Annual & Sustainability Report 2017
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Athens International Airport Eleftherios Venizelos Annual & Sustainability Annual & Sustainability Report Annual & Sustainability Report 2017 2017 Athens International Airport Eleftherios Venizelos Annual & Sustainability Report 2017 3 4 Contents Highlights of 2017 06 1. Joint Address by the Chairman and the CEO 08 2. Company Identity 14 3. Aviation Market Development 26 4. Financial Performance 36 5. Business Performance 42 6. Environmental Performance 60 7. Social Performance 70 8. Future Prospects 84 Annex I: Reporting by the BoD to the AGM 88 (1) Annex II: Financial Statements 102 (1) Appendix: Sustainability Indices 154 Airport Moments 168 5 Highlights of 2017 2017 2016 Traffic Highlights Aircraft Movements Total Aircraft Movements (thousand) Other Aircraft Movements Other Aircraft Movements 19.7 18.7 5.6% All-cargo All-cargo Aircraft Aircraft 5.4 5.7 -4.1% Passenger & Combi Aircraft Passenger & Combi Aircraft 170.8 164.8 3.6% Total 2017 Total 2016 196.0 3.6% 189.1 Cargo Total Cargo Uplift (thousand tonnes) 100 1.5% 3.1% 80 89.8 88.5 60 81.8 79.4 -12.5% 40 20 8.0 9.1 0 Total Cargo Freight Mail Passenger Traffic 8.6% Total Number of Passengers (million) Business Passengers Total 2017 2.4% 24% 27% Domestic 7. 3 21.7 Connecting Passengers 7. 1 Total 2016 International 12% 21% 24% 14.4 0 5 10 12.9 20.0 6 Annual & Sustainability Report 2017 2017 IFRS 2016 IFRS € MILLION Financial Highlights 200 Profit before Tax 150 100 199.8 5.7% 50 0 189.1 500 400 Operating Revenues & ADF 300 5.2% 200 454.9 100 432.2 0 Revenues from Airport Charges & ADF 290.9 275.5 5.6% Operating Revenues & ADF per pax (€) 20.9 • ADF: Airport Development Fund • Cash equivalents for 2016 21.6 -3.1% results include €87.5 million of Euro Securities Operating Expenses • AVA: Added Value on Assets = Net Operating Profit after Tax 149.0 – (Cost of Capital x Net Asset Value) 134.8 10.6% Cash & Cash Equivalents at the end of the Year* 466.8 373.4 25% AVA** 119.6 111.9 6.9% Total Assets 5.4% 15 20 25 1,246.7 1,182.3 7 1 Joint Address by the Chairman and the CEO Joint Address by the Chairman and the CEO Year 2017 was a good one for and exceeding prior-year levels the global aviation industry, by 1.7 million, which stands for characterised by competitive a significant 8.6% increase. The oil prices, efficiency of aircraft number of flights amounted to capacity utilisation and fleet 196 thousand surpassing the growth. The combination of the respective 2016 levels by 3.6%. above resulted in a very prosperous The increase in passenger traffic year for the airlines’ profitability, was mainly driven by the strong with attractive fares, which in growth of the international market turn supported a strong growth of (+1.5 million, +12%), whereas the passenger traffic. On a global level, domestic market increased only in 2017 airlines achieved healthy by 2%. This growth was driven profitability with net profit margins by both Greek residents’ strong estimated at 4.6%, according to increase by 13%, as well as foreign IATA. Passenger traffic across residents’ healthy growth by 5% the European network posted an in total. The dynamic development average growth of 8.5%, while of the O&D passengers by an non-EU airports lead the way of increase of 12% should also be passenger traffic growth (+11.4%), highlighted, demonstrating the with EU airports also achieving continuous upsurge of Athens as an strong increase (+7.7%) compared attractive destination, assisted by to the previous year. the joint and coordinated strategic actions undertaken by the Airport In line with the global and European Company, the Municipality of aviation trends, 2017 was another Athens and stakeholders from record-breaking year for Athens the tourism industry. In terms of International Airport (AIA) in passenger demand evolution, it is terms of passenger growth, important to note that the demand reaching 21.74 million passengers for air travel has been resilient to 8 Annual & Sustainability Report 2017 the volatility of the macroeconomic The company's business model Operational Compliance and environment while it remained is based on a dynamic marketing Development process, all required unaffected by the European and strategy and incentives policy. preventive and corrective measures regional geopolitical risks. AIA's aeronautical marketing were taken for maintaining strategy encompasses emergency planning and AIA’s Our airline network in 2017 comprehensive developmental preparedness for adversities and targeted programmes for at high level, thus establishing In this framework, the airport’s airlines including incentives and a safe and resilient operating route network was significantly marketing support packages and environment. enhanced in 2017: four new constitutes a cornerstone of AIA’s airlines launched operations aeronautical strategy for healthy A significant highlight of the year to/from Athens and fifteen financial growth. In 