Public Consultation Document Economic Regulation Agreement 2021-2025 Message from the Chairman & Ceo
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PUBLIC CONSULTATION DOCUMENT ECONOMIC REGULATION AGREEMENT 2021-2025 MESSAGE FROM THE CHAIRMAN & CEO Augustin de Romanet Chairman & CEO Drawing on its experience and skills, The preparation of an Economic Regulation Aéroports de Paris wants to share new Agreement is a unique moment to build, through horizons with all stakeholders, to feed an open and transparent process, a collective project to enhance the attractiveness of the growth today and prepare for tomorrow. platforms of the Paris region, with all airlines, the This is the ambition of the proposal for French State and local authorities, our partners, the 2021-2025 Economic Regulation our shareholders and our employees. Aéroports Agreement (ERA), which is the subject de Paris proposes that these discussions of this public consultation document. continue beyond regulatory obligations, after the publication of this public consultation document. « Achieving our short-term, TRAFFIC CAGR medium-term and long-term goals » +2.6% « Aéroports de Paris is able and willing to share new horizons with all stakeholders to continue today’s growth and prepare for tomorrow’s growth. » Achieving our short-term, medium-term and long- term goals This proposal is part of a key moment in Aéroports de Paris’s industrial development in Paris. It seeks to be successful in the short term, medium term and long term. INVESTMENT PLAN AVERAGE ROCE = REGULATED WACC €6Bn 5.6% In the short and medium terms, operational We have an opportunity to make Paris take a decisive robustness and performance must be continuously step ahead of other airports thanks to our unique guaranteed and airline development needs to be capacity reserves in Europe. We must seize it now satisfied. We propose continuing our efforts to without delay. Accordingly, we propose beginning maintain and optimise our infrastructures without the construction on the next terminal 4 at Paris- seeking to cut corners on these requirements Charles de Gaulle and, more broadly, making our despite high investment needs elsewhere. Similarly, investments sustainable over the long term. we want to prioritise the improvement of access to our platforms and the fluidity of the passenger pathways in our terminals, especially given Paris’s hosting of the Olympic and Paralympic Games in Paris in 2024. 2021 - 2025 CAGR RATES IPC + 1.35% Put the performance of Aéroports de Paris to the EFFORTS ON REGULATED service of all EXPENSES Thanks to an economic model that encourages performance and the efforts of all our employees, -€130M the results obtained in recent years have made it possible to reconcile these time horizons without In the long term, Aéroports de Paris’s duty is to having to choose between the short, medium and anticipate the development of the platforms to long terms. Aéroports de Paris no longer needs to make them sustainable levers economically and focus on building financial performance, but on environmentally. consolidating it, so that it can benefit everyone simultaneously during the 2021-2025 period, by long-term financing for the development of Paris’s seeking to simultaneously satisfy four requirements. airport infrastructure. Only if it is profitable enough The first requirement is to achieve an investment plan to attract investors will the growth of the Île-de- nearly twice as large as the previous one, which was France airport infrastructure be able to generate already extremely ambitious. As an infrastructure lasting positive externalities. manager, Aéroports de Paris is convinced that Finally, the last requirement is the pursuit of a competitiveness will come from the quality of the moderate pricing strategy comparable to previous investments it is making to the benefit of passengers, years, despite the strong investment dynamic. partners and airlines. It is through investment that Aéroports de Paris has chosen a smooth pricing Île-de-France airports will be able to expand and policy, which will become clearer during the gain in performance and competitiveness. 2021-2025 ERA. The second requirement applies to the company By reconciling the short, medium and long terms itself by pursuing its cost-management strategy and and reconciling investments, fair remuneration for continuous improvement in operational performance capital and fair pricing, the proposal contained in and quality of service. To achieve this, it is also this public consultation document is balanced. It is necessary to continue an attractive policy for all of a sign of the confidence we have that Aéroports de our employees and have a managerial culture that Paris’s industrial and financial model can handle the can develop talent, in line with the company’s social many challenges it is facing. model. Aéroports de Paris can and wants to share new The third requirement is to achieve a fair return horizons with all stakeholders, to nurture today’s on capital employed within the regulated scope, growth and prepare for future growth. which is an essential condition for guaranteeing