US embassy cable - 03FRANKFURT1549

UNCLAS SECTION 01 OF 04 FRANKFURT 001549 
 
SIPDIS 
 
DEPARTMENT FOR EB/TRA BYERLY, PARSONS, FINSTON, WALKLET 
DEPARTMENT FOR EUR/AGS, AND EUR/ERA 
FAA FOR API-1, AEE-1, AIA-300 AND ASC 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EAIR, ECON, EFIN, PGOV, SENV, GM 
SUBJECT:  FRANKFURT AIRPORT EXPANSION: 2006 COMPLETION TOO 
OPTIMISTIC 
 
REF: A) 2002 FRANKFURT 5496; B) 2002 MANILA 6579; C) STATE 
29193 
 
1.   (U) Summary and Comment: The expansion of Frankfurt 
airport, Europe's second largest, is moving forward, though 
several obstacles may delay the new runway planned for 2006. 
Legal complaints, a chemical factory in the flight path of 
the planned northwest runway, a controversial night flight 
ban and the uncertain cost of expansion may all slow the 
timeline.  Frankfurt airport may not see its fourth runway 
constructed until 2007 or 2008.  The Hesse government is 
examining various noise abatement measures and studies, but 
has not yet integrated the EU directive on noise management 
in its plans.  The decisive election victory in February 
2003 of Hesse Minister-President Koch and the Christian 
Democratic Union ensures continued political support for 
expansion plans.  End Summary and Comment. 
 
Chronology of Expansion Plans 
----------------------------- 
 
2.   (U) Frankfurt airport is one of the world's leading 
international air transportation hubs.  It is Europe's 
largest cargo airport and ranks second in passenger traffic 
(50 million passengers in 2001) to London's Heathrow. 
Directly and indirectly, the airport supports 142,000 jobs 
in Hesse and 170,000 throughout Germany.  In 1997-98, 
Lufthansa CEO Juergen Weber proposed a new runway to meet 
growing demand.  Fraport, the Frankfurt airport's managing 
authority, agreed. 
 
3. (U) In what is referred to as the "mediation process" 
initiated by the previous state government, a panel of 
interested parties analyzed the expansion proposal for 
several years and made formal recommendations in January 
2000.  These included variations for a new, fourth runway 
(northwest, northeast and south).  The Hesse state 
parliament then proposed the northwest variant; only the 
Green Party caucus completely rejected the expansion 
proposal.  Following a regional planning review, the 
northwest runway option was selected in June 2002.  Volker 
Zintel, Fraport's Senior Vice President for Traffic and 
Retail, said that new runway construction will come first, 
followed by a new "Terminal 3" six-to-twelve months later. 
The expansion will increase the airport's capacity by 50 
percent to 75 million passengers per year. 
 
4. (U) The next stage of the approval process, the "project 
planning and certification procedure," includes feasibility 
studies, noise and environmental impact studies, public 
comments, evaluation of a proposed 11 p.m. to 5 p.m. night 
flight ban, formal certification of expansion plans and 
amendment of the airport license.  A final decision, 
expected in 2005, will certainly face legal challenges. 
Numerous complaints have already been filed by expansion 
opponents (see below paragraphs 7-9). 
 
5. (SBU) Fraport had originally hoped for a 2006 completion 
date for the fourth runway to maintain Frankfurt's position 
in the face of strong competition from Paris and Amsterdam. 
In light of various obstacles outlined below, however, 
Zintel described 2006 as "optimistic" for runway completion 
and 2008 as more "realistic."  Gerold Diecke, the 
commissioner for South Hesse (Regierungspraesident) who 
supervises the regional planning procedure, also says he 
expects at least a one year delay. 
 
CDU Election Victory Means Continued Support for Expansion 
--------------------------------------------- ------------- 
 
6. (SBU) The February 2, 2003 election gave the ruling 
Christian Democratic Union (CDU) an absolute majority in the 
Hesse state parliament, ensuring continued political support 
for expansion.  Incumbent CDU Minister-President Koch, who 
also sits on Fraport's supervisory board, strongly supports 
expansion plans as beneficial to the overall future economic 
growth of his state. 
 
