The Airport Leaders Symposium
Briefing and discussion by airport leaders on the fundamental issues of the moment, with a focus on how to build financial and operational resilience into an airport company.
Moderator Catherine Mayer, Vice President, SITA
Technology has enabled the passengers to take control
Dr Yiannis Paraschis, CEO, Athens International Airport & Chairman, ACI World, stated that the crisis has had an impact in all aspects and airport business with passenger revenues going down. What the airport requires is a resilient and flexible model. In the old world, airports would go to difficult times with a negative net margin and would get pressure from the other sectors in the value chain but also within. Airports this time need to find a new model.
Arnaud Feist, CEO, The Brussels Airport Company in his speech stated that Brussels Airlines is a booming airline receding a 20% increase in last years and the airport has been working closely with the airline. However, the airline faces taxes that its LCC competitors don't have as they are not based in Belgium. He added that Brussels market is robust and sustainable and for them the first priority is what the customer wants.
Jost Lammers, CEO, Budapest Airport, stated that with Malev bankruptcy the airport lost 20% of transfer passengers and the routes to NY and China were discontinued due to the lack of feed traffic. In addition they lost the 50% of our revenues. Adding to that the lack of support by the government that was not prepared to face the problem and the imposition at the same time of an additional indirect tax. The airport offers to the passenger a new security way and retails and to offer a full product to the customer. In the last years the airport didn't make money due to investment in infrastructure. What the airport needs now is to be closer to airlines and have a joint new approach.
State of the industry
Olivier Jankovec, Director General, ACI Europe stated that for the period January-April this year the passengers increased by 3% but freight decreased by 4.1% and the movements by 1.7%. The ACI Europe forecast for the full year projects that passenger traffic will have an increase of 2% and freight a decrease of 2%. Regional airports have been badly impacted by the crisis with 48% of european airports being loss making. At the same time there is a declining support on infrastructure, social acceptability has become an important issue, there is a global shift in Asia, Latin America and Africa with the new silk air road. Growth is no longer a given for all and the focus now is on performance with a reduction of airline charges by 7% and a 353 million € benefit for the airlines, on reduction of staff costs by 10%, of contracted services by 20% and of investment by 19%. The capital cost at the same time increased by 23% representing the 31% of total costs with a risk to disconnect with the future. Finally, security costs arise at 5 billion €. He concluded by saying that is time for system partnerships.
Welcome addresses
Declan Collier, CEO, London City Airport and President, ACI EUROPE, stressed that the continuing crisis in Europe is affecting the air industry and the airports. He continued by saying that just as the European and global economy needs structural changes the same way the air industry is in need of aviation policy reset. It is not anymore business as usual for the airports and it cannot be business as usual for policy makers as well. Many policies driven by political considerations, such as the New liquid security restrictions coming in force next year oblige the airports to buy new machines and have to be reconsidered. Similarly, the limitation of public finance for airport infrastructure threatens the survival of many airports which depend on state aid to keep communities connected to the world. In addition, such restrictions puts airports at a competitive disadvantage as airports in other parts of the globe, rail networks do get public money. He urged for growth-enabling initiatives such the Single European Sky and Open Skies agreements, to put an end to national aviation taxes and to deal with airport capacity issues in Europe.
José Manuel Vargas, President, Aena Aeropuertos S.A. in his speech as host of this Annual Assembly said that the current environment has made it difficult to access capital markets and that airports need to react to the current situation. He added that is time now to maintain the facilities and investment will be made only on security and the environment where legislation requires it. AENA aeronautical charges are 40-50% lower compared to other airports in Europe. The focus now is on the restructure of the commercial activities, in order to cover the aeronautical costs, with the refurnishing of the duty free areas of more than 25,000 sq meters that will be completed in 2014.
First Working Session
Harry Bush, Former Group Director Economic Regulation, UK Civil Aviation Authority presented the exclusive findings from a major new research study into airport competition.
He stressed that customer has now the choice. At the same time there are more choices for airlines, as point-to-point airlines switch bases, and consolidation creates airlines with multiple hubs. Airports respond to this new situation by greater proactive marketing, incentives, service improvement. The key will to be agreeing on the points where regulation requires to be redesigned.
