LAP community Message from the President of the Executive Committee 3 Who we are: Vision, mission and values 5 LAP Partners 6 Our team 8 1 Engine of employment 10
LAP in figures Infrastructure 2001-2014 11 Mission accomplished 12 Investments 15 Transfers to the Peruvian Government 16 2 Economic performance 18
Sustainable development Tourism overview 2014 20 The airline industry 21 Airport development in the region 23 3 A strategic location 25
Optimized Services Our airline operations 27 Our destinations and frequencies 32 4 Development of non-aeronautical businesses 36
Trust and Commitment A highly safe and efficient airport 38 We continue to be the best 39 Caring for the environment 40 Community support 41 5 A greater airport for a greater Peru 42 Message from the President of the Executive Committee Who we are: Vision, mission and values LAP Partners Our team 1 Engine of employment
We are proud to have received more than 15.6 million passengers at Jorge Chávez International Airport (JChIA) during 2014; that is, a 5.1% increase from the previous year (14,908,772 passengers in 2013).
The continuous increase in passenger traffic in recent years continued to be a considerable challenge for Lima Airport Partners (LAP) in 2014. However, it was possible to stand up to it thanks to LAP’s committed and qualified team, especially in what concerns JChIA’s expansion project.
LAP’s achievements during 2014 include the construction of the airport’s 5 km perimeter fence, perimeter road, and lighting system. LAP also tendered the design, architecture, and engineering of the new airport to Arcadis and its contractor companies. The total investment amounts to $17 million.
The infrastructure works will cover most of the 7 million square meters assigned to the expansion project. Arcadis is currently implementing a design approach based on a modular concept, the need to ensure infrastructure sustainability and efficient construction and maintenance costs, and state-of-the art airport technology. It is important to recall that the airport’s expansion plans include a second runway, additional aircraft parking space and taxiways, a new terminal, and more access ways to the airport, among other facilities.
Moreover, LAP introduced improvements during 2014 to increase the airport’s infrastructure capacity at the three initial passenger contact points: verification of payment of the Unified Tariff for Airport USE (TUUA), security control-departures, and migration modules. Additionally, LAP initiated the construction and remodeling of aircraft parking positions. These improvements will significantly enhance JChIA’s capacity to meet the increasing passenger traffic.
It is also important to mention that, for the sixth consecutive year, JChIA won the award for Best Airport in South America granted by Skytrax Research, a market consultant specialized in airport-related issues. JChIA also received the award for Best Airport Staff in South America for the fourth consecutive year. Both awards are a source of pride for LAP and its staff.
As part of its commitment to preserving the environment and contributing to sustainable development, LAP certified internationally the measurement of its carbon footprint for 2013. We are proud that JChIA is the first airport in the country, and one of the first in the region, to calculate this indicator.
3 At the same time, LAP will face important challenges in 2015. Notably, the conceptual design of the future airport will be completed by the second quarter of the year. JChIA’s enhanced infrastructure will increase its capacity to serve more passengers (expected to reach 30 million by the end of the concession contract) and airlines; and improve its connectivity to other parts of the country. In this way, we aim to meet the expectations of our users and passengers and create value in a sustainable manner for the benefit of the airport community and the country in general.
Finally, I wish to thank LAP’s collaborators and the members of the airport community for their efforts and commitment. It is thanks to them that we can continue to reinforce JChIA’s position as South America’s leading airport.
Jorge Von Wedemeyer President of the Executive Committee
4 Message from the President of the Executive Committee Who we are: Vision, mission and values LAP Partners Our team 1 Engine of employment
VISION LAP aspires to be: a world reference in innovation and service quality, focused on people and the environment; the company responsible for creating Latin America’s first and last impression to the rest of the world; an inspiring and successful firm offering excellent job opportunities.
MISSION As operator of JChIA, LAP seeks to offer passengers and airlines a memorable experience.. We manage Jorge Chávez International Airport with a view to offer passengers and airlines a memorable experience and position Peru as the best connection point in Latin America.
VALUES Unity Communication Courage Empathy Impact
PRINCIPLES Service Quality Comprehensive Security Innovation and Efficiency Social and Environmental Responsibility Financial Sustainability
5 Message from the President of the Executive Committee Who we are: Vision, mission and values LAP Partners Our team 1 Engine of employment
Lima Airport Partners S.R.L. is a company formed by the consortium that won the international public tender for the concession to operate JChIA, in accordance with the agreement signed with the Peruvian Government.
The consortium was formed by German airport operator Fraport AG Frankfurt Airport Services Worldwide (known at the time as Flughafen Frankfurt/Main AG) with a 42.75% stake; Bechtel Enterprises Services Ltd. (known at the time as Bechtel Enterprises International, Ltd.), a member of the Bechtel conglomerate, a U.S. business group originally dedicated to construction, with the same stake; and Cosapi S.A., a Peruvian construction company, with a 14.5% stake.
2000 Concession awarded to the Frankfurt-Bechtel-Cosapi consortium on November 15, 2000.
2001 The concession contract between the new operator and the Peruvian Government was signed on February 14, 2001. In December 2001, Bechtel Enterprises Services Ltd. transferred its stake in LAP to Alterra Lima Holdings Ltd., a subsidiary of Alterra-Partners, an airport-operating company whose shareholders were Bechtel and Singapore Changi Airport Enterprise Pte. Ltd. (SCAE), the operator of Singapore Airport.
2003 In September 2003, Cosapi sold its stake in LAP to Alterra Lima Holdings Ltd. From that moment, the partnership structure of LAP was the following: Alterra Lima Holdings Ltd. 57.25% and Fraport AG Frankfurt Airport Services Worldwide 42.75%.
2007 In August 2007, Fraport AG acquired Alterra Lima Holdings and temporarily became the sole owner of LAP.
2008 In May 2008, the International Finance Corporation (IFC), a member of the World Bank Group, and the Fund for Investment in Infrastructure, Public Services and Natural Resources, managed by AC Capitales SAFI S.A., became LAP partners. Since that date, the partnership structure of LAP is as follows: Fraport AG 70.01%; IFC 19.99%; and the Fund for Investment in Infrastructure, Public Services and Natural Resources 10%.
6 Leader Fraport AG is one of the leading companies in the global airport industry. At Frankfurt Airport, it operates one of the most important air transport hubs; and, as a provider of integrated services, it has a presence in many countries, including Russia, Egypt, Bulgaria, Turkey, China, and India.