Obstacle to Expansion: Lawsuits and Complaints 
--------------------------------------------- - 
 
7. (SBU) Fraport and Hesse Economics Ministry officials are 
braced for strong opposition to the airport's expansion, but 
hope the battles can be confined to the courts.  The 
building of the airport's third runway in the 1980s inspired 
numerous protest actions including a bomb attack on a 
Fraport official's home (he was unharmed) and several 
violent demonstrations including one in 1986 in which two 
police officers were killed.  Dr. Manfred Schoelch, Deputy 
Chairman of the Fraport Executive Board, said that even if 
the planning process is free of violent protest, "Once trees 
start being cut, things could change."  Fraport's major 
opponents this time, however, are not mainly environmental 
groups but the cities, counties and citizen groups that will 
be affected by expansion.  They have filed lawsuits on 
issues ranging from noise to administrative matters.  Three 
dozen communities have gathered 500 million Euros for court 
battles.  "The lawyers will be busy," a Hesse Economics 
Ministry contact told us. 
 
8. (SBU) The city of Offenbach, southeast of Frankfurt, has 
been leading the fight against expansion.  The 116,000- 
inhabitant city has already devoted considerable resources 
to making its case in court.  Several lawsuits will run 
simultaneously with the certification process, while others, 
such as those related to compensation, cannot be filed until 
the process is completed in 2005 and its results made 
public. 
 
9. (SBU) Lothar Klemm (Social Democratic Party), former 
Hesse Economics Minister under a previous Social Democratic 
Party government and member of the Fraport supervisory 
board, said he views the legal battles as the most serious 
challenge to airport expansion.  "If lawsuits make expansion 
timelines unreliable, then market forces may make the 
project obsolete.  Carriers will move their business 
elsewhere."  Fraport External Liaison Officer for the 
Executive Board Herbert Becker was more optimistic.  "Most 
court decisions in the last three years have been friendly 
to airports," he said.  Due to a change in German 
legislation, Becker said, construction can start immediately 
after the Hesse Economics Minister approves expansion.  In 
the case the courts rule in favor of expansion opponents, 
compensation will be awarded and/or plans modified. 
 
Another Obstacle to Expansion: Ticona Chemical Plant 
--------------------------------------------- ------- 
 
10. (U) Fraport's planned northwest runway will end less 
than two kilometers from the tall smokestacks of the Ticona 
chemical plant, considered obstacles under ICAO Annex 14. 
The plant, which employs 1,000 people, is home to the Ticona 
company's just completed 20 million Euro administrative 
building.  Relocation, estimated to cost around USD 1 
billion, is no longer under consideration.  Instead, 
according to Fraport External Relations Representative 
Christine Huppert, the approach altitude for landing flights 
will be raised.  Officials at Deutsche Flugsichering, the 
German air navigation services provider, said that a waiver 
would be required from the Federal Transportation Ministry 
to routinely overfly the smokestacks, and "the issue is far 
from resolved." 
 
11. (SBU) In addition, Ticona also uses and produces harmful 
chemicals, posing the twin risks of harmful release of 
chemicals should a plane crash into the plant and damage to 
aircraft if an explosion occurs at the plant.  The matter 
may finally end up in the courts.  Former Economics Minister 
Klemm blamed the Koch government for not taking 
environmental problems such as Ticona seriously enough, 
running the risk of additional environmental studies and 
further legal challenges.  According to media reports, the 
Federal Ministry of Transportation has asked the Disaster 
Management Commission of the Federal Environment Ministry to 
investigate the Ticona issue. 
 
The Controversial Night Flight Ban 
---------------------------------- 
 
12.  (SBU) Among the compromises resulting from the initial 
2000 review was a proposal for a 11 p.m. to 5 a.m. night 
flight ban on all traffic at Frankfurt once the runway is 
operational in order to win political and popular support 
for construction of the fourth runway.  Minister-President 
Koch has stated frequently in public that there will be an 
absolute night flight ban.  Fraport understands that the 
compromise is crucial to ensure the airport's growth and 
address local residents' concerns. 
 
13. (SBU) Several cargo carriers, including Lufthansa Cargo, 
oppose the ban. Lufthansa wants a "practical ban" that 
allows exceptions.  Becker said Lufthansa cargo flights with 
destinations in North America, Hong Kong and South Africa 
will be most affected.  He felt processing of point-to-point 
cargo traffic (60 percent of total) could be relocated to 
Hahn airport, 110 kilometers to the west, but transit cargo, 
which has to be reloaded onto other planes would be a 
problem.  About 150 flights in total would be affected by a 
ban, although Fraport official Schoelch maintains that all 
but a handful could be moved to daytime operations without 
too much trouble. 
 