To the question “How is the airport/airline relationship evolving and what it will mean for industry stakeholders, and ultimately the passenger?” Matthew Baldwin, Director, Air Aviation & International Transport Policy, DG MOVE, European Commission, answered that what happens to one affects the other but the focus of the EC is the passenger.
Fernando Val, COO, Vueling Airlines, agreed that the passenger is in the centre. Airports need to understand airlines’ needs. More efficient airports mean more revenues. He concluded that the important is innovation and imagination.
Manuel López Aguilar, Executive SVP Commercial and Customers, Iberia, said that airport efficiency is a driver for airline profitability. The major factors affecting airlines; Relationship with airports is the airport design, the passenger connectivity, facilities and services, economic and environmental issues and the handling operations.
Giulio De Metrio, Chief Operating Officer & Deputy CEO, SEA Milano, stressed that airports have to adapt their infrastructure and services to meet airline evolving needs such as long haul flights, short haul and alliances.
The Airport Investors Forum
Craig Richmond, Regional Executive, United Kingdom Vantage Airport Group and CEO, Peel Airports Limited, presented the case of Vancouver Airport where there is a joint venture between the airport operator and infrastructure investor, citibank. They are actively looking for new airports that have a strong underlying market, asset quality and ability to add value.
Nicolás Villén, Chief Executive Officer, Ferrovial Aeropuertos, said that over the last year 110 million passengers traveled via Ferrovial airports. The company focused on reducing the waiting time in security and now 95% of passengers wait less than 5 minutes.
Gunnar Moller, Commercial Director and Special Advisor to the Chairman of HNA Airport Group, stated that with the experience that HNA has gained from airports in China they now want to invest in airports outside China.
Michael McGhee, Partner, Global Infrastructure Partners, said that GIP airport focus is on passenger and on collaborative management adding that due to the current crisis it is difficult to assess the risk as it is a currency issue.
(Source:Air Tranport News)
Briefing and discussion by airport leaders on the fundamental issues of the moment, with a focus on how to build financial and operational resilience into an airport company.
Moderator Catherine Mayer, Vice President, SITA
Technology has enabled the passengers to take control
Dr Yiannis Paraschis, CEO, Athens International Airport & Chairman, ACI World, stated that the crisis has had an impact in all aspects and airport business with passenger revenues going down. What the airport requires is a resilient and flexible model. In the old world, airports would go to difficult times with a negative net margin and would get pressure from the other sectors in the value chain but also within. Airports this time need to find a new model.
Arnaud Feist, CEO, The Brussels Airport Company in his speech stated that Brussels Airlines is a booming airline receding a 20% increase in last years and the airport has been working closely with the airline. However, the airline faces taxes that its LCC competitors don't have as they are not based in Belgium. He added that Brussels market is robust and sustainable and for them the first priority is what the customer wants.
Jost Lammers, CEO, Budapest Airport, stated that with Malev bankruptcy the airport lost 20% of transfer passengers and the routes to NY and China were discontinued due to the lack of feed traffic. In addition they lost the 50% of our revenues. Adding to that the lack of support by the government that was not prepared to face the problem and the imposition at the same time of an additional indirect tax. The airport offers to the passenger a new security way and retails and to offer a full product to the customer. In the last years the airport didn't make money due to investment in infrastructure. What the airport needs now is to be closer to airlines and have a joint new approach.
State of the industry
Olivier Jankovec, Director General, ACI Europe stated that for the period January-April this year the passengers increased by 3% but freight decreased by 4.1% and the movements by 1.7%. The ACI Europe forecast for the full year projects that passenger traffic will have an increase of 2% and freight a decrease of 2%. Regional airports have been badly impacted by the crisis with 48% of european airports being loss making. At the same time there is a declining support on infrastructure, social acceptability has become an important issue, there is a global shift in Asia, Latin America and Africa with the new silk air road. Growth is no longer a given for all and the focus now is on performance with a reduction of airline charges by 7% and a 353 million € benefit for the airlines, on reduction of staff costs by 10%, of contracted services by 20% and of investment by 19%. The capital cost at the same time increased by 23% representing the 31% of total costs with a risk to disconnect with the future. Finally, security costs arise at 5 billion €. He concluded by saying that is time for system partnerships.