30 years In compliance with the terms of the concession agreement, the Peruvian Government has granted LAP a 30-year concession for the construction, improvement, conservation, and exploitation of JChIA.
7 Message from the President of the Executive Committee Who we are: Vision, mission, and values LAP Partners Our team 1 Engine of employment
JUAN JOSÉ SALMÓN Chief Executive Officer
SABINE TRENK Chief Operating and Commercial Officer
MILAGROS NORIEGA Chief Administration and Financial Officer
BABETT STAPEL Chief Organization and Communications Officer
WINFRIED GLÄSER Chief Infrastructure Officer
* In service as of December 31, 2014. Mr. Gustavo Morales was Chief Commercial Officer until November 2014. Ms. Sabine Trenk then took over as both Chief Commercial and Operating Officer.
8 Message from the President of the Executive Committee Who we are: Vision, mission, and values LAP Partners Our team 1 Engine of employment
General Organizational Chart
EXECUTIVE BOARD
Internal Auditing
Chief Executive Office
Legal Department
Concession Compliance
Institutional Relations
OPERATIONS AND COMMERCIAL ADMINISTRATION AND FINANCE ORGANIZATION AND COMMUNICATION INFRAESTRCUTURA
Security Management Financial Planning Human Resources Construction
Airside & Terminal Controlling & Accounting Management Systems Maintenance Management Commercial Information & Telecommunications Corporate Communication Airport Master Planning
Protocol Investor Relationship and Project Financing Design
Purchasing Project Management
In service as of December 31, 2014. Mr. Gustavo Morales was Chief Commercial Officer until November 2014. Ms. Sabine Trenk then took over as both Chief Commercial and Operating Officer. 9 Message from the President of the Executive Committee Who we are: Vision, mission, and values LAP Partners Our team 1 Engine of employment
Number of employees
YEAR LAP Outsourcing Total
2001 218 435 653
2002 276 461 737
2003 294 379 673
2004 285 371 656
2005 319 366 685
2006 330 377 707
2007 449 352 801
2008 473 373 846
2009 483 437 920
2010 533 441 974
2011 503 484 987
2012 524 539 1,063
2013 405 670 1,075
2014 412 768 1,180
10 Infrastructure 2001-2014 Mission accomplished Investments Transfers to the Peruvian Government 2 Economic performance
2001 2014
Terminal area 39,467 m2 86,600 m2
Apron area 165,000 m2 373,792 m2
Number of aircraft parking positions 18 51
Number of passengers boarding bridges 0 19
Number of baggage belts for international flights 3 6
Immigration positions at international arrivals 12 30
Immigration positions at international departures 12 24
Perú Plaza Not yet in place 3,846 m2
Total area under concession (millions of square meters) 6,2
Number of commercial concessionaires 68
Number of commercial outlets 110*
Runway length (meters) 3,507
*Includes duty free, retail outlets, services, F&B, VIP lounges, urban transportation, hotel services, and advertising.
11 Infrastructure 2001-2014 Mission accomplished Investments Transfers to the Peruvian Government 2 Economic performance
INITIAL PHASE COMPLETED
On February 14, 2001, LAP took over the concession to run JChIA for a 30-year period. The concession agreement establishes that LAP is responsible for the construction, improvement, and exploitation of the airport.
At the beggining of the concession, the state of JChIA reflected 40 years of lack of investment in maintenance and modernization. In view of this situation, the Peruvian Government decided that over an eight-year period considerable investments in infrastructure and equipment should be carried out. This period is known as the Initial Period.
In this context, LAP launched a period of significant transformation, starting with the renovation of the airport deeper structures: electric, sanitation, and communications facilities, as well as mechanical equipment (baggage belts, elevators, escalators). It was necessary to prepare the airport for the great transformation lying ahead and, at the same time, address risks to operational safety; i.e., ensure safety of facilities by reinforcing and building the airport’s perimeter fence around an area of approximately 4,100 m2; clear waste and garbage from the apron to minimize wildlife hazards; and use state-of-the art environmental technologies to remove all asbestos remains in the building.
The design of the new airport was entrusted to renowned Peruvian architect Bernardo Fort Brescia. The interior design (columns, walls, and floors) was inspired by the colors of Peru’s coastal desert; and trapezoid forms, a trademark of Inca architecture, were used in walls, screens, floor tiles, and other features. Thus, the decoration, colors, and arrangement of certain design elements reflect Peru’s cultural wealth, thereby providing a sense of identity and pride to all Peruvians.
The two stages envisaged to complete the Initial Phase of the modernization project were implemented within their deadlines (December 2004 and December 2008, respectively).
12 Phase 1 of the airport’s expansion, launched in January 2005, included the following works:
• Expansion of the passenger terminal. In 2001 it covered an area of 39,467 m2; by 2005 it had expanded to 65,528 m2.
• Installation of seven passenger boarding bridges.
• Construction of new domestic and international concourses.
• A new 5,500 m2 commercial area (“Peru Plaza”).
• The cargo building, later superseded by the LAP Cargo and Airmail Center.
• A 60/10 KW electric substation with a 12 MVA output, including a 60 KW transmission line.
• Four water cisterns, two with a capacity of 500 cubic meters each and the other two with a capacity of 1,500 cubic meters each.
• New offices and larger areas for Government entities operating in the airport.
13 Phase 2 of the airport’s expansion was launched in January 2009 and included the following works:
• Expansion of the International Concourse by 8,850 m2; construction of seven new departure lounges; installation of seven additional PLBs; and opening of four new commercial outlets.
• Expansion of the Central Concourse by 5,301 m2. The immigration areas located there, were enlarged; and six new arrival and four new departure control positions installed.. The security control area was reconfigured and five new commercial outlets were inaugurated.
• Expansion of the Domestic Concourse by 4,146 m2. Five new departure lounges were built there and five new boarding bridges were installed.
• Internal remodeling of the Central Tower and reinforcement of the terminal to make it fully earthquake-resistant.
• Enlargement of the South Platform by 12,000 m2.
• Construction of an exit taxiway to allow cargo aircraft to reach their parking positions more rapidly in the airport’s south area.
