Vienna Airport. “We think the negative decision regarding Project 3 runway is incorrect and discriminating." Vienna Airport CFO Günther Ofner put it straight in this interview with ImmoFokus: “The supreme administrative court will decide on the issue”.
How do you personally see in the big picture for the Vienna International Airport?
Günther OFNER: The Vienna International Airport is one of the most important business locations in Austria with more than 20.000 employees and around 250 businesses operating there. It is important that the company and the location continue growing because we expect passenger numbers to go up in coming years. It is crucial for the real estate development that the location is desirable. Just last year 12 new companies opened up at VIE with 600 new staff members. The real estate development is one of the big pillars alongside aviation, retail, gastronomy and parking – a motivation to further develop the business and office spaces at VIE.
VIE is an important office location: Who are your biggest competitors in this field?
We are facing worldwide competition amongst real estate locations - or at least in Europe. Our main competitor airports are Munich and Zürich. In real estate development - and I am convinced of this - we are competing with all of Europe.
In Germany more people have spoken of a growing bubble?
This general assessment is not very relevant for us. In our case it is more about relative positioning: There are a number of reasons why the appeal of the Vienna International Airport as a business location is increasing. On the one hand we have an intermodal transport connection. The Vienna International Airport is connected to road, rail, ship and air traffic. There is a sufficiently qualified workforce in the region. The IT connection is perfect too, we have high-end IT and internet connections.
Of course we also benefit from the fact that Vienna has grown towards the south. In the west the Vienna Woods have created a natural boarder halting further city growth. In the north Vienna now reaches beyond the city limits. Then there is the connection between Vienna and Bratislava. This will benefit the airport directly. The condition for this is that the train going to Bratislava will be efficiently expanded, like the train coming from the west to the airport. Naturally the planned Lobau crossing is also of considerable importance to us because then the ring motorway around Vienna will be closed.
The business location Bratislava can gain from this development. There already is a lot of charter traffic going through Bratislava.
Of course this will also benefit Bratislava. The expectations that started ten years ago have not been realised because the cost pressure on the airlines has been so large that they had to concentrate their businesses - smaller airports like Bratislava have been negatively affected by that.
So airports have to branch out and generate income in the non-aviation areas to turn a profit?
It is the fate of all airports that revenues in their core business are under massive pressure. Therefore, they must make up for them with other activities: services, shops, gastronomy, real estate, parking and advertising. But the two fields cannot be kept apart: The passengers are also necessary for the non-aviation business profits. The non-aviation areas can be divided into 3 parts: real estate, gastronomy and shopping/parking. The revenue generated in this area is about 190 Million Euros - less than one third of the entire revenue but two-thirds of the net income.
How are you coping with your big three shareholders, considering the clash of one private and two public investors?
What many people do not realise is that the majority of our funds come from private investors; we are one of the few airports that can say that. The public funds that come from the city of Vienna and from the state of Lower Austria make up 40%. In my five years as chairman there have been no attempts to politically influence our decisions. The two governors of Vienna and Lower Austria always supported us when we needed it, but never interfered.
The House of Commons of the UK recently voted (with a large majority) for the Brexit to begin. Jamie Oliver has fled from the Brexit and is going to open his first restaurant in Austria at the Vienna Airport. In all honesty: Can the office business at the VIE profit from the Brexit - is there a possibility that companies will move from Heathrow to Vienna?
Not only from Heathrow - they will be leaving all parts of England. The great advantage of having a location in the United Kingdom that is connected to the European market and especially the EU will cease to exist. This equates to new opportunities for us and especially for companies that have cast an eye not only on the EU, but on Eastern and South-eastern Europe. One must not forget that East and Southeast Europe will probably grow at least double as fast as the EU in the next 20 to 30 years. For this reason businesses will operate a separate locations for the EU and for Eastern and Southeastern Europe. Vienna is ideal for this. The airport has the location advantage regarding logistics and air traffic. This is not a requirement, but anybody working in traffic logistics or in the air transport industry will have further incentive to come to the airport.
Does the Vienna International Airport have enough space to keep growing?
We have room to grow. But we must allocate our space correctly. We still have development areas and they should be sufficient for the next two decades. Of course we will eventually need more space, but this must happen in coordination with the neighbouring municipalities.
