network and is served by a suburban railway line with a 24-hours-a-day direct service to the city’s major rail hub.
While Hannover has made a name for itself as a strong connecting airport, and unashamedly ensures the network carriers, as well as the traditional leisure players, are well represented, it remains keen to add more low-cost carrier service.
In mid-August, Eurowings announced a further expansion in its return to Hannover, basing an aircraft at the airport to serve four destinations in the winter season. From summer 2024, the carrier will base a second aircraft at Hannover and serve a further 10 cities, mainly in southern Europe and Italy. “Interestingly, we do see Ryanair and easyJet several times a week because they miss the night curfew in Berlin and Hamburg,” said Roll. Hannover is fortunate because the two-runway airport can operate 24 hours a day and is the alternate for both Berlin and Hamburg.
Operations
A major question for any airport manager in Europe this year is operational performance coming off a tough 2022 when delays were rife at some locations. Hannover is more than coping with 2023’s traffic levels. “I am very happy about performance here actually. The main reason is because we are adequately staffed,” said Roll.
“One big advantage is the airport did not, like other airports, bring in any redundancy plans for employees during Covid, so most employees stayed on board,” explained Roll. This was assisted by government financial schemes where the state paid the bulk of salaries.
“Especially this year we have even closer co-operation with all other parties working on the airport, in particular the Federal Police and the security control for passengers [operated by Securitas], plus a willingness to increase staff levels really helped to have a very stable business,” said Roll.
During the first holiday weeks in summer, 97% of passengers went through Hannover’s security control in less than 15 minutes – and ensuring such performance levels is something the airport prides itself on. In recent months it has introduced three initiatives aimed at improving the customer experience.
The airport’s three-letter code – HAJ – is used in the HAJway tagline to describe the processes. The first is a fast-track security process. This allows travellers to pre-book a slot for security control up to 48 hours before travel. Passengers then have a 20-minute timeframe to enter security.
“It works very well, passengers really like it, and it flattens the curve of people arriving at security control and reduces queues,” said Roll. Other German airports such as Berlin Brandenburg have introduced similar systems.
The second, a self-service bag drop system, has been introduced in partnership with the airport’s largest customer TUIfly just in time for the summer season. This was fully operational in June, as was the third product: fully digitised parking for short-term parking, eliminating the need for car park tickets.
These features are not revolutionary, but “the combination of the three really helps make the process very easy for passengers and that is part of our long-term strategy,” said Roll.
“We want to be the most attractive airport in northern Germany for all passengers,” he added. “That means as a mid-size airport we want to provide excellent connectivity of course, but also fast and easy processes.”
On the ground services side, the main operators are the airport’s 100%-owned subsidiary Hannover Aviation Ground Services, the largest handler at the airport, and AviaPartner.
Roll has a stint in ground services on his CV, having spent nine years up to 2019 as the MD of Aviation Handling Services, the leading independent passenger handler operating at 14 German airports.
Prior to that Roll had his first role at Hannover Airport as its senior-vice president corporate development and spent six years in roles at Lufthansa and Lufthansa Cargo. Before rejoining Hannover, he spent two and a half years as CEO of large German recruitment firm persona group.
People and culture
This combination of experience has inspired Roll, alongside his new co-Managing Director Maik Blötz, to develop a new leadership philosophy at Hannover with the focus on people and culture, and sustainability. This was introduced to the business on 1 January.
“When we discussed our leadership approach last year, we decided a big element for us is to really focus on people and culture,” explained Roll. A practical example of this is to abolish the term
HR and create a people and culture department in its place.
“This does not mean from one day to the other that everything changes, but we are working very much on our leadership model,” said Roll. “That’s the process we just started with the renaming.
We are in the process of developing new leadership guidelines. But guidelines are just that. The next step is how to really live it and what to do if someone does not live it.
“This is a process that will last for the whole year and then be monitored and followed up,” he said. “We really want to show the employees that they’re not just employees. They are people working at the airport and they are part of the airport family.”
The rationale is to create a workplace and culture that ensures the airport retains its people and is attractive to new talent. “So, we put a lot of focus on sustainability linked to employees and people, in addition to sustainability linked to the environment,” said Roll.
