2016 ANNUAL REPORT 5 6 ROYAL SCHIPHOL GROUP 2016 ANNUAL REPORT Message from the CEO
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Royal Schiphol Group Annual Report 2016 Value creation Connecting the Netherlands Royal Schiphol Group’s mission is Connecting the Netherlands: We facilitate optimal links with the rest of the world in order to contribute to prosperity and well-being both in the Netherlands and elsewhere; connecting to compete and connecting to complete. G H Network and a special interest Knowledge organisations institutions Alliances o & M Participations Employees Outcome s Sustainable & Safe Performance R Real Estate B Business 1 partners Value What Who How why Ambition D Development Q of the Group Output F T Financial stakeholders Top Connectivity c Consumer Products & r Services Travellers U m C Business- Competitive model E Mission Marketplace q Government Excellent bodies Visit A Value 2 Airlines Aviation S O Sector Local residents I partners Input SCHIPHOL ANNUAL REPORT 2016 1 Value creation Why What Who Mission It is Royal Schiphol Group’s Schiphol has many stakeholders who m Connecting the Netherlands: socio-economic task to represent a wide range of interests: We facilitate optimal links with strengthen and develop the rest of the world in order to Mainport Schiphol and the Travellers contribute to prosperity and regional airports. To do this, r well-being in the Netherlands Royal Schiphol Group must be and elsewhere. successful across the board. Airlines Our strategy is embodied in A Ambition fi ve themes: 1 It is Royal Schiphol Group’s Local residents ambition to develop Schiphol Top Connectivity O • Regional Alders Platforms into Europe’s Preferred Airport T The best connections • Schiphol Local Community Council for travellers, airlines and Connect • Local Community Contact Centre logistics service providers. • Network of destinations Schiphol and fl ight frequencies • Airport infrastructure Sector partners • Accessibility by road and rail S • Airlines How • Air Traffi c Control the Netherlands Excellent Visit Value (LVNL) In order to achieve our E An attractive airport • Handling agents mission effectively and Compete • Dutch Customs effi ciently, we have clustered • Cost-effi cient operations • Royal Netherlands Marechaussee our core activities around • Streamlined and distinctive four business areas: passenger experience Government bodies Aviation, Consumer Products • Competitive price/quality ratio q • Neighbouring municipalities & Services, Real Estate, and • Provinces Alliances & Participations. Competitive Marketplace • Ministries This business model guides C A prime location the implementation of Attractive Financial stakeholders our joint strategy and • Location F • Shareholders determines the success • Attractive business climate • Banks of Royal Schiphol Group. • Logistics capacity • Bond investors Aviation Development of the Group Business partners 2 Infrastructure and facilities D A strong Group B • Concessionaires for airlines, passengers, handling Strengthen • Lessees agents and logistics service • International development • Security companies providers at Schiphol, safety and • Organisational development • Facility services providers security at Schiphol. • Synergy within the Group • Construction and installation companies Consumer Products & Services Sustainable & Safe Performance c Products and services for s Sustainability and safety Employees travellers and businesses Future-proof M at Schiphol. • People • Planet • Profi t • Financial solidity Network and special interest Real Estate • Safe environment for staff, G organisations R Operational and commercial passengers and visitors real estate at Schiphol and Knowledge institutions other airports. H Alliances & Participations a Participating interests in airports in the Netherlands and abroad, other domestic and international activities. 2 SCHIPHOL ANNUAL REPORT 2016 Value creation Value I Q o Capital Input Output Ou Outcometcome Produced • Airport infrastructure • High-grade facilities • Buildings and infrastructure • Car parks • Competitive airport • Roads charges 3 • Attractive real estate Prosperity Social and • Infrastructure and • Accessibility of relationships network destinations • Stakeholder dialogue • Relationships with • Collaborations sector partners, business partners, suppliers and employees 4 • Local support base Human • Employees • Skilled and trained • Schiphol workers employees • Connections • Diversity • Economic value • Safe working • Safety conditions • Living and working climate 5 • Support base • Reputation Intellectual • Knowledge • Brands and concepts • Committed and • Expertise • Innovation motivated workforce 6 • Ecological value Nature • Energy • Emissions • Raw materials • Noise • Drinking water • Use of materials and • Land holdings residual waste