Those who don’t make an effort fall short. We aspire to be one of the best. With our concept for development of the Vienna Airport Region we want to ensure strong economical growth in the area. It is important that everyone who is connected and involved with the region is part of the development process. It is also important that we pool forces.
I think it will bring momentum to the region, not just in an economical sense but also regarding environmental activities, quality of life and social aspects (including schools, kindergartens and sports facilities). It should become an intercommunal platform built on effective collaboration.
In Vienna four new office spaces are entering the market. What makes you confident about starting the new project “Office Park 4”?
There is a favourable location and a synergy for the many businesses that come to a fully functional city, which has the necessary infrastructure and services that they need to operate their core business. In the last five years we have seen a rise in interest from companies even if their core business is not directly connected to air travel. Companies that have settled at VIE because of the conveniently situated location or for other reasons say: “This location is perfect for us”.
The new Office Park 4 is a further step to make the Airport City and the entire Airport Region more attractive. This is aimed not only at local companies but also at international businesses. Because we are located in the heart of Europe this especially encompasses Brexit refugees from the UK.
Developing the real estate location at the airport into a multifunctional Airport City is a significant part of our strategy. Our commercial space is over 140.000 m², we have office park facilities (including Office Park 4) of around 100.000 m² of office and conference spaces, local supply and other services such a supermarkets, a pharmacy, a gym, a 24-hour postal service and much more. All of that including an ideal traffic connection makes the Vienna Airport a great location for new businesses.
The Vienna International Airport is the first industrial area in Austria that received a DGNB certificate for sustainability from the ÖGNI. How does this impact the VIE from a competitive standpoint?
It goes beyond just financial advantages: This is about quality of life. More and more companies that rent from us value this especially. But it is also important for us to reduce the energy usage and keep environmental pollution to a minimum with all of our activities. Saving energy, minimal usage of natural resources and good waste management are particularly important for the airport and a key factor in our business strategy. In the last three years we managed to reduce our energy usage by 15 percent and our CO2 emissions by 20 percent.
The topic of life-cycle costs is of great significance to us - also organisationally. We control everything from the first idea of opening a piece of real estate up until the closing of it. Facility management and inventory management - we pull everything together.
Ten years ago the on 1 March 2007 the VIE applied to the government of Lower Austria to build a parallel runway. On 9 February 2017 a negative decision was sent back regarding Project 3 runway from the federal court. The reason given for the rejection of the request was too high CO2 emissions.
We think this decision is incorrect and discriminating. It is unprecedented to pick out this one project and make it responsible for Austria’s climate protection obligations. We will be appealing this decision and the supreme administrative court (VwGH) will decide on the issue.
The inevitable time has come and now the current infrastructure is reaching its limits. Whether this happens three years sooner or later depends on the technical framework. New airplanes are more manoeuvrable; navigation systems are getting better and more precise. But none of that helps us: When we grow bigger - and that is our plan - we will reach a point when we need additional capacity.
How did the negative decision of the court affect the real estate location at the Vienna Airport?
In the interest of the business location we will appeal the decision. Not only 20.000 to 30.000 jobs will be affected by the outcome of the final decision over the next ten years, but also the tourism branch in the conference location in Vienna will be harmed if airplanes have to fly over Vienna and land somewhere else. The airport is aimed at expanding and would be severely restricted and disrupted by such a decision. Nevertheless the real estate location at the Vienna International Airport will remain attractive for businesses.
Followng the problems surrounding the new construction of Skylink the entire construction management was reorganised. How will this affect Project Office Park 4?
It is important to understand that a company like ours that is constantly implementing new projects has to remain a strong construction leader. We need to have the necessary qualifications ourselves to construct and manage large projects effectively. This can include a terminal extension (up to 500 million) or an Office Park worth 50 to 60 million - and everything in between. That is why we are prepared to invest a planned 1,6 billion effectively and cost efficiently in the next ten years.
The Vienna International Airport is not listed as an office location by the Vienna Research Forums (VRF). Does this offend you?
No. But of course the VIE is an office location in Vienna. We do have a Viennese postal code after all (laughs). I expect they will add us in their next market report.