“We set out a strategy now where we will be completely CO2 neutral in 2045,” stated Roll. “What I really like about that is we will be CO2 neutral through measures on our own campus – we’re not buying a forest somewhere else and saying: ‘now we are neutral’.”
The clear plan has photovoltaic solar systems; new, efficient heating and cooling systems; and a combination of other measures to reach the target.
“Interestingly, it’s affordable. We will do it step by step until 2045. And we are already well advanced. Compared to 20 years ago we have already reduced the CO2 emissions by more than half,” Roll said. Measures include having a mostly electric ground handling fleet and the installation of lighting sensors in the airport’s parking garages.
Hannover has no plans for local Sustainable Aviation Fuel production today, but with a large land area “we keep the opportunity to do new developments,” said Roll. “While we are not planning for SAF production we plan to provide everything to offer SAF fuelling at Hannover and the same for electrical power.”
There is a general aviation operator at the airport looking at small all-electric training aircraft and the airport will be ready with charging facilities for that too, when needed.
Diversification
One of the ever-present buzzwords for airport leaders in recent years has been diversification. This took on even more prominence when traffic dried up during Covid and revenue dropped, with airports seeking more business lines from sources other than airlines or air cargo carriers.
According to Roll: “Diversification goes into different areas for us. Firstly, on the passenger side we don’t just focus on one traffic segment, but we really have a third VFR, one third touristic, and one third business. That’s important because immediately when flying was possible again after Covid VFR traffic immediately took up and it is at pre-crisis levels now.”
At Hannover, “our cargo business focuses mostly on high-end specialised cargo so we’re not planning a mega hub but operate cargo flights as a feeder among others, into a local road hub,” said Roll. The airport has regional hubs for FedEx and Amazon, for instance.
While cargo plays its part, the airport’s ability to develop its business campus is proving to be a significant asset. “We have a large office park here, located in a natural green setting, where we have a range of buildings rented out to companies in aviation, logistics and IT,” said Roll.
The campus is owned and operated by the airport company. “This brings in money even during difficult periods like Covid because the rents continue to flow,” said Roll.
Other non-aviation revenue streams include its 50% ownership in the firm that operates most of the restaurants at the airport, while it also owns and operates the parking lots, with some 14,000 parking spaces.
“Hannover is a big city but the surrounding area is very rural so many people come here by car,” he said. “We deliberately decided to own the parking lots ourselves, and all the garages, so that we can have that as another source of income.”
Additional development of the business campus is an important component of the updating of the airport’s infrastructure masterplan up to 2040; that development is underway with a deadline of the end of 2023.
Luckily for Hannover, the airport’s basic terminal and runway infrastructure is more than adequate. It is one of the few airports in Germany with 24/7 operations, and it has two runways that are operationally independent.
“We have the infrastructure airside which is fully sufficient for more than the next 20 years – it is a really big asset,” said Roll. On the landside, Hannover has three terminals, which provide plenty of capacity for the foreseeable future.
“The 2040 masterplan will not involve building new terminals because for the next 20 years we will have enough capacity,” said Roll.
This puts Hannover in a luxurious position in terms of infrastructure development. The airport is 70% owned by the city of Hannover and the federal state of Lower Saxony with the remaining 30% owned by infrastructure investment firm ICON, which bought its share from Fraport in 2018.
In 2023, the airport’s revenue will reach some €150 million (US$163.7 million), with about two-thirds of this coming from aviation-related sources and the rest from non-aviation sources.
From a traffic perspective, it will take until 2027 or 2028 for Hannover to top the 6.3 million peak passenger levels seen in 2019. This is not so relevant other than as a comparison, as Roll’s priority is to sustain and develop the airport’s business model and attract new service.
This interview with Martin Roll was done remotely via Teams, but I am sure if the visit had been in person, we would have had lunch at the airport’s Skylight restaurant. Roll is proud of this eatery, which is dedicated to airport staff and those working at businesses at the airport.
It epitomises the approach to people that Hannover champions. “I would say it is the best restaurant for employees that I know in the airport world,” said Roll. “It’s on a gourmet level and in a prime location with a full panoramic view of the apron.
“It’s part of the people and culture thing,” he went on. “It’s just completely usual that everybody goes for lunch. When I’m not travelling, I make sure to go there every day and I sit with different groups of employees each time if I don’t have an appointment.”
Book us in, Martin…