Welcome addresses
Declan Collier, CEO, London City Airport and President, ACI EUROPE, stressed that the continuing crisis in Europe is affecting the air industry and the airports. He continued by saying that just as the European and global economy needs structural changes the same way the air industry is in need of aviation policy reset. It is not anymore business as usual for the airports and it cannot be business as usual for policy makers as well. Many policies driven by political considerations, such as the New liquid security restrictions coming in force next year oblige the airports to buy new machines and have to be reconsidered. Similarly, the limitation of public finance for airport infrastructure threatens the survival of many airports which depend on state aid to keep communities connected to the world. In addition, such restrictions puts airports at a competitive disadvantage as airports in other parts of the globe, rail networks do get public money. He urged for growth-enabling initiatives such the Single European Sky and Open Skies agreements, to put an end to national aviation taxes and to deal with airport capacity issues in Europe.
José Manuel Vargas, President, Aena Aeropuertos S.A. in his speech as host of this Annual Assembly said that the current environment has made it difficult to access capital markets and that airports need to react to the current situation. He added that is time now to maintain the facilities and investment will be made only on security and the environment where legislation requires it. AENA aeronautical charges are 40-50% lower compared to other airports in Europe. The focus now is on the restructure of the commercial activities, in order to cover the aeronautical costs, with the refurnishing of the duty free areas of more than 25,000 sq meters that will be completed in 2014.
First Working Session
Harry Bush, Former Group Director Economic Regulation, UK Civil Aviation Authority presented the exclusive findings from a major new research study into airport competition.
He stressed that customer has now the choice. At the same time there are more choices for airlines, as point-to-point airlines switch bases, and consolidation creates airlines with multiple hubs. Airports respond to this new situation by greater proactive marketing, incentives, service improvement. The key will to be agreeing on the points where regulation requires to be redesigned.
To the question “How is the airport/airline relationship evolving and what it will mean for industry stakeholders, and ultimately the passenger?” Matthew Baldwin, Director, Air Aviation & International Transport Policy, DG MOVE, European Commission, answered that what happens to one affects the other but the focus of the EC is the passenger.
Fernando Val, COO, Vueling Airlines, agreed that the passenger is in the centre. Airports need to understand airlines’ needs. More efficient airports mean more revenues. He concluded that the important is innovation and imagination.
Manuel López Aguilar, Executive SVP Commercial and Customers, Iberia, said that airport efficiency is a driver for airline profitability. The major factors affecting airlines; Relationship with airports is the airport design, the passenger connectivity, facilities and services, economic and environmental issues and the handling operations.
Giulio De Metrio, Chief Operating Officer & Deputy CEO, SEA Milano, stressed that airports have to adapt their infrastructure and services to meet airline evolving needs such as long haul flights, short haul and alliances.
The Airport Investors Forum
Craig Richmond, Regional Executive, United Kingdom Vantage Airport Group and CEO, Peel Airports Limited, presented the case of Vancouver Airport where there is a joint venture between the airport operator and infrastructure investor, citibank. They are actively looking for new airports that have a strong underlying market, asset quality and ability to add value.
Nicolás Villén, Chief Executive Officer, Ferrovial Aeropuertos, said that over the last year 110 million passengers traveled via Ferrovial airports. The company focused on reducing the waiting time in security and now 95% of passengers wait less than 5 minutes.
Gunnar Moller, Commercial Director and Special Advisor to the Chairman of HNA Airport Group, stated that with the experience that HNA has gained from airports in China they now want to invest in airports outside China.
Michael McGhee, Partner, Global Infrastructure Partners, said that GIP airport focus is on passenger and on collaborative management adding that due to the current crisis it is difficult to assess the risk as it is a currency issue.
(Source:Air Tranport News)