Günther Ofner
Born in 1956, he received his doctor of laws degree from the University of Vienna in 1983, where he also worked as a lecturer from 1986 to 2000. He served as the Managing Director of Friedrich Funder Institut für Journalistenausbildung und Medienforschung from 1981 to 1992, and then joined Österreichische Elektrizitätswirtschafts AG as the deputy head of the foreign office from 1992 to 1994. From 1994 to 2004, he was a member of the Management Board of Burgenländische Elektrizitätswirtschafts AG. He served on the Management Board of Burgenland Holding AG from 1995 to 1997 and 2005 to 2011, and on this company’s Supervisory Board from 2004 to 2005. His other functions include Chairman of the Management Board of UTA Telekom AG from 2004 to 2005, as well as Managing Director and Head of M&A at various Austrian and foreign subsidiaries of EVN AG from 2005 to 2011. He was appointed to the Management Board of Flughafen Wien AG on 5 September 2011. By resolution of the Supervisory Board of 23 June 2015, Dr Ofner was appointed as a member of the Management Board of Flughafen Wien AG for another five-year period until 4 September 2021.
WORDRAP with Günther Ofner
What are your strengths and weaknesses?
One of my strengths is my four decades of experience. One of my weaknesses is that a lot of things move too slowly for me. I can get impatient and put pressure on the people that work for me. But that can also be beneficial.
What gets you flustered or throws you off guard?
Nothing, really.
Do you consider yourself ambitious?
Yes, I am ambitious to a healthy extent.
What radio station do you listen to when driving your car?
Ö3 or Ö1.
Have you found your personal dream property?
No, never. But I am ideally situated.
Which living or dead person would you like to go to dinner with?
German Chancellor Angela Merkel for example. I would ask her how one can cause this nonsense with the energy transition. That would be interesting.
Your biggest achievement, your biggest defeat?
Other people can be the judge of that.
What book is lying on your bedside table?
Progress: Ten Reasons to Look Forward to the Future by Johan Norberg. Everybody should read that one.
Which revolutionaries do you admire?
I don’t admire revolutionaries. Revolution is normally connected to chaos. I prefer the “evolutionaries”, there are many of them I admire. People who develop things without causing chaos, like the people who established the order of peace in Europe after 1945 and the European Union.
Do you personally invest in real estate?
No.
Johan Norberg
PROGRESS Ten Reasons to Look Forward to the Future
ISBN: 9781780749501 256 pages# oneworld | 2016 £16.99 / US$24.99
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It's all over our televisions, newspapers and the internet. Every day we're bludgeoned by news of how bad everything is - Brexit, financial collapse, unemployment, poverty, environmental disasters, disease, hunger, war. Indeed, our world now seems to be on the brink of collapse, and yet:
- We've made more progress over the last 100 years than in the first 100,000
- 285,000 more people have gained access to safe water every day for the last 25 years
- In the last 50 years world poverty has fallen more than it did in the preceding 500
Contrary to what most of us believe, our progress over the past few decades has been unprecedented. By almost any index you care to identify, things are markedly better now than they have ever been for almost everyone alive.
Examining official data from the United Nations, the World Bank and the World Health Organization, Johan Norberg traces just how far we have come in tackling the issues facing our species. While it's true that not every problem has been solved, we do now have a good idea of the solutions and we know what it will take to see this progress continue. Counter-intuitive, dramatic and uplifting, Progress is a call for renewed hope in defiance of the doom-mongering of politicians and the media.
ABOUT Airport City Vienna
Wolfgang Scheibenpflug, MIRCS Head of Property Management, Vienna Airport
The Airport City Vienna is the perfect location for businesses that are looking for a city infrastructure, which is connected to to an wide-ranging and developing transport hub. We offer 90,000 sq m of modern office spaces and conference rooms equipped with the latest technology as well as 40,000 sq m of logistics areas. We provide the following services directly at the airport: a 24-hour post office, a drugstore, banks, car registration office, filling stations - including electric charging, a kindergarten, a fitness centre, numerous restaurants and supermarket and much more. We offer a complete package of services relating to the business requirements as well as the personal needs of your customers and employees.
More details about the Airport City Vienna: www.airport-city.at and info@airport-city.at