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European Airports: Developments, Challenges & Opportunities - 3 December 2012

by Olivier Jankovec, Director General, ACI EUROPE
by

Robert O M

on 25 February 2013

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Transcript of European Airports: Developments, Challenges & Opportunities - 3 December 2012

THANK YOU DEVELOP NEW REVENUE STREAMS Commercial Revenues
now account
for 47% of total
airport revenues Olivier Jankovec, Director General Civil Aviation in Ireland Conference WWW.ACI-EUROPE.ORG GROW INTERNATIONALLY
& ALLIANCES EUROPEAN AIRPORTS: Developments, Challenges
& Opportunities Capacity BEYOND
AIRPORTS CHALLENGES

Capital costs:

Regulatory driven costs External Costs Changing Airlines +23% CONTRIBUTION € € SOCIETY AVIATION SECTOR User pays principle, but not full costs 5 STRATEGIC
DIRECTIONS YESTERDAY the way we were TODAY airports are businesses KEY DRIVERS OF
THE BUSINESS EVOLUTION Airport
Competition Public Financing
Squeeze Shareholders'
Evolving Expectations BUSINESSES
- IN OUR OWN RIGHT Diversification
Serving ALL customers
Corporatisation (privatisation)
Self-financing & Fiscal discipline
No airline cross-subsidisation at the expense of airport shareholders Mere infrastructure providers
Focused on national carriers
Dependent on public financing BOOST
COMPETITIVE
POSITION 1. 2. REDUCE
DEPENDANCE FROM DOMINANT AIRLINE DEVELOP
NEW REVENUES
& COST DISCIPLINE 3. 4. PROVIDE
CAPACITY
& QUALITY 5. GROW
INTERNATIONALLY
& ALLIANCES Competitive Airport Charges

Airlines related charges = 16% of
airport revenues

2010 decrease: -7% / -€353 million

€4 billion cost UNDER-recovery Boost Operational Efficiency

A-CDM & A-CDO
Airports = Ground Coordinators
& Total Airport Management Diversify facilities & services & pricing





Active network development

Brand equity = key for effective airline competition Regional Airports Capex 2012-2016:

Redefine the airport experience
Technology & Social Media Commercial revenues
= of airport revenues Expanding beyond the Terminal... ...Airport City = key to economic sustainability Frankfurt Airport

Paris-CDG

Moscow Domededevo

Athens Airport

Birmingham

Charleroi 1st employment site in Germany

90,000 direct jobs, 270,000 indirect jobs

29,000 direct jobs

2.14% Greek GDP

130 companies established

+3% of city's workforce/ -60% unemployment €43.3 billion = Users not paying full infrastructure cost = Lower airline operating costs Dublin, 3 December 2012 New Airline
Business Models Aviation
Liberalisation 48% Growth 2.0 Jan-Sept
2012 v 2011 Passengers: +2.1%
Freight: -2.4%
Movements: -1.5% LCC Dominance Network Carrier
Restructuring
& Consolidation (+€1.7bn!) INDUSTRY & POLICY
IMPLICATIONS NO AVIATION TAX!
REDUCE regulatory driven costs INCENTIVISE investment
adequate economic regulation
& public financing PROVIDE new business opportunities: Open Skies beyond Europe GIVE us our licence
to operate & grow UNLEASH
the
POWER
of
AVIATION AIRPORT
COMPETITION © Copenhagen Economics Buying Power
Evidence Route Churn: 2,941 route openings
v 1,936 route closures 84% of airports
have a dominant airline customer
(+40% capacity)

68% of airports
= less than 50% of local market share

European hubs
= less than 40% transfer market share
15 cases of de-hubbing since 2000 63% of European citizens live within
a 2 hours drive of at least 2 airports © Copenhagen Economics Decreasing
Profitability 48% of Europe's airports
= loss making Route closure impact = only 47% of recovered capacity within 3 years. More
Buying Power
Evidence "We are going to be very, very tough
with routes that aren't working out" Carolyn McCall, CEO ARRIVALS DEPARTURES PASSENGERS FREIGHT MOVEMENTS Jan-Sept
2012 v 2008 EU: +1.1%
New Europe: +36.1% Global Shift Competitive challenge
how to maintain GLOBAL RELEVANCE..? Airport capacity crunch
Risk: DISCONNECT between investment & demand INDUSTRY: Airports' 3 fold focus

1. Performance
2. Quality
3. Social responsibility GOVERNMENTS
& REGULATORS: through proper industrial policy! POLICY REQUIRED THINK GLOBAL THE REAL WORLDWIDE WEB © Copenhagen Economics
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