Lublin: new president on the airport situation: “We are building a business offer”

Mateusz Kieruzal, Rynek Lotniczy: You have been involved with Lublin Airport for over a decade, and you have recently become the president of the airport. Does Świdnik have a bright future?

Krzysztof Matuszczyk, President of Lublin Airport: I’m sorry, but I’m not a fortune teller. On a serious note, we are one of several regional airports in our country. In 2023, Lublin Airport served 398,785 passengers. This year, we aim to improve this number and surpass the 400,000 mark. We are on the right track. In July, we set a record with 56,353 passengers, the best result in the airport’s history. Statistics show that the record-breaking achievements are mainly due to this year’s exceptionally rich summer flight schedule.

This year’s offer is also very diverse. From Lublin Airport, you can fly to Turkey, Tunisia, Greece, Egypt, Croatia, Bulgaria, Italy, and also to Gdańsk on the Polish coast. We are not stopping there; we plan to further develop this sector. In 2024, we anticipate a 60% increase in our offer compared to last year. This is a significant success, especially considering that in 2019, charter traffic at our airport was practically non-existent.

The airport’s financial situation is very challenging. The net loss for the previous year was a record 35.2 million PLN, and the accumulated loss for the past four years exceeds 104 million PLN. What do you plan to do to repay the debts and avoid requiring additional public funds from shareholders?

It is important to understand what this amount comprises. Primarily, these are liabilities incurred years ago to build the airport. To put it simply, it is the repayment of the construction loan. High interest rates contribute to significant financial costs related to servicing the bonds issued to finance the airport’s construction. In 2023 alone, nearly 24 million PLN was allocated for this purpose. Additionally, there are costs associated with mandatory wage increases. However, it is worth noting that we have managed to keep other significant operational costs below the average annual inflation rate. This was achieved while increasing revenue from sales and, as mentioned, enjoying a record-breaking summer season in terms of both destinations and passenger numbers.

It should also be noted that by diversifying revenues, the airport has started providing cargo services. Last year, the company began constructing a modern warehouse and transshipment facility to handle cargo, with a capacity of up to 10,000 tons of various types of goods. The facility will be operational by this autumn. Another very important factor is the construction of a permanent helicopter base for the Land Forces in Świdnik. However, it is too early to discuss the details.

Would Lublin Airport have ceased to exist without the generosity of the local government?

This cannot be stated in such absolute terms, as such a thesis would apply to many other regional airports in Poland. It is also worth noting that among the 14 international passenger airports operating in Poland, only a few are financially profitable. Urban transport is subsidized, and roads and railways are maintained. Without communication routes, including air routes, proper regional development is not possible. Lublin Airport was created primarily to eliminate communication barriers and to become a crucial driver of development for the Lublin region, which it is succeeding in doing. The full economic zone in Lublin and the expanding economic activity zone in Świdnik, in close proximity to the airport, are strong evidence of this. The airport, of course, incurs costs. As I mentioned, these mainly involve servicing the bonds that were knowingly issued by the owners to ensure the airport’s establishment. Shareholders who support the functioning of the regional airport are aware of this.

As you mentioned, “the airport costs,” but there are certain “buts.”

It is important to remember that Lublin Airport is a regional airport in a relatively less wealthy province. It cannot compete with major airports in Krakow, Gdansk, or Katowice, but over the years, it has established its presence and demonstrated its necessity in the region. As the number of passengers increases, the commercial offer is expanding, which, along with increasing the attractiveness of the airport itself, impacts revenue from non-aeronautical activities. Our region has many attractions to offer tourists. Promoting these attractions well, especially abroad, is crucial so that hotels, restaurants, museums, and other cultural centers benefit.

You are a former military officer. Would the Lublin airport, with all due respect, serve better if it were exclusively dedicated to military purposes?