The construction works for phase 2 of the expansion of JChIA were inaugurated in January 2009 in the presence of President Alan García and Mr. Stefan Schulte, Chairman of the Executive Committee of Fraport, LAP’s main shareholder. LAP thus complied with all the terms stipulated by the Peruvian Government in the Concession Contract for the 2001-2008 Initial Period.
14 Infrastructure 2001-2014 Mission accomplished Investments Transfers to the Peruvian Government 2 Economic performance
Years In U.S. dollars
2001 10,908,000
2002 11,313,000
2003 58,357,000
2004 72,771,000
2005 17,896,257
2006 24,862,229
2007 17,512,500
2008 43,823,856
2009 8,727,385
2010 6,326,270
2011 18,525,442
2012 14,443,972
2013 18,852,831
2014 13,252,067
TOTAL US$ 337,571,808
LAP’S investments as of end-2014 amounted to $337,571,808. Total investments in 2014, amounting to $13,252,067, included the following: perimeter fence around the new area (phase 1); development of transition projects; contracting of the design, architecture, and engineering of the new airport; a new runway and commercial projects; expansion of the North Platform; and refurbishing of the Central Tower (floor 7 and others).
15 Infrastructure 2001-2014 Mission accomplished Investments Transfers to the Peruvian Government 2 Economic performance
During 2001-2014 LAP has paid $1,433,539 million to the Peruvian Government in concession fees, taxes, and transfers to Government entities.
It is important to mention that the amount paid in concession fees is equivalent to 46.51% of LAP’s total gross revenues; i.e., 46.50 cents must be transferred to the Government for each invoiced dollar, regardless of whether it has actually been collected. The Government allocates a significant portion of these funds to subsidizing airports in other parts of the country.
In addition, 50% of the income from landing and take off services at JChIA is transferred to Corpac S.A., together with 20% of the TUUA collections on international flights. Moreover, the Government agency responsible for the surveillance of public-use transportation infrastructure (OSITRAN) receives 1% of LAP’s gross revenues as regulatory fee.
16 Infrastructure 2001-2014 Mission accomplished Investments Transfers to the Peruvian Government 2 Economic performance
Transfers to the Peruvian Government 2001 2002 2003 2004 200 5 2006 2007 2008 2009 2010 2011 2012 2013 2014 To ta l
Concession fee 19,027 24,440 26,590 29,700 35,517 38,135 46,954 54,038 60,760 68,912 81,808 93,670 104,460 110,786 794,797 to the Peruvian State 46,511%
Transfers to CORPAC 9,343 10,933 11,658 12,889 14,985 16,292 18,750 20,497 22,013 24,262 26,515 28,872 31,865 32,178 281,052
50% Ianding and take off 5,264 6,092 6,168 6,751 8,090 8,696 9,598 10,463 11,419 13,002 14,261 15,388 16,897 16,897 148,986
20% Internacional TUUA 4,079 4,841 5,490 6,138 6,895 7,596 9,152 10,034 10,594 11,260 12,254 13,484 14,968 15,281 132,066
Regulatory Fee 492 644 691 774 912 998 1,202 1,373 1,543 1,746 2,033 2,312 2,583 2,744 20,047
Transfers under 28,662 36,017 38,939 43,363 51,414 55,425 66,906 75,908 84,316 94,920 110,356 124,854 138,908 145,708 1,095,896 Concession Contract
Tax Transfers 7,507 7,449 10,088 4,682 6,802 13,579 20,532 18,721 26,345 35,946 36,413 46,767 49,164 53,647 337,642
Total Transfers 36,369 43,466 49,02 7 48,045 58,216 69,00 4 87,438 94,62 9 110,661 130,866 146,769 172,621 188,072 199,355 1,433,539
17 Infrastructure 2001-2014 Mission accomplished Investments Transfers to the Peruvian Government 2 Economic performance
Passenger traffic at JChIA continued to grow during 2014. In all, JChIA served 15,664,993 passengers, a 5.1% increase from the previous year.
Gross revenues amounted to $271,9 million, a 5,7% increase from the previous year, driven by a good performance in aircraft and passenger traffic (mainly domestic departures) and commercial revenues, which increased by 8.7%.
The increase in passenger, aircraft, and cargo traffic, as well as the adjustment in service tariffs in line with the RPI-X methodology, resulted in an overall 4.7% increase in aeronautical revenues (72% of total revenues).
TUUA revenues grew by 5.4%, while landing and take-off revenues increased by 0.3%; and aircraft parking and ground handling revenues increased by 1.7% and 2.7%, respectively.
Cargo and fuel tariff revenues rose by 3.2% and 7.3%, respectively, the latter driven by a 2.7% increase in the volume of fuel gallons dispatched; and revenues from the use of PLBs increased by 8,6%.
Commercial revenues increased by 8.7% (27% of total revenues) in 2014. Revenues from parking lot use experienced an annual growth of 11.7%; and retail and F&B revenues increased by 6.0% and 3.5%, respectively.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $85.12 million in 2014 (a 9.1% increase from the previous year). Net profits for the year amounted to $45.55 million (a 15% increase from 2013).
18 FINANCIAL RESULTS (Millions de dollars) 2014 vs. % 2013 2013 vs. % 2012
(+) Aeronautical revenues 196.72 4.7 187.91 11.8
TUUA (Single Fee for Airport Use) 112.40 5.4 106.62 14.5 Landing and take-off 33.92 0.3 33.81 9.8 Aircraft parking 2.93 1.7 2.88 14.7 Ground Handling 6.13 2.7 5.97 8.7 Passenger boarding bridges 12.88 8.6 11.86 17.0 Cargo 6.80 3.2 6.59 3.3 Fuel Throughput 21.66 7.3 20.18 2.2 (+) Commercial revenues 72.89 8.7 67.04 10.6
(+) Other revenues 2.21 -3.3 2.39 -2.4
Gross revenues 271.92 5.7 257.34 11.3
(-) Corpac and Concession Fee -142.96 4.9 -136.33 11.3
Net revenues 128.96 6.6 121.01 11.4
(-) Operating expenses -43.83 1.9 -43.00 5.4 EBITDA 85.12 9.1 78.03 15.0
Net Income 45.55 14.6 39.75 12.7
19 Tourism overview 2014 The airline industry Airport development in the region 3 A strategic location
According to UNWTO’s World Tourism Barometer1, in 2014 international tourist arrivals reached 1,138 million, a 4.7% increase from the previous year (i.e., 51 million more tourists than in 2013). It is the fifth consecutive year in which growth exceeds the average numbers since the 2009 global crisis.
