Strategy

Strategy 2030

The impact of the Corona pandemic on the entire aviation industry persists at Munich Airport, whose structures are designed to handle some 50 million air travelers a year. In the industry’s biggest crisis to date, Flughafen München GmbH (FMG) continues to pursue responsible, sustainable value creation. The Group’s business activities have a significant impact on many different areas and stakeholders: the business locations of Munich, Bavaria and Germany, the airport region and its inhabitants, employees, travelers, and the companies based at and around the hub.

The Group Strategy 2030 includes economic, ecological, and social targets to meet the needs of all the Group’s stakeholder groups. The company must act consistently, taking into account its key stakeholders and the market, and grow sustainably in order to be successful in the long term: Economic efficiency is just as important as social and ecological responsibility. At the same time, growing social pressure and tougher competitive conditions can be felt in the industry.

The Strategic Vision 2030 charts Munich Airport’s path to the future within the top group of European and global hub airports: As the operator of a premium hub, FMG manages its business efficiently and aims to become a role model for sustainable air traffic throughout the industry. In partnership, a modern company with sustainable connections is created that acts as an innovative competitor and trustworthy brand close to its stakeholders. High quality, economic success and the exemplary role as a green mobility hub with social responsibility do not contradict each other.

Efficient and needs-based action – always with a view to the impact on the Group as a whole – leads the company to long-term, value-driven growth rather than short-term, selective gains. Market requirements and customers are the focus of business activities. In this context, the «M» brand forms a common framework, ensures consistency and provides orientation both internally and externally. «Living ideas – Connecting lives» means promoting cooperation and creating synergies. The restructured organization is thus faster and more adaptable.

The goals and measures from the sustainability program play a major role in implementing the strategy and thus in bringing about the further development of the airport. FMG measures the success of its implementation using defined key performance indicators.

In spring 2022, Munich Airport initiated the Group-wide «Top 22 for 22» process. «Top 22 for 22» includes forward-looking measures, cross-divisional initiatives and central projects that make a significant contribution to focusing and prioritizing the implementation of the new Group strategy.

New aircraft and sustainable aviation fuels are the essential building blocks for CO2-neutral aviation.

Strategy 2030 (photo)
Leading the way for the airport: Strategy 2030

Commitment to climate protection

Munich Airport is responding to the rapidly increasing demands for climate protection at both the national and international level with its committed climate protection strategy. In 2016, Munich Airport set itself an ambitious goal: to achieve carbon-neutral operation of the airport starting in 2030. To accomplish this, the airport is reducing the greenhouse gas emissions that can be attributed directly to its operations by at least 60 percent using various technical measures. The remaining 40 percent of emissions are to be balanced out by suitable compensation measures, preferably within the region. Flughafen München GmbH will be investing €150 million to accomplish this by 2030. Beyond that, Munich Airport has also committed to another ambitious climate action goal as part of the «Net Zero Carbon Initiative»: the reduction of CO2 emissions that can be influenced by the airport itself to net zero by 2050 at the latest. The idea is to keep emissions from arising in the first place through actions such as switching to renewable energy sources. In the reporting year 2021, the company analyzed various options for implementing the requirements of the «Net Zero Carbon Initiative» at Munich Airport.

The partnership between Flughafen München GmbH and Deutsche Lufthansa AG is also making a contribution to climate protection: Both groups see continuous investment in new aircraft and sustainable aviation fuels (SAF) as essential building blocks on the road to CO2-neutral aviation. Following a thorough technical inspection, in summer 2021 the tank farm at the site was certified for climate-friendly fuels of the future. This allows SAF to be delivered, stored and refueled at Munich Airport.

Facts and Figures

Munich Airport creates regional compensation project

FMG invests €2.5 million into a climate forest. Existing forests in Lower Bavaria and the Upper Palatinate are being optimized on around 2,000 hectares so that the trees can store as much CO2 as possible. In addition, the redesign aims to create a forest that is as climate resilient as possible and more resistant to pests and extreme weather than the current tree population. While the capacity of the MUC climate forest to offset CO2 is not yet high at the beginning of the project, it will grow to approximately 7,000 tonnes of CO2 per year by mid-century. Over the entire project period of initially 30 years, a total of around 90,000 additional tonnes of CO2 will be stored.

