Its not because it is a terminal that will be used by low-cost carriers that it should be unpleasant or disagreeable for the passengers, Marketing Director Philippe Wilmart tells AE&T. Mp2 will have a hip look with flashy colors while applying the same philosophy of the LCCs, namely exclude some of the frills which are standard in a traditional terminal like carpets and moving walkways while outsourcing as much as possible of the handling process to the passengers.

The mp2 terminal will have a maximum of self-check counters and there will be no conveyor belt behind the counters. Unlike at most European airports, luggage will be weighed and tagged and then handed back to the passenger who will have to carry it to the x-ray machines. There will be no jetties. Budget carriers prefer that the passengers walk directly to the plane, so boarding can be speeded up by using two moving stairs at the same time, Wilmart says. Passengers will not have to cross any service roads. The airport targets a 20-min. turnaround at mp2; in order to achieve this, aircraft will be allowed to maneuver into takeoff position after landing. This eliminates the need for a pushback and represents savings for the airline of about E50 per movement, he says.

Marseille-Provence is the first airport in France to create a tailor-made LCC terminal. Plans call for it to open in June 2006. Initial capacity will be 3.5 million passengers annually and there will be parking stands for six A320s/737s.

The idea to create a dedicated LCC terminal follows several years of steady traffic loss at the airport. It reached its historical record in 2000 with a passenger throughput of 6.5 million, owing mainly to development of traffic by the Qualiflyer member airlines and the launch of routes by buzz, the first LCC to operate there. In 2001 the fortunes turned with the June launch of a direct TGV High-Speed Train link from Paris, reducing travel time between the cities to 3 hr.

Before the arrival of the HST, air lift had a market share of 60% on the Paris-Marseille route and train 40%. The percentages inversed to 40% for air lift and 60% for train almost immediately, Wilmart notes. With tickets at E25 [one way] and no taxes, how can an airline compete. The arrival of the HST in combination with the lack of sufficient slots to compete with Air France also led easyJet to abandon the route. Paris Orly represented a passenger throughput of 2.4 million for MRS in 2000; in 2004 this was down to 1.4 million.

After 9/11, virtually all Qualiflyer carriers operating at Marseille-Provence collapsed, while Khalifa Airways also closed down. In February 2003 Air Lib stopped flying and in April buzz was taken over by Ryanair. Wilmart says, Ryanair came to us and said they were very keen on tripling the passenger numbers at the airport but at an all-inclusive charge of E10 per passenger. We said no. We thought it would be discriminatory to our other carriers. That year, MRS handled only 5.4 million passengers, 1.1 million fewer than three years earlier.

The following year was recovery time, with the opening of 10 new routes by seven airlines boosting traffic to some 5.8 million passengers. With a 7.3% increase year-on-year, MRS was the highest achiever of the major French regional airports and became the fourth-largest in France after Paris Charles De Gaulle, Orly and Nice. Three factors contributed to the growth: Air France, which had created its Mediterranean hub at MRS in April 1999; outgoing charter traffic, and LCCs. Low-fare passengers reached 445,000 in 2004, up 57% on 2003 and good for 10% of total traffic.

The budget segment will take a dip this year to about 300,000 passengers following the decisions of Helvetic to quit its Zurich route, Thomsonfly to stop its summer service from Coventry and easyJet to abandon the Paris route. EasyJet was the airports third-largest carrier last year.

Like so many French airports, were too expensive for LCCs, Wilmart admits. The basics of an LCC are very simply [that] airport charges may represent a maximum 20% of the unit revenue. The unit revenue of Ryanair being around E39 and E56 for easyJet, this means our all-in cost to them should not exceed E8 and E12 respectively. Yet we have a E6.34 compulsory [by the French state] airport security tax and a compulsory E4.48 French civil aviation tax. The passenger service charge is E6.05 for intra-European traffic and E2.79 for domestic traffic, while landing fees amount to E1.70 per passenger and handling is about E4 per passenger. We are evidently out of the equation. Management decided not to sit still but to venture with a dedicated minimalist low-cost terminal. The budget airlines have formulated a new kind of expectation on the landside and airside operations, Wilmart says. We decided it was time to steer away from the traditional airport approach offering one and the same product to all customers. MRS had an empty cargo building that easily could be revamped into a passenger terminal and local authorities were open to the project because it would stimulate tourism and economic growth in the region. They were willing to invest E7.5 million in the terminal.

There was also a downside, namely DGAC, the rather conservative French civil aviation authority, which had to give its blessings. Against all expectations, it was open-minded about endorsing mp2 but put three requirements down: It had to be nondiscriminatory to all users, the financing and cost structure had to be transparent, and the business plan had to prove there was no cross-subsidizing from the main terminal to the low-cost terminal. These requirements were in line with the February 2004 Ryanair/ Charleroi Brussels South Airport ruling of the European Commission.

Thirteen carriers requested information following the tender launched in May 2004 and three made a bideasyJet, Ryanair and Air France. AF initially was unhappy with the project because it, like IATA, is against segmentation of airport services and pricing in principle. At the same time it realized that the project was in conformance with EC regulations and that a lower cost base would benefit it in its competition with the HST. They decided against it because they still have a lot of high-yield passengers, says Wilmart. We are currently working with them to introduce segmentation in the other direction, geared to the high-end passengers.

DGAC gave its consent in April after MRS agreed to raise the planned passenger service charge for mp2 from E1 to E1.30 per passenger, an 88% discount on the PSC in the present terminal. They argued a E1 PSC could affect profitability in case of a downturn, says Wilmart. DGAC also put two new conditions down: The project may not exceed its budget of E16.4 million, of which E1.2 million will be invested in security provisions and E15.2 million in infrastructure, and mp2 may be launched only after the signing of a contract with one or several budget carriers committing to 1.8 annual million passengers by the third year of operation. At press time, MRS confirmed it was in the final stage of negotiations with one low-fare operator for a passenger throughput of more than 1 million. According to information obtained by AE&T, easyJet intends to set up a base at the airport with up to six aircraft in the longer term.

The LCC terminal will be basic, with a concrete floor. Surface area will be limited to allow optimized handling; the same staff will be able to do the check-in and the boarding because distances will be small, Wilmart explains. Handling is liberalized at the airport according to EC directives. To eliminate the cost and space constraints of customs, mp2 will be open only for intra-European traffic. Charter carriers will be allowed to operate from the new terminal but have shown no interest in committing traffic. Furthermore, charter traffic represents only 7% of the MRS total and is mostly extra-EU. International routes bring 41% of passenger traffic and domestic 59%. Air France is the largest carrier with 2.62 million passengers and Orly the busiest destination with 1.48 million.

Parallel to the creation of mp2, Marseille-Provence developed an incentive scheme to support new European and domestic routes, including a 90% discount on landing and parking fees during the first year and 50% the second year. In addition, a carrier can benefit from marketing support amounting to E2.50 per departing passenger on European routes during the first year, E2 the second year and E1.50 the third year. The civil aviation tax and security tax are beyond our control. But with the reduced cost base at mp2 and the marketing support, we will be more in line with the cost base an LCC expects from an airport, Wilmart concludes.