By region, growth was considerable in the Americas (7%) and Asia-Pacific (5%), while in Europe (4%), the Middle East (4%), and Africa (2%) it was more moderate. At the sub-regional level, North America (8%) had the best results, followed by Northeast Asia, South Asia, Southern and Mediterranean Europe, Northern Europe, and the Caribbean (7% each).
According to UNWTO Secretary General, Taleb Rifai, in recent years tourism has proved to be a surprisingly strong and resilient industry with a great capacity to contribute to economic recovery, as it generates billions of dollars in exports and creates millions of jobs. This has happened in destinations all over the world, but especially in Europe, which is struggling to emerge from one of the worst economic crises in its history.
According to the Ministry of Trade and Tourism (Mincetur), as of end-2014 Peru had received approximately 3.2 million tourists, a 2.0% increase relative to 20132 (i.e., 60 thousand additional tourists).
According to the UNWTO, in 2014 South America grew 6.0% vis-à-vis a world growth of 4.7% 3. It is important to note that South America contributes with 55% of international tourists arriving in Peru. However, in 2014 arrivals decreased by 1.9%.
The main countries of origin of tourists traveling to Peru showed the following growth rates in 2014: Ecuador 8.2%, Brazil 1.3%, and Colombia 11.2%. In contrast, arrivals from Venezuela and Argentina decreased by 66.7% and 0.04%, respectively. Arrivals from Chile, Peru’s main tourism market, increased slightly, to 1.2%, while the number of visitors from the U.S. increased by 5.6%. The latter two represent more than 40% of tourists arriving in Peru4.
1 Source:http://media.unwto.org/es/press-release/2015-01-27/mas-de-1100-millones-de-turistas-viajaron-al-extranjero-en-2014 2 Source:http://www.mincetur.gob.pe/newweb/Portals/0/prensa/2014/noticia_268_2014.html 3 Source:http://media.unwto.org/es/press-release/2015-01-27/mas-de-1100-millones-de-turistas-viajaron-al-extranjero-en-2014 4 Source:http://www.mincetur.gob.pe/newweb/portals/0/turismo/PERU_Lleg_Tur_por_pais_2004_2014.xls 20 Tourism overview 2014 The airline industry Airport development in the region 3 A strategic location
Figures provided by the International Air Transport Association (IATA) show that world passenger traffic in 2014 (measured in RPK – Revenue Passenger Kilometers) increased by 5.9%5 (international 6.1%, domestic 5.4%), with an aircraft load factor of 79.7% (0.2% more than in 2013). The results by region were as follows: Asia-Pacific 7.1%, Europe 5.8%, North America 2.7%, Middle East 12.6%, Latin America 6.4%, and Africa 0.3%. Emerging markets, such as Asia-Pacific and the Middle East, account for more than half of global passenger growth; and in recent months, domestic market growth became more important. According to IATA CEO Tony Tyler, at 5.9%, demand growth exceeded the average growth rate for the last ten years.
The International Air Transportation Association (IATA) has revised upward its forecast for the airline industry. Airlines’ net revenues are expected to reach $19,900 million in 2014 and up to $25,000 million in 20156; i.e., a 3.2% margin, equivalent to a net profit of $7.08 per passenger. The fall in oil prices and the recovery in global growth support this expected outlook, which will result in higher profits for users due to lower costs and greater operating efficiently. However, airlines face considerable challenges, mainly political instability, geopolitical conflicts, and lingering weaknesses in some regions; and, as Mr. Tyler emphasizes, a net profit margin of 3.2% leaves little room for maneuver in 2015.
In Latin America, the international passenger traffic grew 5.8% in 2014, the second strongest after the Middle East. Capacity increased 4.7% from the previous year, resulting in an aircraft load factor of up to 80% (0.8 percentage points more than in 2014). Even though growth has receded in Brazil, the region’s commercial volume has improved in recent months.
5 Source:http://www.iata.org/pressroom/pr/Pages/2014-12-10-01.aspx 6 Source: http://www.iata.org/pressroom/pr/Pages/2015-02-04-01.aspx 21 Latin American airlines face a mixed outlook. Domestic markets have underperformed, but the strengthening and relative success in the long-haul market resulted in an improved net benefit of up to $1,000 in 2015 ($700 million in 2014); i.e., $3.53 per passenger and a profit margin of 2.6%7.
IATA figures for 2014 show a 4.5% increase in merchandise air traffic (measured in freight tonne kilometers, FTK)8, resulting mainly from growth in Asia-Pacific (5.4%) and the Middle East (11.0%). Despite a weaker performance in Latin America (0.1%), all other regions expanded: North America 2.4%, Africa 6.7%, and Europe 2.0%. According to Mr. Tyler, after several years of stagnation, air cargo is picking up because of a recovery in global growth in the second half of 2014. The impact of recent concerns about the world economy, which somewhat deteriorated market confidence, is not yet evident; but the industry must remain vigilant regarding this downward risk throughout 2015.
Weak volume growth in Latin America (0.1%) was due to a slowdown across the region, mainly in Brazil and Argentina. At the same time, capacity grew by 0.3% in 2014.
7 Source:http://www.iata.org/pressroom/pr/Pages/2014-12-10-01.aspx 8 Source: http://www.iata.org/pressroom/pr/Pages/2015-02-04-01.aspx 22 Tourism overview 2014 The airline industry Airport development in the region 3 A strategic location
Standard & Poor’s (S&P)9 reports that private investments over the last decade grew significantly in Latin America’s six main economies, with the exception of Mexico (due to inadequate government planning and implementation) and Argentina (due to government intervention). In contrast, private sector participation expanded in the other Latin American economies, mainly Colombia, where one in three dollars spent in infrastructure comes from direct private investment; and Peru and Chile, where it reaches 50%.
On a positive note, the region’s infrastructure investment portfolio is the largest in decades, led by Mexico, Brazil, Colombia, Peru, and Chile, with multi-million public and private infrastructure investment projects. S&P emphasizes that Latin America’s six largest economies must invest an additional 1% of GDP in infrastructure over the next five years. Expenditure was close to the average for the region in Argentina, Brazil, Colombia, and Mexico; but fell short of it in Chile (2% of GDP) and exceeded it in Peru (4%).