2017, all airport was AIA’s Aerodrome Certification new international routes were charges remained unchanged for by EASA as one of the first established, while at the same the ninth consecutive year which European airports in accordance time, 17 Low Cost Carriers (LCCs) was announced during the annual with the stipulations of the offered services to 56 airports consultations with the airport relevant Commission Regulations worldwide. Overall, in 2017, users held in January 2017, as per (EC216/2008, EC1108/2009 and Athens was directly connected the Airport Charges Directives EU139/2014). The thorough and with scheduled services to (2009/12/EC) transposed to the time-consuming certification 137 destinations (103 of which Greek legislation by the PD 52/12. process involved extensive international) in 53 countries, inspections and checks by the operated by a total of 59 carriers. With regards to incentives offered HCAA for an eight-month period. The launch of the new long-haul to airlines by AIA, 13 different services of Emirates to New developmental and targeted In terms of investments, AIA York, of Scoot to Singapore and incentives, both for developing new completed in April 2017 a large- of Air China’s non-stop flight to markets, as well as for reinforcing scale redevelopment project that Beijing should be highlighted as existing ones, were in effect during commenced in September 2016, they have largely contributed to 2017. Applied in a fully transparent namely the Intra-Schengen Project the respective regions’ successful and non-discriminatory manner, (ISP), covering the entirety of the evolution. It is important to they were widely used by operating Schengen area and a significant note that all regions enjoyed a carriers since the majority of part of All-Users Departures sharp growth, supported by the the latter made use of at least areas. ISP followed the same airport’s significantly enhanced one targeted or developmental design principles and approach as route network coupled with the incentive and many received the ones of the successful Extra- favourable evolution of passenger marketing support. Schengen Project (ESP) that was demand. completed in 2015. This extensive Our Business refurbishment resulted to a Our Financial performance and remarkable net commercial space Business model Airport operations were delivered increase of 1,500 m2, expanding efficiently and smoothly throughout AIA’s total commercial space to 2017 was also a record year in the year. The Athens Airport more than 11,200 m2. terms of financial performance: remained a slot non-coordinated overall, the Airport Company airport even in the summer period The full renovation and upgrade presented healthy results and of strong demand for aircraft of the Schengen (15,000 m2) and recorded Profit Before Tax of arrival and parking. This demand non-Schengen (9,000 m2) areas, €199.8 million, increased by €10.8 was adequately addressed through including passenger security million compared to 2016. Growth ad-hoc operational arrangements, screening centralisation, focusing in operating performance more while specific projects were carried on functionality, comfort and than offsets the additional cost out to enhance capacity, i.e. the modern aesthetics responded to requirement following increased operational upgrade of the Sa- the latest trends in the travelling traffic and the increase of the tellite Terminal Building – Phase I process and experience and offers variable element of Grant of Rights and the installation of Advanced passengers redesigned areas, Fee recorded in the Operating Visual Docking Guidance System enhanced comfort and plenty Expenses. In view of the company’s at all terminal contact stands. of options. With a significantly expected obligation to pay the Moreover, discussions with Hellenic expanded Retail and Food & Consideration for the extension Civil Aviation Authority (HCAA) Beverage selection, the robust of its concession period (upon the Air Traffic Control continued in sales performance of the new effectiveness of the ADA Extension order to fully exploit the Airport’s stores and concepts led to an Agreement), no dividend to the available capacity of two runways. increase in the Shopping Centre’s shareholders is proposed. As part of the continuous revenues of 10.6% compared to 9 1 Joint Address by the Chairman and the CEO the previous year, an increase that surpassed the respective passenger traffic annual increase by 2%. Acknowledging and rewarding our investment programme for the total aesthetic, functional and commercial upgrade in the terminal areas, the passengers rated Athens International Airport at the top position in Europe among airports in the category 15-25 million passengers, in terms of customer services’ quality, in the framework of ACI World’s globally established Airport Service Quality (ASQ) Awards. Since the airport’s opening, we measure customer satisfaction systematically and have always scored very high among our European counterparts.