14. (SBU) FedEx is also "not happy" with Koch's insistence 
on the ban, but acknowledges there are "political realities" 
involved with expansion.  FedEx has ten flights per week 
landing between 11 p.m. and 1 a.m. that would be affected by 
the ban.  Fedex's Senior Manager for Operations Axel Hoock, 
when asked whether his flights could be moved forward, said 
he imagines the competition for slots shortly before 11 p.m. 
would become very intense.  The larger problem, Hoock said, 
is that the night flight ban would "take away the 
possibility for FedEx to expand its express cargo operations 
in Frankfurt in the future."  DHL Airport Affairs Manager 
for Germany and Eastern Europe Markus Otto, said that the 
night flight ban also "represents a clear competitive 
disadvantage for Frankfurt airport, for business in and 
around Frankfurt and for Germany in general.  It also 
constitutes a dangerous precedent for airports in Europe." 
 
Frankfurt-Hahn Airport System? 
------------------------------ 
 
15. (SBU) In 1998, Fraport purchased a 64 percent majority 
share of Hahn airport, a former U.S. military airbase 
located in neighboring Rhineland-Palatinate (R-P), 110 
kilometers from Frankfurt airport.  Hahn is useful for 
charter flights and point-to-point traffic, according to 
Fraport, and is one of the continental European bases of the 
low-cost Irish carrier RyanAir.  The Hesse government hopes 
that some charter and cargo flights that need to operate 
during future night flight ban hours will move from 
Frankfurt to Hahn Airport.  In anticipation of Hahn's new 
importance, the state government of R-P is investing almost 
one billion Euros in improvements, including expanding its 
runway to accommodate intercontinental flights.  It can 
already handle Boeing 747 cargo flights.  Improved road 
connections should be completed in two years and a rail link 
in 5-10 years.  The Hesse state government is also 
contributing 20 million Euros for the expansion of Hahn, a 
move criticized by Hesse taxpayers. 
 
16. (SBU) Anticipating Frankfurt's expansion and the night 
flight ban, the governments of Hesse and R-P have applied to 
the Federal Ministry of Transport to link Frankfurt and Hahn 
as an airport system under EU law, similar to 
London/Heathrow/Gatwick/Stanstead and Paris-De Gaulle/Orly. 
Such a designation would allow Fraport to transfer all night 
flights from Frankfurt to Hahn.  As the next step, the 
Federal Ministry must now forward the application to the 
Commission for its review as well as that of the member 
states.  The great distance between the airports will be a 
significant hurdle to overcome to secure the designation. 
Additionally, Fraport and Hesse officials have indicated 
that charter, cargo, and express-package flights would be 
shifted to Hahn.  This plan may be inconsistent with EU 
market access requirements. 
 
17. (SBU) Most cargo carriers find Hahn very problematic. 
Deutsche Post (German Mail) threatens to move its hub to 
another location.  FedEx complains that its distance from 
Frankfurt and other large cities would make overnight 
express service from Hahn impractical.  FedEx's Axel Hoock 
says Hahn is "not an option."  Lufthansa rejects the 
Frankfurt-Hahn system idea, because the distance is too 
great to maintain a maximum passenger transfer time of 45 
minutes. 
 
Costs: Lots of Uncertainty 
-------------------------- 
 
18. (SBU) By current estimates, expansion may cost up to 3.3 
billion Euros and could increase due to compensation claims. 
Some claims, such as for loss of property value, cannot even 
be filed until the certification process is completed. 
Thomas Norgall, a spokesman for environmental NGOs opposing 
the new runway, said candidly that their strategy is to 
"make expansion unaffordable."  Fraport's financial 
situation has already been hurt recently by problems with 
its 400 million Euro investment in Manila airport (Reftel 
B).  Fraport officials say the investment has already lost 
at least 200 million Euros. 
 
EU Directive on Noise Management 
-------------------------------- 
 
19. (SBU) The EU Directive on Noise Management must be 
transposed into national legislation by September 2003 
(Reftel C).  Germany has made little progress thus far. 
Draft legislation has yet to be finalized by the Federal 
Transport Ministry.  Hesse Economics Ministry officials 
admitted they had not really taken the EU directive into 
consideration in their review of noise management issues 
related to expansion.  The Ministry is implementing -- from 
summer 2002 to winter 2005/6 -- a noise quota system, with 
points assigned to seven different categories of aircraft. 
When a carrier has used up its quota, it can no longer land 
its aircraft in Frankfurt.  Looking to the future runway, 
monitoring stations are measuring noise, and various studies 
on noise impact are underway as part of the certification 
process.  Noise barriers and passive noise protection 
measures are being considered for the 13,000 homes that will 
be most affected by airport noise. 
 
20. (U) This message has been coordinated with Embassy 
Berlin. 
 
DAVIS