According to the World Economic Forum’s Global Competitiveness Report 2014-201510, in a scale of 1 to 7, the Latin American economies that stand out regarding airport infrastructure are: Panamá (position 7/score 6.1), Puerto Rico (position 25/score 5.6), Chile (position 45/ score 5.0), El Salvador (position 47/score 5.0), Costa Rica (position 61/score 4.6), Mexico (position 63/score 4.6), Colombia (position 78/score 4.1), Peru (position 89/score 4.0), Uruguay (position 90/score 4.0), Argentina (position 107/score 3.6), and Brazil (position 113/score 3.4).
Brazil In line with its new infrastructure plan, Brazil accelerated its airport infrastructure reform as host for the recent Soccer World Cup, and in view of the upcoming 2016 Olympics. In 2013, President Rousseff’s administration tendered Brazil’s two largest airports, Rio de Janeiro (Galeão) and Belo Horizonte (Confins) to private investors for $9,139 million. Additionally, the expansion of Guarulhos International Airport, which serves São Paulo and is the main entrance gate to Brazil, has been launched. In all, 13 airports have been reformed, with an investment above $3.5 billion11.
Colombia In January 2015, the Government launched the expansion of “El Dorado” International Airport to increase the terminal’s capacity from 50 to 90 operations per hour and the passenger flow from 27 to 40 million a year starting 202112. El Dorado is Latin America’s third airport in passenger traffic and the first in cargo movement. The number of passengers per year
9 Source: http://www.bnamericas.com/news/infraestructura/crece-inversion-privada-en-infraestructura-en-a-latina-s-p1 10 Source: http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdf 11 Source: https://www.capitalmadrid.com/2014/11/19/36083/las-aerolineas-reclaman-mucha-mas-inversion-en-aeropuerto.html 12 Source: http://www.elcomercio.com/actualidad/colombia-aeropuerto-ampliacion-dorado.html 23 will increase up to a maximum of 40 million, as the terminal’s capacity has reached a limit; and therefore there are plans for a second airport (“El Dorado II”). President Santos has announced that investments amounting to $1,177 million will be carried out in 39 airports over the next two years.
Chile The Ministry of Public Works received offers from five consortiums (Grupo Pudahuel, Grupo Consorcio Aeroportuario AMB, Grupo Aeropuerto Santiago, Consorcio AMB, and Grupo Nuevo Pudahuel) interested in participating in the renewal of the tender for remodeling, expanding, and operating Arturo Merino Benítez (AMB) International Airport 13. With an estimated investment of $630 million, the new concession cycle is envisaged to start in October 2015. The project considers expanding and remodeling the passenger terminals, as well as increasing the number of self-service check-in modules and the parking space. With the new investments, the airport’s passenger capacity is expected to increase from 15 to 30 million per year.
Ecuador The Under Secretary for Civil Aeronautics, Mario Andrés Paredes, informed that the COMSA- RM consortium won the tender for the new Francisco de Orellana Airport 14. The agreement establishes the construction of a control tower, an S.C.I hangar, an aircraft platform, and a storm drainage system. The project, amounting to $15 million, will be implemented over 360 days. The capacity of the new terminal will be 400 and 160 passengers in the departure and arrivals lounges, respectively. The investment is expected to improve considerably the quality of services to users and promote the development of trade and tourism in the region.
México In February 2015, Raúl González Apaolaza, Infrastructure Corporate Director for Mexico City’s Airport Group, announced the construction of the New Mexico City Airport (NAICM). The total investment is envisaged to reach $1,360 million 15. The construction of the new air terminal is expected to be completed in October 2018 and to start operating in 2020.
In view of the positive outlook for the coming years, the region’s airport infrastructure must be adequate to meet demand in a timely manner and with excellent service.
13 Source:http://metropolitana.mop.cl/noticias/Paginas/DetalledeNoticias.aspx?item=190 14 Source: http://www.elciudadano.gob.ec/francisco-de-orellana-contara-con-nuevo-aeropuerto-para-el-2015/ 15 Source: http://www.informador.com.mx/economia/2015/572114/6/en-febrero-inicia-construccion-de-nuevo-aeropuerto-del-df.htm 24 Tourism overview 2014 The airline industry Airport development in the region 3 A strategic location
Peru’s strategic location on the west-central coast of South America provides important prospects for export and import activities. Peru’s first terminal is located in the Constitutional Province of Callao, the country’s main sea/air axis.
JChIA’s privileged location makes it a key interconnection point for passengers in the region. Reflecting this, LAN and TACA, two important foreign airlines, have established JChIA as their hub. This provides important advantages:
• As the main entrance point into the country, it is a key element for promoting Lima and the country at large.
• It connects Peru with the rest of the world, and Lima with other cities and regions in the country.
• JChIA articulates the nationwide cargo system, as Lima is the capital of Peru and its most important city.
25 Tourism overview 2014 The airline industry Airport development in the region 3 A strategic location
26 Our airline operations Our destinations and frequencies 4 Development of non-aeronautical businesses
AIRLINES
INTERNATIONAL DOMESTIC CARGO AIRLINE AIRLINES
Aerolíneas Argentinas Lan Perú Grupo Lan Cargo Aeroméxico Taca Perú Atlas Air Air Canada LC Perú Tampa Cargo Air Europa Peruvian Airlines Centurión Air France Star Perú ABX Air American Airlines Andes Air Korean Airlines Avianca ATSA Copa Airlines Solar Cargo Delta Star Perú Grupo LAN Aerolínea del Caribe - Perú Iberia Lufthansa Cargo Jet Blue Martinair Cargo KLM Sky Airlines Spirit Airlines Tam Tame United Airlines Viva Colombia
Airlines operating in Peru 23
Airlines serving international flights 20
Airlines serving domestic flights 6
Direct international destinations in December 2014 37
Direct domestic destinations in December 2014 21
International frequencies in December 2014 579
Domestic frequencies in December 2014 763
27 AIRCRAFT MOVEMENTS (THOUSANDS OF MOVEMENTS)*
Year Figures
2001 72,2
2002 70,3
2003 70,3
2004 72,3
2005 73,3
2006 77,3
2007 92,9
2008 98,7
2009 105,0
2010 120,0
2011 135,0
2012 148,3
2013 153,1
2014 155,0 155,094 1,3 % more than previous year
*Notes: Aircraft traffic includes all flights: commercial, cargo, and others.
