UNCLAS FRANKFURT 004611

SIPDIS

DEPARTMENT FOR EB/TRA BYERLY, PARSON, FINSTON, WALKLET
DEPARTMENT FOR EUR/AGS AND EUR/ERA
FAA FOR API-1, AEE-1, AIA-300 AND ASC
PARIS ALSO FOR FAA
THE HAGUE PLEASE PASS AMSTERDAM


SENSITIVE

E.O. 12958: N/A
TAGS: EAIR ECON PGOV SENV GM
SUBJECT: Frankfurt Airport Expansion Delayed At Least Two
Years

REF: A) 2003 FRANKFURT 01549; B) 2003 STATE 29193 C) 2002

FRANKFURT 5496; D) 2003 FRANKFURT 09273

Sensitive but unclassified; Not for internet distribution.


1. (U) SUMMARY: Frankfurt Airport's expansion now faces at
least a two-year delay, meaning a fourth runway will not
open until at least 2009. The Hesse government announced
the delay on May 25, blaming the airport authority (Fraport)
and refusing to set a new target date. The political
opposition called the setback a major defeat for Minister
President Roland Koch (CDU), who has closely associated
himself with the airport expansion plans. Airlines warn
that further delays could undermine Frankfurt's position
relative to other European airports and mean job losses.
END SUMMARY.


2. (U) Hesse Economics Minister Alois Rhiel (CDU - Christian
Democrat) announced May 25 that the construction of a fourth
runway at Frankfurt airport will be delayed "at least two
years" past 2007. Rhiel refused to set a new timeline until
the airport resolves safety concerns associated with the
Ticona chemical plant located near the planned runway (refs
C,D). He blamed airport management for the delay, saying
that Fraport could have submitted regulatory requests two
years earlier and that Fraport's submissions understated
problems with the chemical plant and wildlife preservation
areas. NOTE: The state government -- which until now had
defended Fraport and the 2007 target date -- now echoes
criticism by the regional zoning authority which last
November called Fraport's studies "sloppy" and inadequate.
END NOTE.


3. (U) Fraport managers claim they can live with the delay
by optimizing slot usage at existing runways. Airline reps
generally agreed, but warned that they might move flights to
Paris, Amsterdam or London if expansion is further delayed.
Lufthansa, Fraport's main customer, said its plans would not
be affected since most of Lufthansa's growth in the past
five years has occurred at Munich (the airline's second
hub). Lufthansa Cargo pointed out a bright side to the
delay: "Every year without a night-flight ban is good for
us." (NOTE: Frankfurt Airport will eliminate night-flights
once the fourth runway comes into operation. END NOTE).
Business associations used the occasion to criticize onerous
German bureaucracy and to warn that Frankfurt could lose its
attractiveness for many businesses.


4. (U) The political opposition held Minister-President
Roland Koch (CDU) personally responsible. SPD (Social
Democrat) caucus chief Juergen Walter blamed Koch for
Fraport's sloppy and flawed approach -- including its
neglect of safety issues -- pointing out that Koch served as
chairman of Fraport's supervisory board when it formally
applied for expansion. The Greens, who oppose the
expansion, declared the project dead. Christian Jochum,
head of the German Safety Commission, remarked that the
airport should not seek approval from the European
Commission (which expressed concerns about Ticona last year)
until safety issues are further addressed (refs C, D).


5. (SBU) COMMENT: The expansion of Frankfurt is not only the
largest infrastructure project in Germany, but also one of
Koch's main projects as Minister President. An early
advocate of the controversial north-west runway (next to the
Ticona plant), Koch could suffer politically if the
expansion project falls further behind. Hesse's inability
to set a new and credible timetable is a bad signal to
airlines, who could look elsewhere to expand operations.
Fraport's mishandling of expansion and its disastrous
involvement in the Manila airport project (where it lost
almost 500 million Euros - REF A) mean that Koch will have
to throw his full weight behind the project to secure
Frankfurt's role as a leading hub in Europe. END COMMENT.

BODDE