Poland has a population of nearly 38 million and is growing rapidly, with both GDP and GDP per capita rising by over 50% in the previous decade. The increasingly wealthy population drove air traffic growth rates to an exceptional CAGR of over 10% in the same period.

This was across both the capital’s hub, Warsaw Chopin Airport (WAW), and airports in the rest of the country. WAW, however, is reaching its maximum capacity, hitting almost 19 million passengers before the pandemic against a design capacity of 20 million.

The previous government developed the plan for a new multi-modal transportation hub between Warsaw and Lodz. The new airport CPK is planned to be operational by 2028 and have an initial capacity of 40 million annual passengers. In October last year it was announced that a consortium of Vinci and IFM are the key strategic partners to develop the airport.

However, after the national elections in October, a new party is now in charge and during its campaign it expressed strong opposition to the airport.

WAW’s current airport´s design and location do not allow for much expansion and the lack of available cargo capacity is already forcing Polish importers/exporters to use foreign gateways. This could limit the country´s aviation, and subsequently, economic development.

Are there alternatives to channel the growth potential?

Poland's Aviation Opportunity

While total traffic in the country reached nearly 50 million pre-pandemic, the country is still under-performing in terms of trips per capita. The country is significantly behind Eastern European peers such as Hungary which has a similar GDP/capita, and is level pegging with Romania despite it having a much lower GDP/capita than Poland (see chart below).

This can be partially explained by domestic traffic only comprising 8% of the Polish market. Despite the country´s large size, the capital is centrally located and generally reachable in under four hours by car from other major cities. However, there is still a big market gap.

Ryanair and Wizz Air have recognized this as well and both aim to grow strongly in the Eastern Europe region as a whole. The three main carriers in the country, Ryanair, LOT and Wizz Air have stimulated growth over the past decade.

LOT has outpaced the low-cost airlines and nearly reached the traffic levels of Ryanair in 2019. However, Ryanair upgraded its capacity in the country post-pandemic to reach an all-time traffic high in 2022, whereas LOT was still nearly 30% below its 2019 peak (see chart below).

Future Outlook & Development Options

At present there is no reason why Poland’s aviation growth trend of the previous decade should not continue.

On the supply side, LOT’s strategy for 2024-2028 is to increase its fleet by 50% to 110 aircraft and carry nearly 17 million passengers, a rise of over 40% compared to 2019. Similarly, Ryanair and Wizz Air expect the main growth of their capacity in the next decade to come from Eastern Europe due to increasingly penalizing policies in the West that are making flight tickets more expensive.

On the demand side, the Polish economy is not expected to slow down and the propensity to fly is expected to catch up with the rest of Europe and triple over the next 20 years according to Airbus’s latest global market forecast. Additionally, Poland´s tourism sector is expected to benefit from climate change and a shift of summer tourism further north.

With these factors in mind, the future development of airport capacity in the country can take various forms. On the one hand, local airports are expected to better cater to inbound tourism demand. Low-cost airlines can provide the additional capacity from these airports as well with direct connections across Europe. This also includes Warsaw´s secondary airport Modlin, mainly used by Ryanair, which can expand further.

However, the lack of a large hub in the east of Europe also connecting directly to intercontinental destinations, and the lack of cargo capacity in the capital will not be catered for if the new CPK airport is not built.