Sources: Aircraft movement: (2001) January-FEBRUARY: CORPAC. March-December: LAMS/LAP. (2002 / 2013) Lams / SAP_LAP.
28 PASSENGERS
INTERNATIONAL FLIGHT PASSENGERS
ARRIVALS 2,933,719 1,7% more than in the previous year
DEPARTURES 2,919,821 1,7% more than in the previous year
CONNECTING (TRANSFER Y TRANSIT) 1,331,339 7,5% more than in the previous year
TOTAL 7,184,879 1,7% more than in the previous year
15,664,993 5,13 % more than in the previous year
NATIONAL FLIGHT PASSENGERS
ARRIVALS 4,208,108 7,2% more than in the previous year
DEPARTURES 4,272,006 7,1% more than in the previous year
TOTAL 8,480,114 7,1% more than in the previous year
29 PASSENGER TRAFFIC (MILLIONS OF PASSENGERS)*
Año Cifras
2001 4,1
2002 4,3
2003 4,5
2004 5,1
2005 5,7
2006 6,0
2007 7,5
2008 8,3
2009 8,8
2010 10,3
2011 11,8
2012 13,3
2013 14,9
2014 15,6
*Notes: Connecting passengers are accounted for only on arrival. In 2001, connecting passengers (transit or transfer) could not be fully recorded.
Sources:
Domestic (2001) Arrivals: DGAC-MTC. Departures: January-February: DGAC-MTC, March-December: TUUA tickets used. (2002 / 2013) Arrivals: DGAC-MTC. Departures: TUUA tickets used. International (2001) Arrivals: January-February: DGAC-MTC, March-December: Immigration Control Point-JChIA. Departures: January-February: DGAC-MTC, March-December: TUUA tickets used. Connection: Security Post (LAP). (2002 / 2013) Arrivals: Immigration Control Point-JChIA. Departures: TUUA tickets used. Connection: Security Post / Customer Service (LAP). 30 CARGO
CARGO TRANSPORT
INTERNACIONAL 272,259 metric tons 4,0% more than the previous year
DOMESTIC 30,146 metric tons 13,0% less than the previous year
TOTAL 302,405 metric tons 2,0% more than the previous year
CARGO AND AIRMAIL (THOUSANDS OF TONS)*
Year Figures
2001 114,3
2002 136,7
2003 160,3
2004 171,5
2005 177,1
2006 196,9
2007 225,4
2008 239,1
2009 232,4
2010 271,8
2011 286,6
2012 293,6
2013 296,5
2014 302,4
*Sources: Cargo and airmail movement: (2001) January-February: CORPAC. March-December: LAMS/LAP. (2002 / 2013) Lams / SAP_LAP. 31 Our airline operations Our destinations and frequencies 4 Development of non-aeronautical businesses
During 2014, aircraft traffic experienced and average increase of 28 frequencies:
• (+) New routes: 45 • (+) Increase of frequencies: 60 • (-) Reduction of frequencies: 50 • (-) Cancelled Frequencies: 27
Additionally, the following new routes were implemented:
• Asunción (Tam, 3 frequencies) • Bogota (Viva Colombia, 3 frequencies) • La Paz via Cusco (Peruvian Airlines, 7 frequencies) • São Paulo (Tame, 4 frequencies) • Talara (LAN, 7 frequencies) • Ayacucho (LAN, 3 frequencies) • Jauja (Andes Air, 3 frequencies) • Cusco (Andes Air, 3 frequencies) • Iquitos, TACA (7 frequencies) • Pucallpa via Tarapoto (Star Perú, 3 frequencies) • Tarapoto via Pucallpa (Star Perú, 2 frequencies)
32 Our airline operations Our destinations and frequencies 4 Development of non-aeronautical businesses
AIRLINE CITY AIRCRAFT AVERAGE AVERAGE SEATS FREQUENCIES
New Routes
Tam Asunción AIRBUS-320-233 156 3 Viva Colombia Bogota AIRBUS-320-214 180 3 Peruvian Airlines La Paz (vía Cuzco) BOEING-737-300 144 7 Tame Sao Paulo AIRBUS A-320 / AIRBUS A-319 128 4 LAN Talara AIRBUS-319-132 145 7 LAN Ayacucho AIRBUS-319-132 145 3 Andes Air Jauja DHC-8 76 3 Andes Air Cuzco DHC-8 76 3 TACA Iquitos A-319 / A-320-232 149 7 Star Perú Pucallpa (vía Tarapoto) BAE146-200 / BAE146-300 108 3 Star Perú Tarapoto (vía Pucallpa) BAE146-200 / BAE146-300 107 2
Sub Total 45
Increase in frequencies
TACA La Habana A-319 / A-320-232 123 1 TACA Santo Domingo A-319-132 / A-320-232 142 1 Spirit Airlines Fort Laudardale AIRBUS-319 144 1 LAN Los Angeles BOEING 767-300 / BOIENG 787-80 0 226 1 TACA México AIRBUS-319-132 / AIRBUS 320-232 122 2 United Airlines Newark BOEING 757-200 183 1 LAN Bogota A-319-132 / A-320-232 / BOEING 767-316 155 4 TACA Bogota AIRBUS-320-232 / A-321 / A-319 / A-330-24 3 151 7 LAN Buenos Aires BOEING 767-300 221 1 TACA Cali EMBRAER E190 / AIRBUS A-320 / A-319 102 3 TACA Guayaquil A-319 / A-320-232 / A-321 144 2 LAN Iguazu AIRBUS-319 / AIRBUS-320 145 2 TACA Medellin A-319 / A-320 / EMBRAER E-190 / A-321 112 3 TACA Porto Alegre AIRBUS A-319 / AIRBUS A-320 124 3
33 AIRLINE CITY AIRCRAFT AVERAGE AVERAGE SEATS FREQUENCIES
LAN Santiago A-319 / A-320-232 / B-767-300 / B-787-800 / A-340-313 174 3 Sky Airlines Santiago A-319-111 / A-320-231 / A-320-233 157 2 LAN Sao Paulo BOEING 767-300 / A-320-232 / A-319 200 1 LC Perú Cajamarca DHC-8 37 2 LAN Piura AIRBUS-319-132 / AIRBUS 320-21 4 146 2 LAN Trujillo AIRBUS-319-132 / AIRBUS 320-21 4 151 1 LAN Tumbes AIRBUS-319-132 / AIRBUS 320-21 4 155 1 LC Perú Ayacucho DHC-8 37 1 LC Perú Huanuco DHC-8 37 1 LC Perú Jauja DHC-8 37 1 LAN Cuzco AIRBUS-319-132 / AIRBUS 320-21 4 149 3 Star Perú Cuzco BAE146-100 / BAE146-200 82 2 Peruvian Airlines Cuzco BOEING-737-204 / BOEING 737-300 141 2 LAN Juliaca AIRBUS-319-132 / AIRBUS 320-21 4 146 2 Peruvian Airlines Tacna (vía Arequipa) BOEING-737-230_204 / BOEING-737-300 / BOEING-737-400 143 1 LAN Iquitos AIRBUS-319-132 / AIRBUS 320-21 4 150 1 LAN Tarapoto AIRBUS-319-132 / AIRBUS 320-21 4 151 1 Peruvian Airlines Tarapoto B-737-300 / B-737-207 / B-737-204 / B-737-230 129 1