fl ows • Waste water • Water Well-being • Space requirements 7 • Biodiversity Financial • Financial position • Return • Creditworthiness • Credit rating • Taxes 8 • Dividend SCHIPHOL ANNUAL REPORT 2016 3 Contents Message from the CEO 7 Facts and figures Key events in 2016 10 About us 11 page 12 Facts and figures 12 Our organisation 14 Our position in the value chain Our activities 16 Our position in the value chain 22 page 22 Our strategy 24 Strategic themes Trends and developments 25 Our strategy: Mainport development 34 page 34 Our results 40 2016 Management Agenda 41 Network of destinations Our results 42 Partner views and recommendations 82 page 43 Financial performance 84 Partner views and recommendations Governance 88 Report of the Supervisory Board 89 Supervisory Board 98 page 82 Management Board 100 Corporate Governance 101 Remuneration 106 Risk management 110 Annual Statements Socio-economic accountability 120 Financial Statements 135 ROYAL SCHIPHOL GROUP 2016 ANNUAL REPORT 5 6 ROYAL SCHIPHOL GROUP 2016 ANNUAL REPORT Message from the CEO Schiphol’s 100th anniversary: His Majesty King Willem-Alexander visits Amsterdam Airport Schiphol The year 2016 was, for various reasons, an exciting, intense and turbulent year for Royal Schiphol Group. It was also a year in which we pulled out all the stops to celebrate the airport's 100th anniversary. Highlights included meetings with our partners and neighbours, receiving the 'Royal' designation and His Majesty the King's visit on our birthday, 19 September. The European Aviation Summit convened at Schiphol this year, bringing European aviation leaders together to discuss current issues facing the industry. It was also a year of unexpectedly strong growth in passenger volumes, which presented some major challenges. Pressure on capacity and quality as of 1 April 2016 our airport charges went down by an average of In its centenary year, Amsterdam Airport Schiphol welcomed a 11.6%. record 63.6 million passengers, representing a 9.2% increase compared to 2015. This growth was most noticeable in Departure Big investments ahead Hall 1 (passengers to destinations within the Schengen area), where Schiphol's new pier and terminal are set to significantly expand passenger numbers rose by 17%. The unexpectedly strong growth airport capacity. In 2016 we received the green light for may in part be due to airlines requesting additional slots in order to construction, and preparatory work is now under way. The new pier ensure they have sufficient capacity for future growth now that the will be finished in late 2019, and the new terminal in 2023. capacity limit of 500,000 air transport movements is approaching. Cheaper plane tickets also contributed to higher demand, leading To guarantee sufficient capacity and quality in the interim, Schiphol to increased passenger flows throughout the year. This has led to is building a temporary departure hall on top of Baggage Hall South. significant pressure both on the capacity and the quality of our This decision was taken in September 2016 and the temporary hall airport. Added to this were the heightened terrorism alert, structural will be commissioned in April 2017. under-staffing at the Royal Netherlands Marechaussee and a number of operational disruptions. Working in cooperation with the Amsterdam Metropolitan Area and the Ministry of Infrastructure and the Environment, investments are Swift and adequate response also being made to improve access to Schiphol through the Thanks to the flexibility and ingenuity of many, we were able to act modification and expansion of roads, the railway station, bus swiftly and effectively to ensure a safe and successful 2016. We are station, Schiphol Plaza and Jan Dellaertplein. These plans are still in immensely grateful to our own employees and those of our partners the decision-making phase. for their commitment. Looking ahead, that commitment will remain vital to keep pace with the forecast continued growth of the aviation Lelystad setback industry. Over the coming years, major investments to create Under the selectivity policy we are working to create additional additional space at Schiphol will be needed to keep capacity and capacity not only at Amsterdam Airport Schiphol but also at Lelystad quality up to par. Our motto is: Perform today. Create tomorrow. Airport. The Alders Agreement provides for Lelystad to take over a This means that we are working today to build the Schiphol of sizeable number of flights from Schiphol, mostly non-Mainport- tomorrow, while at the same time offering a good product at a related holiday flights to destinations around the Mediterranean. All competitive rate during the construction period. As a case in point, of the contracts for construction of the new terminal and runway were signed in June 2016, work got off to a flying start and the