Long-term HR policy for a successful restart

FMG believes in the importance of an HR policy that focuses both on people and on the company’s performance. Its long-term personnel concept is based on the current business situation and the revised corporate strategy. Social trends such as demographic shifts and the digital transformation, as well as the necessary cultural change within the Group, are examples of key HR policy challenges. As part of its organizational development, FMG is streamlining its management level. Cross-departmental cooperation is strengthened by the company pooling competencies, sharpening the understanding of roles and breaking down organizational barriers within the Group.

Changes in the skills employees need to have also mean it is necessary to support the staff with personnel development concepts as they learn to work with new technologies and in more dynamic ways. In addition, new forms of digitalized and automated work processes are leading to an increased need for qualifications. At the same time, young professionals have different expectations of cooperation and management in the company – for example, they favor flat hierarchies or sustainable business practices on the part of the employer when looking for a job. A contemporary HR policy has to reflect these principles as well.

With the onset of the Corona pandemic in the spring of 2020, the company responded quickly and consistently to the massive drop in traffic and implemented various, high-impact ad hoc measures. For example, short-time working was able to reduce personnel costs in large parts of the Group by around €100 million in 2021.

Traffic has been increasing noticeably (photo)
Traffic in Munich has been increasing noticeably since the spring of 2022.

Specific goals to emerge from the crisis

The strategic goals of the Strategy Vision 2030 were applied to the airport group’s business areas. These business areas are also subject to overarching guidelines: cost efficiency, digitalization, manufacturing scope and depth, risk diversification, and sustainability.

Target
By 2024: Implementation of a holistic business continuity management system

Aviation business unit

The coronavirus pandemic caused the biggest crisis ever in the history of commercial aviation. Munich Airport had been operating close to the limit of its capacity up to the start of 2020. After that, overall traffic figures plunged to less than a quarter of their pre-crisis level. Thanks to vaccination and comprehensive testing opportunities, many travel restrictions – especially within the European Union – were eased during 2021 and international air travel was revived.

While long-haul traffic to and from Munich was the slowest to recover, bookings and load factors for flights within Europe to tourist destinations and private travel in general increased significantly, especially in the summer months and at vacation times.

The unilateral opening of the European Union to U.S. citizens led to significantly higher load factors on U.S. routes in the summer. However, it was not until the United States opened its borders to fully vaccinated air travelers from the Schengen area in the fall of 2021 that a breakthrough was achieved for business and leisure travel on long-haul transatlantic routes. The focus is now on re-establishing lost connections to destinations in the Asian region in order to be able to resume and expand its role as Bavaria’s gateway to the world after the crisis.

Target
End of 2022: Introduction of digital destination information

Facts and Figures

Transport network & destinations

2021 2020

Airlines (icon)

Airlines
64
86

Destinations (icon)

Destinations
187
226

Countries (icon)

Countries
55
69

Munich Airport ensures connectivity for the people and businesses based here. It can be assumed that Bavaria and the southern German region will continue to develop positively as an incoming destination after the crisis due to their economic strength and year-round attractiveness.

As a gateway for this region, Munich Airport plays a key role. The goal is to achieve lasting stability in its position as one of the leading hubs in the European aviation market, which is experiencing further consolidation. Long-haul and transfer traffic will therefore be an essential cornerstone of the aviation strategy in the medium to long term, too. Further destinations in point-to-point traffic from Munich are to increase the variety and attractiveness of the service. One crucial aspect here will be keeping infrastructure and process quality at a high level and thereby strengthening the company’s position as it competes with other airports. The development of the cargo and logistics business is also designed to accommodate the growing importance of global supply chains.

Long-haul traffic (photo)
Long-haul traffic is a cornerstone of the Aviation strategy.

Commercial Activities business unit

The effects of the pandemic continued to have a major impact on Flughafen München GmbH’s commercial business in 2021. In the retail, restaurant, parking, and advertising segments, the low traffic figures have led to significantly lower demand and, as a result, to some vacancies due to business closures or terminations. Discussions were held with all partners to secure contractual relationships and develop future opportunities for the period after Covid-19. Despite the extremely difficult situation of many tenants, business relations remain based on partnership and a relationship of trust that has grown over time.

Target
End of 2022: Stronger integration of sustainability criteria in the selection of future tenants

A particular focus of the business area in 2021 was on solidifying the existing brand partnerships with various automotive groups and with major customers from the telecommunications sector.

FMG aims to operate an attractive and sustainable location.