Sub Total 60
Decrease in frequencies
Air France París B-777-228 / B-777-328 403 1 TACA San José AIRBUS A-319 / AIRBUS A-320 150 3 LAN Miami BOEING 767-300 221 1 LAN New York BOEING 767-300 221 1 Avianca Bogota A-330-243 / A-330-200 / A-320-214 / A-319-115 223 3 LAN Caracas A-319 / A-320 / B-767-300 160 3 TACA Caracas A-319 / A-320 / A-321 / EMBRAER E-190 139 3 TACA Quito AIRBUS A-319 / AIRBUS A-320 134 1 LC Perú Anta DHC-8 37 1
34 AIRLINE CITY AIRCRAFT AVERAGE AVERAGE SEATS FREQUENCIES
LC Perú Andahuaylas DHC-8 37 1 LAN Arequipa AIRBUS-319-132 / AIRBUS 320-214 151 1 LAN Arequipa (vía Cuzco) AIRBUS-319-132 145 1 TACA Arequipa A-319 / A-320-232 / EMBRAER E190 141 4 Peruvian Airlines Arequipa BOEING-737-300 / BOEING-737-400 / B-737-230 149 3 TACA Cuzco A-319 / A-321 / A-320-232 / EMBRAER E190 135 9 LC Perú Las Malvinas DHC-8 37 3 Star Perú Las Malvinas BAE146-100 / BAE146-200 90 4 LAN Pto. Maldonado A-319-132 / A-320-214 145 1 LAN Pto. Maldonado (vía Cuzco) AIRBUS-319-132 145 3 Peruvian Airlines Iquitos B-737-300 / B-737-207 / B-737-230 145 1 Star Perú Pucallpa BAE146-100 / BAE146-200 / BAE146-300 94 1 TACA Tarapoto AIRBUS-319 / AIRBUS-320-232 / EMBRAER E190 116 1
Sub Total 50
Cancellation in frequencies
LAN San Francisco BOEING 767-300 221 3 TACA Medellin (via Quito) AIRBUS-319-132 120 7 LAN Santiago (vía Buenos Aires) BOEING 767-300 221 7 Sky Airlines Santiago (vía Antofagasta) A-319-111 / A-320-233 157 3 LC Perú Pisco DHC-6 / DHC-8 25 5 Star Perú Tarapoto BAE146-100 / BAE146-200 / BAE146-300 102 2
Sub Total 27
35 Our airline operations Our destinations and frequencies 4 Development of non-aeronautical businesses
Following a global trend, airports are emphasizing non-aeronautical services as a means to create additional revenue sources. Along these lines, from the outset LAP has been committed to developing sustainable airport-related businesses.
After conducting the necessary tenders and negotiations, in 2014 LAP renewed the contracts of an important group of concession holders operating at JChIA, including:
• América Móvil (Claro) • Masajes en Braille (Express Massage) • World Duty Free Group (Rincón del Pisco) • World Duty Free Group (Multimarca - Fashion) • PeruRail
Furthermore, LAP tendered and awarded new outlets and new concession holders:
• Britt Perú (Travel Market) • Alert Perú (Chinawok) • Wigo (Wi-Fi Internet service) • JCDecaux (advertising space manager) • Representaciones Yago (Montblanc) • Art Atlas (Anntarah) • Grupo Mitchell (Sol Alpaca) • Cacao de Origen Cacaosource (Chocolat) • América Móvil (Claro – module located at the international departures area)
Additionally, with an aim to preserve the service and quality standards of franchise holders within the airport, in 2014 two “mystery shopper” studies, as well as assessments of the quality of food services, were conducted, including hygienic/sanitary inspections and microbiological studies on food, surfaces, and handling practices.
Several promotional activities were carried out during the year to increase expenditures per passenger and concessionaire sales, including:
• Anniversary Promotion “Really fly with an Audi TT Roadster or $50,000,” carried out in February-August 2014.
It is important to mention that in 2014 LAP launched “Lima Airport Shopping”, the new
36 Facebook Fan Page for the airport’s commercial trademark. It targets the Peruvian public, with an aim to create a community where passengers, customers, and users can obtain information on offers, promotions, and novelties at the airport’s outlets, restaurants, and service providers.
Contracts with the following ground transportation services (rent-a-car and taxi) were renewed through direct negotiation in 2014.
1. Chocavento S.A. (Budget) 2. Inka´s rent a car S.A. (Hertz) 3. Mc Laren S.A. (Dollar) 4. Mareauto Perú S.A. (Avis) 5. Green Airport S.A. (Taxi Green)
Regarding the development of non-aeronautical airside businesses:
Warehousing In 2014, LAP obtained once again the BASC (Business Alliance for Secure Commerce) certification for cargo transfer operations.
Additionally, a contract was signed to connect Inmobiliaria Terrano’s (IT) future Limahub logistics center directly with the airport’s cargo zone.
Ground Handling The tender for operating third-party ramp services at JChIA was granted to three important companies (Talma Servicios Aeroportuarios S.A.; Swissport Perú S.A.C.; and Servicios Aeroportuarios Andinos S.A., a member of Andino Investment Holding), to provide airlines with more service options at JChIA.
