Introduction: Vienna Airport’s €420 million southern terminal expansion will deliver a strong Austrian Sense of Place and 10,000sq m of high-quality retail and food & beverage space when it opens in 2027. Our Senior Business Editor Mark Lane sat down with Vienna Airport Senior Vice President Centre Management Philipp Ahrens to discuss its potential and how the expansion will transform the currently saturated commercial offer at the airport.
“There’s a lot of money out there, there’s a lot of eagerness to travel. It’s giving us a really positive outlook for the future not only this year, but also the years to come. The problem is we have a great flow of people in our commercial areas but we cannot capitalise fully on the willingness of the passengers to spend, because the offer is limited. This is why we need the Terminal 3 extension.”
The words of Vienna Airport Senior Vice President Centre Management Philipp Ahrens, when reflecting on current commercial challenges as he spoke to The Moodie Davitt Report about the project set to propel the Viennese travel hub into the very top rank of world airports.
Construction work has begun on the €420 million Southern Terminal (T3) expansion at Vienna Airport, a project that will be financed with no loans, just future projected cashflows. Modern shopping and restaurant offerings will be created in a 70,000sq m area featuring Austrian and international premium brands, spacious leisure areas and exclusive lounges.
Building on the design input of Portland Design, the airport will expand its overall shopping and restaurant space by +50% to more than 30,000sq m, with more than 30 new retail and F&B concessions across a 10,000sq m footprint. Alongside an Austrian Airlines Lounge covering 4,000sq m will be a Vienna Airport lounge set across 2,000sq m.
Some 18 gates and a state-of-the-art security checkpoint will also be added.
Although it is just over three years from the planned opening of the terminal extension, Ahrens says the finish line for the commercial aspects is “not that long down the road. It takes time to produce the offers [from tenants] and making sure everyone gets their ideal space on the floor plan.”
He adds: “That process will accelerate this year and in 2025, then the construction of the commercial elements will be done in 2026, building up to the summer 2027 opening. It’s a timeline that will pass quickly.”
The extension space will serve only departing passengers, with the flow planned to maximise exposure to the new commercial area, Ahrens notes. “The south extension is a purely focused on departures. The really exciting part of it from a commercial perspective is that you have the Schengen and non-Schengen passengers alike in one building.
“They will not be separated until they have left the commercial area, and that in combination with gate announcements being left as late as operationally possible will certainly elevate our revenues to a new level.”
Eventually, up to 11 million passengers will pass annually through the space. “We won’t hit that number straight away,” predicts Ahrens. “But we will reach it quite quickly I think, within a year or two. We want the terminal building to reach that level as quickly as possible to generate the best commercial revenues we can.”
Ahrens says the airport hopes to elevate Sense of Place, which will be subtly incorporated across the building through the display of Austrian art and other touches, with a large high-quality restaurant with an Austrian focus and in the centre of the marketplace, a large Viennese coffee house.
“For these two potential opportunities, there are obviously some famous [food & beverage] brands in Austria, and it would make a lot of sense for some of them to set up there,” comments Ahrens. “But we need to see what the process will be like and whether we can agree terms to get those well-known Austrian brands here. I’m pretty sure we will because the interest is already very high.”
At this stage in the commercial development process, Ahrens reveals that no formal tender process has yet been considered for the potential retail and F&B partners. “We have been having direct talks with interested parties, so we’re not doing an official tender process in that sense. We want to get the message out there that anyone with an interest in participating in the process is more than welcome to get in touch with us to have discussions.”
He adds: “Of course, we have also had plenty of interest from the travel retail market – the big players and the mono brands you see in major airports. We started those discussions as well. But in any case, we are open to any offers and any ideas to help make our passengers feel like guests, which is the feel we want to create.”
Ahrens notes that tenant acquisition efforts are being supported by a virtual 3D tour, which he first introduced in a presentation at The Trinity Forum in Hong Kong last year. He says: “It’s proving to be a great tool for interested parties to explore the extension’s interior areas and possible commercial space, take a closer look at passenger flows and leisure areas, and get a realistic impression of the entire terminal environment. It’s been very helpful in the discussions so far.”
When asked about the trend for master concessions we are currently seeing across the airport world, with a single operator delivering both retail and food & beverage elements, Ahrens states that is not the direction Vienna Airport wants to go in.
“We really want to have competition on the floor [of the commercial area],” he explains. “Our experience has shown that working with different partners increases the quality. And it also gives us a bit of creativity and flexibility because each partner has its strengths and different areas in which they excel.
“I think the strength of operators in the travel retail market really gives a huge portfolio for us to choose from and that’s a great position to be in for this kind of project and the passenger numbers behind it. We have a very strong argument for multiple operators – that’s what makes it so interesting from a commercial perspective.”
While the extension is a major focus for the Vienna Airport commercial team, Ahrens notes that commercial revenues from existing retail, food & beverage and lounge operations at the airport are performing strongly.
“We are coming off the back of a record year for commercial revenues in 2023 and the second highest passenger volume in the airport’s history [29.5 million] in 2023 [the record was set in 2019 with 31.6 million passengers]. I’m pleased to say that momentum continues. We have a lot of people travelling and still spending quite a lot of money.
“We estimate that this trend will continue and we’ll have an even stronger year this year. Our airline partners are sharing high booking levels for the rest of 2024. F&B is booming and retail has also done very well in the first quarter, with duty free a strong performer.
“But the fact is we don’t have the differentiated and strong retail and to a lesser extent F&B portfolio we really want because of the current space limitations. We are very excited about changing that through the terminal extension.”
He concludes: “I personally believe it’s going to be a really thrilling terminal building with an incredible guest experience. This is what we want to give to our guests, this is what we want to show them when it opens for business. We need strong input from partners and operators to facilitate that mission.”
*This article first appeared in The Moodie Davitt Magazine. Click here for access and turn to page 102. ✈