Parking transactions and sales remained at a comparatively low level in the past fiscal year. In addition, the structure of the customer base for parking has changed. Fewer conventions and major events as well as the lower volume of business travel led to a decline in the previously high volume of business parking. On the other hand, new products and promotions, such as e-charging services, were established for vacation travelers.

The goal of the Commercial Activities business unit is to secure and expand FMG’s value proposition in the face of changing consumer behavior. The focus will continue to be on optimizing space efficiency and the portfolio of offerings as well as increasing customers’ willingness to make purchases. Changing retail structures and consumer habits also call for new marketing and acquisition concepts. Another objective of this business unit is to offer customers at Munich Airport a special experience. Staging in the terminal areas, the presentation of strong brands, and extraordinary events in the Forum of the München Airport Center (MAC) visibly contribute to the airport’s attractiveness.

166,713 t Air freight (+14.9%)

Real Estate business unit

The airport’s development as a real estate location is highly important to Munich Airport. The Real Estate business unit secures the airport infrastructure and positions the real estate business on the third-party market. It supports the infrastructure for business development in the areas of Aviation and Commercial Activities in a demand-oriented and holistic manner.

Using real estate as a means of securing the core business of aviation

FMG aims to operate an attractive and sustainable location. The airport is actively using the pause in growth brought on by the pandemic to modernize the existing infrastructure, some of which dates back to when the airport was first commissioned, and meet passenger and visitor expectations in terms of amenities. In order to continue to grow as a major airport, Munich Airport – in line with its aviation strategy – is making investments in modern aviation infrastructure, such as the construction of the new pier at Terminal 1.

Making optimal use of capacity in space already used for commercial purposes

This strategic objective focuses primarily on the central zone. Pandemic-related effects are constantly evaluated and taken into account accordingly.

Generating substantial contributions to profits by developing real estate

In real estate development, FMG focuses on generating new sources of revenue outside the traditional portfolio. This is particularly evident in various major projects, such as the sale of airport-owned land for the realization of a concert arena by third parties, the conception and construction of the LabCampus as a smart city, and cooperative ventures with companies researching future-oriented technologies there.

Taking account of regional interests

The marketing of airport real estate focuses on target groups and companies that prefer proximity to the airport and an international environment when choosing a possible location. The real estate strategy is carefully calibrated to accommodate the interests and concerns of the airport area in terms of both the development of Munich Airport as a whole and the many construction projects that are planned. FMG maintains an intensive dialog with the region.

International business

Flughafen München GmbH markets its expertise worldwide. In this way, it promotes value-driven growth beyond Munich, taps into new business models, and continuously expands its own expertise. With the involvement of the Group’s subsidiary Munich Airport International GmbH (MAI), the company has evolved from a consultant for airport relocations and start-ups into an airport manager with international operations. MAI is a valued partner for investors and airports around the world, not least because of the five-star quality at its home base.

Together with its subsidiaries, MAI successfully completed its existing projects and acquired new customers in 2021. For example, operations were taken over at Sofia Airport in Bulgaria, the new cargo terminal was opened at the Saudi Arabian capital’s Riyadh Airport, and the new Palmerola International Airport in Honduras was successfully put into operation.

Plans for 2022 include not only expanding the consulting and management segment, but also strengthening MAI’s global presence with a new sales location in Asia.

Target
End of 2022: Evaluation and development of a regional office in the Asia Pacific region

31 active international projects

Projects, 2021

FMG IR21 activities in international business

In addition, MAI 2021 experts were active in the Netherlands, Hungary, the USA, West Africa, Turkmenistan, Albania, India, and Germany.

Structural work for the new pier (photo)
The structural work for the new pier is mostly complete.

Planning and expanding in line with requirements

Prompted by the global aviation crisis, all construction projects at the airport were reviewed, with lower-priority activities being postponed. The strategically most important projects, such as the expansion of Terminal 1, the completion of the first LabCampus building, or the improved transport links to the airport, will be continued – always with a focus on quality and the changing needs of customers. Negative effects on the environment and the airport area will be kept to a minimum, for example by applying compensating and noise protection measures. The goal is to minimize the adverse impact of contaminants or resource and energy consumption on the environment by adopting sustainable building concepts, and then afterwards through sustainable operation of the buildings.