Inflight Catering At end-2013, Newrest Inflight Peru S.A.C. began operating at JChIA. This French-owned company was the first to establish an in-flight central kitchen in Latin America.
37 A highly safe and efficient airport We continue to be the best Caring for the environment Community support 5 A greater airport for a greater Peru
Security is a priority in all JChIA activities. In this regard, LAP not only seeks to provide its customers and passengers with an excellent airport infrastructure, but also with high-level security services.
LAP’s operations are in line with the regulations established by the Civil Aviation Security Law and the National Civil Aviation Security Program (AVSEC) of the Civil Aviation Authority (DGAC, a sub-agency of the Ministry of Transportation and Communications, MTC). LAP’s main security responsibility is to prevent illicit interferences and all actions that can put JChIA users and passengers at risk. Along these lines, LAP cooperates with Peru’s National Police (PNP) and other Government entities to facilitate their work in the fight against crime.
38 A highly safe and efficient airport We continue to be the best Caring for the environment Community support 5 A greater airport for a greater Peru
For the sixth consecutive year, and in recognition of its leading position among South America’s airports, in 2014 JChIA won important international awards. This is a source of pride and a motivation for further improving our performance.
Each year Skytrax Research, a market research consulting firm specialized in airport-related issues, carries out an Internet survey of more than 12 million passengers from 108 countries and users of at least 388 air terminals around the world to select the winners of the World Airport Awards. In April 2014, it declared JChIA winner in the category for Best Airport in South America. This time JChIA bested its closest competitors, the Guayaquil (Ecuador) and Santiago (Chile) airports, which took the second and third places, respectively.
In addition to winning the award for Best Airport in South America, in 2014 JChIA also took the award for Best Airport Staff in South America for the fourth consecutive year, in recognition of the outstanding service provided by the JChIA community.
The survey considers 39 different criteria, including access to the airport, adequate passenger transit, comfort, atmosphere, cleanliness, waiting times, immigration services, signposting, baggage handling, security controls, personnel warmth and courtesy, ease of connections, and the variety of products and services offered.
Moreover, tor the first time LAP granted its Five-Star Awards to staff members who best complied with LAP’s five values: unity, communication, empathy, courage, and impact.
39 A highly safe and efficient airport We continue to be the best Caring for the environment Community support 5 A greater airport for a greater Peru
In 2014 LAP organized important events such as the “6th Conference Cycle: Comprehensive Management” and the “Earth Hour”, with an aim to sensitize the airport community to the importance of putting in place appropriate environmental practices and ensuring their implementation and dissemination.
Additionally, In line with its commitment to preserve the environment, LAP has taken steps to prevent, control, and minimize environmental impacts caused by activities carried out at JChIA. This commitment is reflected in LAP’s environmental policy and in its Environment Management System, certified since 2004 under the ISO 14001 standard. Moreover, since 2002 LAP has in place a Quality Management System certified under the ISO 9001 standard. Finally, in 2013 JChIA’s Occupational Health and Safety Management System obtained a certification under the OHSAS 18001 norm.
LAP also ensures compliance with the maximum permissible limits established in the Gas Emissions Control Plan for vehicles and motor equipment circulating in the airport platform; and carries out an adequate monitoring of air and water quality, noise pollution, and other environmental parameters within the airport’s facilities, in line with its Environmental Impact Assessment and the relevant legislation. Additionally, in compliance with the environmental regulations in place, all processes carried out by LAP and its external companies have been subject to internal and external auditing.
40 A highly safe and efficient airport We continue to be the best Caring for the environment Community support 5 A greater airport for a greater Peru
LAP’s social responsibility policies involve determined efforts to support low-income communities in Callao. In 2014, LAP provided support to the following associations: “SOS Children’s Villages”, aimed at protecting children lacking family care; Kantaya, an NGO providing schooling reinforcement to children ages 5-15 in the Ventanilla area; and the “Sowing Together” Association, focused on improving pre-school education among children ages 3-5 from low-income families in Callao.
In this field, LAP carried out the following activities during 2014:
• Paper Recycla-thon, organized to support the “Children’s Villages” NGO (Callao). With the paper gathered it was possible to buy 180 full food rations for the children assisted by the NGO.
• Tetra-Pak Recycla-thon, organized to support the Kantaya NGO (Ventanilla). With the containers gathered by collaborators, plus the resources collected at the airport, it was possible to manufacture roof materials and furniture made of polyaluminum (a substance similar to wood obtained from Tetra Pak containers).
• “Christmas with Kantaya’s Children”, centered on the theme of recycling and involving LAP collaborators.
Additionally, since October 2012, LAP has placed charity boxes at four of the terminal’s restricted areas to collect money for the “Sowing Together”. The money is delivered monthly to the institution. In 2015, the association designated to receive the donations from passengers will be “SOS Children’s Villages”.
41 A highly safe and efficient airport We continue to be the best Caring for the environment Community support 5 A greater airport for a greater Peru
In May 2014, the construction of the perimeter fence around the lands delivered by the Ministry of Transportation and Communications (MTC) was completed. The project included the construction of approximately five linear km of definitive fence, a lighting system, and a road around the perimeter fence.
Additionally, during 2014 LAP implemented improvements in the air terminal to enhance the airport’s current infrastructure capacity. These improvements were carried out on the three initial passenger contact points: verification of TUUA payment; security control-departures; and migration modules.
The Project also implied the installation of two additional machines for verifying TUUA payment (turnstiles and optical readers); four X-ray machines; two additional arches for security control-departures; and an increase in the number of modules at the migrations area, from 16 to 24.
Following an international tender process, on September 1, 2014, LAP signed a landmark contract with Arcadis for the design and engineering of JChIA’s expansion project. Arcadis has acquired vast experience through its work in the design, planning, engineering, and architecture of important airports like Guarulhos São Paulo (Brazil), Pulkovo (Russia), Beijing (China), Heathrow and Gatwick (UK), Frankfurt (Germany), Kuala Lumpur (Malaysia), Istanbul (Turkey), and Mumbai (India).
During the last quarter of 2014, Arcadis, its engineering and design subcontractor firms, and LAP’s infrastructure, operating and commercial departments, among others, participated in workshops aimed at assessing and defining the concept for the future terminal and runway.
42