Expansion needs at Oslo Airport

As Norway’s primary airport, Oslo Airport (OSL) has a unique position in Norwegian aviation. During its first 10 years of operation, the airport has seen very positive growth. A number of major and minor measures have helped to meet various passenger needs during this time. Oslo Airport will eventually need considerable expansion to meet future passenger needs.

With its single terminal, Oslo Airport is one of the most efficient airports in Europe. The airport is owned by Avinor AS, a fully-owned state limited company. Avinor AS owns and operates a total of 46 airports in Norway. Oslo Lufthavn AS accounts for around 50% of Avinor’s total production, and the revenues from OSL are vital for the operation of Norway’s regional airports.

In the period 2003-2008, Oslo Airport saw considerable growth in passenger traffic. In 2003, 13.6 million passengers flew via OSL, and in 2008 the corresponding figure was 19.3 million. This is a growth of 42%. In this period, the capacity of the terminal was enlarged from the original 17 million passengers, to 22 million. This includes an expansion of the terminal towards the east. Plans are now being drawn up for further expansion.

In addition to pure traffic revenue, commercial revenue is also crucial for the airport. In 2008, commercial revenue amounted to 57% of total revenue for OSL. Some of the reason for this is Norway’s status as a European country outside the EU. This permits duty free sales to all European and overseas destinations. In recent years, the need to increase capacity for passengers, as well as being able to develop the commercial potential, has become more and more pressing.

Traffic growth

In 2002, the low-fare carrier Norwegian entered the market, creating a whole new competitive situation. While only operating domestic flights at first, the airline established its first international routes the following year with great success. The combination of new destinations, efficient ticket distribution via the internet and low fares, resulted in robust traffic growth at OSL, and in the years 2004-2007 traffic grew by around 10% annually. The low-fare carriers accounted for almost all the passenger growth of 5.4 million passengers in this period. Sterling was also a major player until its bankruptcy in October 2008.

The phenomenal growth until August 2008 came to an abrupt halt with the financial crisis. In 2009, passenger volume appears to be headed towards around 18 million. This is a decline of 6-7%. International traffic has been particularly hard hit, down approximately 10% for the first half of 2009. The reduction in passenger volumes is easing month by month, with demand for travel expected to grow again. In addition to the financial crisis, there was a change in the competitive situation in the Oslo region in 2009, whereby Rygge was established as a privately-owned airport.

Commercial development

Oslo Airport was planned with very little commercial space. The basic principle for the layout of the terminal was getting passengers quickly from check-in to gate. Little regard was taken during the design of the terminal for the optimal operation of shops and restaurants. From a logistics standpoint, the terminal was constructed with a single receiving dock under the central hall. From there, all goods and all waste need to be transported up and down to the same area, partly through areas reserved for the public. This is awkward from the point of view of logistics and service.

As passenger traffic exploded, it became clear that the check-in facilities were limited, the commercial spaces too small and the facilities for proper goods logistics were deficient. In addition, developments have shown that the airport needs more space for commercial activities with considerable potential for expansion. Currently, the space for duty free sales is 2,800 square metres. OSL is one of three airports in Europe to offer duty free upon arrival. This accounts for 800 square metres of the floor space for duty free.

With the terminal’s eastward expansion, Oslo Airport has taken an important step towards improving fundamental terminal functions. Expanded floor space and added capacity for check-in, and expanded areas for international arrivals, have resulted in more efficient solutions for an enhanced passenger experience. In this way the expansion has meant a better situation for commercial activity.

The planned Terminal 2 project will facilitate feeder routes at basement level, from the main receiving dock out to the shops. Goods will be transported to an area directly under the shops, and then on lifts up to zones with little or no access by the public. This sort of solution will make deliveries more efficient and optimise commercial operations.

Extension of the terminal

On account of the substantial growth in traffic at OSL, the need for greater space is becoming increasingly acute. To meet these needs as quickly as possible, development in phases was decided upon.

Phase one was the extension of the existing terminal towards the east. This has resulted in an enlargement of space of 4,000 square metres. On 26 May this year we were able to open the new space, thus enlarging capacity from 17 million to 22 million passengers a year.

The extension has given us 14 new check-in counters in the departure hall, so that we now have a total of 74 check-in counters. Baggage capacity at departure has increased from 3,000 bags an hour to 4,000. In the arrival hall we have enlarged the baggage receiving area with a double baggage carousel, yielding a capacity increase of 1,400 an hour to a total of around 5,500 bags an hour.

The terminal building at Oslo Airport is known as one of the leading examples of contemporary Norwegian architecture. In 2008, the terminal was awarded the A.C. Houens Fond Certificate as the building most characteristic of Norwegian architecture of the 1990s. This award is the highest distinction for architecture in Norway. For that reason it has been a challenge to continue this distinctive architecture in the new addition. The result has been a success, and it is difficult to see the transition from old to new.

With a capacity of 22 million passengers, the current terminal will, according to new forecasts, be able to meet needs until 2015. Even though we have seen a decline in traffic each month for the past year, there is every reason to assume that the growth will return. Experience from previous downturns also shows this, underlining the importance of planning for the long term.

Terminal 2

To meet the need for space in 2015, when forecasts indicate that the capacity for 22 million passengers will be insufficient, planning began in 2007 on a new terminal. Work is now being done on a revised sketch project, before the preliminary study begins later in the autumn. The preliminary study is to be ready during the first half of 2010. It is the board of Avinor that will make any decision to build.

The new terminal will be a fully-integrated part of the existing terminal. It is planned to be built in two phases, adapted to current long-term traffic forecasts. The first phase will yield a total capacity of 28 million passengers. When phase two is completed, capacity will be 35 million.

In addition to the terminal, which is to meet the need for greater passenger and commercial space, a new pier is planned perpendicular to the current terminal. With 11 new gates, this will have a length of 285 metres and is to meet the need for parking positions. The pier will ensure better passenger flow and make new commercial space available. In this way, the proposal maintains one of the main advantages of the current terminal, which is a short distance from check-in to gate.