PRELIMINARY USER CONSULTATION 1. The economic regulation framework for Aéroports de Paris is defined principles for this new infrastructure in the short, medium and long by the provisions of the law of 20 April 2005 on airports and its terms. implementing regulations, which are now codified in the French Aéroports de Paris has chosen to organise a voluntary public Transport Code and the French Civil Aviation Code. consultation on this Terminal 4 project, which began on 12 February This framework favours a multi-annual regulation model, which is a 2019. At that time, and in the continuity of the previous discussions, new factor of visibility and performance, based on economic regulation meetings were organised to discuss the content of the consultation agreements (ERA) of up to five years, signed between the French dossier with the main airlines as well as the professional organisations Government and Aéroports de Paris. This regulation governs the that requested to join. pricing fees for services rendered, investment programmes and level of quality of service. The 2021-2025 ERA public consultation document is an additional stage in this work, providing information about the financial conditions This framework is confirmed, under the same conditions, by the draft which could be those of the terminal’s first development phase. law on corporate growth and transformation (loi “Pacte”), which is currently being adopted by the French Parliament. 4. In addition to this long-term view, throughout the second half of 2018 and up to this document’s publication, Aéroports de Paris met users 2. Pursuant to II of article R. 224-4 of the French Civil Aviation Code, the to collect their needs for the 2021-2025 period. first mandatory stage in drafting the Economic Regulation Agreement is the publication of a public consultation document in which the 5. At the start of 2019, Aéroports de Paris also consulted users on its company’s detailed proposals are presented. This is the purpose of this industrial project over the short, medium and long terms, notably document that presents Aéroports de Paris’ proposal for the Economic to align its 2021-2025 platform development project covered by the Regulation Agreement covering the 2021-2025 period. upcoming Economic Regulation Agreement with longer term evolution. This consultation will continue well after this document’s publication, as Whilst the consultation is only required after this first stage, Aéroports Aéroports de Paris has notably committed to holding meetings under de Paris has chosen to involve users and other stakeholders early in the the aegis of the International Air Transport Association (IATA). discussion process and preparation work for the public consultation document. The schedule and modalities for these discussions have 6. Lastly, this preliminary phase was fed by the work and debates that been subject to prior discussions with all stakeholders. took place within the Economic Advisory Commission of the Paris- 3. This preliminary discussion phase began at the start of 2018, when Charles de Gaulle and Paris-Orly airports, and within the Consultative Aéroports de Paris presented the Paris-Charles de Gaulle Terminal Economic Commission of Paris-Le Bourget, according to the schedule 4 project to airlines. This project arose from the needs expressed by and modalities discussed with the companies and professional users and airport capacity/air traffic match studies. organisations. Following this initial discussion phase, two meetings were organised This is how Aéroports de Paris voluntarily organised, before the during summer 2018 with the member companies of the International publication of this document, and in the absence of any regulatory Air Transport Association (IATA) based on the first functional elements obligations, four meetings of the Consultative Economic Commission of the project, i.e.: of Paris-Charles de Gaulle and Paris-Orly airports and one meeting of the Consultative Economic Commission of Paris-Le Bourget airport. • forecasts of air traffic and the capacity contribution of the project; For Paris-Charles de Gaulle and Paris-Orly airports, on 8 March 2019, • the different ground plan options; users were able to debate on traffic forecasts and the match between • the initial considerations on aircraft taxiing; airport capacities and traffic, as well as Aéroports de Paris’ investment • the functionalities and primary layout of the future building. programme. On 12 March 2019, the Commission was able to discuss the tariff structure, the quality of service and customer satisfaction. These initial discussions fed Aéroports de Paris’ work and technical On 14 March 2019, users were consulted on the change in economic studies and enabled a comparison between each stakeholders’ performance and the overall balance of the next Economic Regulation analyses, notably on long-term traffic forecasts and capacity Agreement. Lastly, on 19 March 2019, the Commission met again so requirements, which were shared with the airlines on several occasions that Aéroports de Paris could provide specific insight in response to up to the start of 2019.