In view of the dramatic effects of the Corona pandemic, FMG and Lufthansa formulated a joint declaration of intent in the fall of 2020 that explicitly affirms the long-term continued development of Munich Airport as a hub for intercontinental aviation. At the end of 2021, for example, the airline announced plans to base four more state-of-the-art Airbus A350 long-haul aircraft at Munich Airport. With a total of 26 long-haul aircraft based there, Lufthansa can offer even more intercontinental flights at its Bavarian hub, further consolidating Munich’s excellent global connections.

Target
End of 2026: Implementation of life cycle cost analyses for new buildings

LabCampus becoming a reality

To the northwest of the airport, the LabCampus is a cross-industry innovation center with workspaces, showrooms, project and conference areas for networked research and development work. International innovators will particularly benefit from the proximity of the airport at this location, which is designed as a smart city. In the summer of 2022, the first office building, «LAB 48», was opened. With an area of approximately 30,000 square meters, the building offers a variety of possible uses throughout four floors.

Read more
labcampus.de/en

Construction work on the new Airport Academy, which is also being built on the LabCampus site, is on schedule. From the beginning of 2023, work and networking will be possible on 14,000 square meters in high-quality equipped seminar rooms and stylish rest areas, as well as with a spacious dining area. As the first LabCampus customer, Argo AI, a U.S. tech company specializing in autonomous driving, will move into a large test and workshop area in the southwest part of the airport, in addition to office and showroom space. This contract highlights the potential of the LabCampus as a think tank and test lab for forward-looking mobility concepts at Munich Airport.

Upgrade for Terminal 1

The expansion and modernization of Terminal 1 through the construction of a new pier is one of the strategic expansion projects that will secure the future and competitiveness of Munich Airport. In the meantime, the shell of the pier has been largely completed and work on the facade is underway. Interior work is scheduled to begin in spring 2023. In view of the ongoing Corona crisis and the associated consequences for both air traffic and the construction industry, it is not yet clear when the new terminal area with the additional passenger capacity will be put into operation.

Third runway remains an option for the future

Although the development of air traffic in the coming years is still likely to be dominated by the effects of the Corona pandemic, experts believe that long-term mobility requirements and thus global air traffic will continue to grow in the future. Munich Airport’s task is to ensure the availability of capacity for air traffic in line with demand. In this respect, FMG believes that the construction of a third runway remains an important long-term option for the future viability of the airport.

Ongoing progress in connecting the airport

FMG is hard at work improving its road and rail connections. After three years of construction, the shell of the rail tunnel extension required for the Erding ring closure (Erdinger Ringschluss) was completed on schedule in September 2021. This marks another milestone for the train connection from Freising via the airport to Erding. The tunnel shell can now be equipped with the necessary technical equipment by DB Netz AG.

The study commissioned jointly with the Bavarian State Ministry of Housing, Construction and Transportation on connecting the airport to interregional rail passenger services was completed in spring 2022. Improved rail links to Munich Airport are to be achieved via a four-stage concept that takes account of local, regional, and long-distance traffic. A FMG and Deutsche Lufthansa AG working group is also addressing the overarching issue of intermodality at Munich Airport.

Construction of the Freising western bypass in the immediate vicinity of the airport has been completed since January 2022. In addition, traffic has been flowing on the new three-lane expansion of the eastern airport bypass between the ED 7 and B 388 junctions since August 2021.

Looking ahead The projects with the greatest strategic importance on the airport campus are being continued.
  • Parking garages

    The new P44 parking garage with around 2,000 spaces opened in August 2021 to the north of the LabCampus site. A further parking garage with around 1,800 spaces is also being planned there.

  • LabCampus

    The hub of innovation is taking shape: The first office building LAB 48 is expected to open mid 2022, and the new Airport Academy is scheduled to open in the first quarter of 2023.

  • T1 extension

    The shell of the new, 360-meter-long pier is mostly complete and work on the facade is underway. Interior work is scheduled to begin in spring 2023.

  • Rail links

    The rail tunnel under the airport was completed in September and subsequently handed over to DB Netz AG. This section of railway is due to open at the end of 2025.

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Schengen/non-Schengen
Departures and arrivals areas for passengers from member states that have signed up to the Schengen Agreement; these passengers have either arrived directly from one of these states or want to travel to one. No border or passport controls are needed. Non-Schengen refers to areas for passengers who have arrived from countries that are not party to the Schengen Agreement. Passports and customs checks are required in this case.

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