As a former military officer, let me answer directly. Passengers often tell me that they cannot imagine how Lublin and the entire region could function without the airport. This is proof that we have fulfilled what we promised the residents of the Lublin region when building the airport. It was meant to be a window to the world, and it has become just that—for passengers and for business.

How do you plan to improve the airport’s connectivity?

We are developing our vacation offer with our partners, the largest travel agencies. I already know that the summer of 2025 will bring several new connections to attractive destinations in Southern Europe and a significant increase in the offer, by several tens of percent. We are continually negotiating with airlines about restoring or starting new routes.

Lubusz Voivodeship is known for its “generosity” in subsidizing flights through fictitious regional promotions. Would you like the local provincial government to subsidize flights, including vacation ones, from Lublin?

Please note that Lublin Airport is one of the few in the country that directly incurs the costs of marketing services related to promoting the airport and its connections. In 2023, these costs amounted to nearly eight million PLN. In other airports, this burden falls on local governments. Many regions, including abroad, handle it this way. In our case, as I mentioned earlier, we are managing well on our own, including vacation flights.

What is the biggest issue for the airport?

Certainly, the burden of servicing the bonds. It impacts our financial condition, but it is worth noting that for 2023, the company recorded a 13.6% increase in revenue from sales compared to the previous year. We are working to maintain this trend this year.

In the 2022 financial report, the previous management indicated that a low-cost carrier would establish a base by 2025. Is this dream coming true?

It is difficult to predict the outcome of negotiations at this time, but we are indeed conducting intensive negotiations with several carriers to expand the number of permanent routes offered from our airport. Statistics show that many passengers from Lublin travel from other airports in Poland, and we consistently demonstrate this potential to airlines. Our discussions include routes expected by our passengers, such as Scandinavia, a broader range of destinations to the UK, the German market, especially from a business perspective, and warmer regions of Europe for city breaks. We strive to conclude these negotiations successfully, but remember that the final decision rests with the carriers, who base their decisions primarily on their business interests, considering not only ticket prices but also additional services, baggage fees, and in-flight sales, which contribute to their revenue and profit. Additionally, there is the issue of fleet strategy, with many carriers facing challenges related to new aircraft deliveries and the need to recruit new crews.

Is the improvement in the situation of Airbus and Boeing key to Lublin’s development?

The anticipated increase in connections and the choice of destinations we want to offer from our airport indicate that, ultimately, establishing an operational base here would be beneficial. Both the region’s potential and the demand for new routes from our airport clearly support this. Once regular deliveries of new aircraft ordered by carriers begin, the situation should improve. This is what airline representatives are promising us today, and we are preparing for it.

What about Lufthansa flights to Frankfurt?

Network carriers like Lufthansa focus on corporate and transfer traffic, especially for long-haul routes. It is a fact that the number of German-capital companies in the Lublin region has increased over the years, which is encouraging and provides a strong basis for discussions about the need for air connections to Frankfurt, Munich, or Nuremberg. We build our business offers for carriers based on this. In collaboration with local governments, we demonstrate the region’s economic growth and prospects for the coming years.

On the other hand, Lublin historically does not have as strong ties with Polish communities in the USA or Canada as regions like Małopolska or Podkarpacie. A significant portion of passengers on Lufthansa routes from these regions are transfer passengers to Chicago, New York, or Toronto. In our case, it is not on such a scale. However, we see significant passenger traffic from the Lublin region to major financial and industrial cities in Europe, which is a good forecast that we also highlight in our discussions with airlines.

Warsaw is relatively close. How do PLL LOT flights between Okęcie and Świdnik perform?

The connection has been operating for several years and works quite well. It is not just about flights to the capital, but to an important transfer hub. When we cannot convince a carrier to offer direct flights, we aim to provide our passengers with the option to reach other airports in the country, Europe, and the world via Warsaw. This approach works and may also be a development direction. Currently, 95%

Source of the interview: Rynek Lotniczy – the original interview is available in Polish.