Competition between Airports and the Application of Sfare Aid Rules Volume H ~ Country Reports Italy Milan Linate (LIN) J Ownership and organisational structure The airport is part of Gruppo SEA (Milan Airports). Ownership is 14.6% local government and 84.6% City of Milan. Other shareholders hold the remaining 0.8%. Privatisation (partial) was scheduled for the end of 2001 but was stopped after the events of 11th September. Now the proposed date is October 2002 but this has still to be finalised. Only 30% of the shareholding will be moved into the private sector with no shareholder having more than 5%. There are no legislative changes required. The provision of airport services is shared between ENAV (ATC), Italian police (police), SEA (security), ATA and SEA Handling (passenger and ramp handling), Dufntal (duty-free) and SEA Parking (car parking). There are no current environmental issues but, in the future, there is a possible night ban and charges imposed according to aircraft noise. 2 Type ofairpo Milan Linate is a city-centre (almost) airport that serves mainly the scheduled domestic and international market with a growing low-cost airline presence (Buzz, Go). There is very little charter and cargo traffic but some General Aviation. The airport is subject to traffic distribution rules imposed by the Italian government with the aim of 'encouraging' airlines to move to Malpensa. Traffic Data (2000) Domestic fíghts Scheduled Charter Total Terminal Passengers (arrivals) 2 103 341 _ 2 103 341 Terminal Passengers (departures) 2 084 008 . 2 084 008 Cargo (tonnes - inbound) 1093 7 1 100 Cargo (tonnes - outbound) 1213 4 1217 Aircraft movements (arrivals + departures) 44 022 8 44 030 Intemaüonal flights (Intra EU) Scheduled Charter Total Terminal Passengers (arrivals) 915 656 294 915 950 Terminal Passengers (departures) 920 653 160 920 813 Cargo (tonnes - inbound) 3 446 _ 3 446 Cargo (tonnes-outbound) 4 054 - 4 054 Aircraft movements (arrivals + departures) 21394 7 21401 Л/г Transport Group, School of Engineering, Cranfield University ITL-13 Competition between Airports and the Application of State Aid Rules Volume II ~ Country Reports Italy International nights (non-EU) Scheduled Charter Total Terminal Passengers (arrivals) 166 489 655 Terminal Passengers (departures) _ 1052 1052 Cargo (tonnes - inbound) 4 . 4 Cargo (tonnes - outbound) 1 ¡ 1 Aircraft movements (arrivals + departures) 37 51 3 Route structure and key airlines Dominant airlines at Linate are Alitalia and Air One, both ól frating the Milan Linate ~ Rome shuttle. British Airways and Lufthansa have a relatively limfpl presence. Apart from Rome, the major routes from Linate serve London, Frankfurt and Pfis. 4 Catchment area I J| The catchment area for Linate is defined in the following Tal Type of Traffic Catchment area definition Overlaps with other airports Scheduled domestic 30 minutes driving time Malpensa, Bergamo Scheduled international 60 minutes driving time Malpensa, Bergamo (origin-destination traffic) I Scheduled international 60 minutes driving time Malpensa (transfer traffic) Charter international Up to 120 minutes driving time Malpensa, Bergamo I Cargo (origin-destination traffic) Malpensa, Bergamo Cargo (transfer traffic) 5 Competing airports In terms of competing airports and market segments. Jnate does not have any real competitor because its strategic position gives an advantaj over all other airports. Linate is only 7 km from the centre of Milan and is served by motorway and public transport services. Most of the population in the catchment area of| Ian prefers to be served by Linate instead of Malpensa or Bergamo (the two nearest airports) 6 Current andfiiture investment plans There appears to have been no major investment undertaķfļj in the last few years nor is any planned in the future. As for surface infrastructure, future plans include a pre-fe sility study for a new subway line linking the airport with the centre of Milan. ITL-14 Air Transport Group, School of Engineeringl roranfiė/cr University Competition between Airports and the Application of State Aid Rules Volume II ~ Country Reports Italy 7 Airport charges Airport charges include take-off, landing, passenger service, aircraft parking, air bridges and security. The principal charges are based on MTOW. Until 2002, the government, with the exception of air bridge charges (decided by the airport), set all charges. The charges are the same for all airlines. Starting from 2002 charges will be revised by each airport taking into account traffic levels and airport costs. The charges still have to be approved by government. There are no user discounts available. 8 Financial performance The summary SEA Group Profit and Loss account (Euro) below is taken from the Annual Report of SEA Milan. Data is not broken down for individual airports (not in the public domain, anyway). Year ending 2000 í 999 1998 Aeronautical income 399 387 340 354 277 030 338 174 945 Concession income 93175 468 83 573 661 80 853 393 Other income 46 631 958 44 845 608 Tota income 539 194 765 482 696 299 4Í9 028 338 Staff costs 251 028 151 255 068 320 206 034 799 Security costs Policing costs Depreciation 56 798 173 54 133 540 30 905 297 Other costs 143 734 232 141 024 570 115 670 335 Tota costs 451 560 556 450226 430 352 6Í0 431 Operating profir 87 634 209 32 469 868 66 417 907 Interest received 12 569 117 21 289 137 8 354 207 Interest paid 17 316 057 14 541 908 Extraordinary items 77 190 108 42 767 543 - 9 638 635 Pre-tax profit 160 077 377 81 984 641 65 733 478 Taxation 76 721 587 39 106 855 33 613 081 Net prom 83355 790 42 877 785 31 520 397 There is no data available on security costs but these are probably included in other staff costs. Corporation tax is paid on earnings. Depreciation is based on straight line, for the following typical depreciation periods: Terminal and buildings 100 years Runways, taxiways and aprons nil if paid for by Government Air Transport Group, School of Engineering, Cranfíeld University ITL-15 Competition between Airports and the Application of State Aid Rules Volume II ~ Country Reports Italy Plant and machinery 3-10 years Terminal / airport systems 5 years Vehicles, equipment 4-5 years Sources offitnding None reported 10 Public funding issues There has been no significant investment at Linate foillmany years. In any case, the introduction of traffic distribution rules had the intention ó||ramferrmg airlines to Malpensa (being congested and suffering from environmental constrJJits!) with Linate being reserved solely for Alitalia and Air One operations. As it has turned otíjt, due to EU pressure, the major European airlines still have a presence at Linate, which is|ļie preferred airport for busmess traffic associated with Milan. ITL-16 Air Transport Group, School of Engineering, Wkanfield University Competition between Airports and the Application of State Aid Rules Volume II ~ Country Reports Italy Milan Malpensa Ownership and organisational structure The airport is part of Gruppo SEA (Milan Airports). The main shareholders of SEA are the Municipality of Milan owning 84.559 % and the Province of Milan owning 14.558 %. Other shareholders hold the remaining 0.8%. Malpensa has an alliance with other important cargo hubs and is part of Galaxy bitemational Cargo Airport Alliance. SEA also owns 49.98 % of Sacbo (the company handling Bergamo Orio al Serio airport), 12.5 % of Aeradria (the company handling Rimini airport), 5 % of Gesac (the company handling Napoli airport) and 0.96 % of Sagat (the company handling Torino Caselle airport). Privatisation (partial) was scheduled for the end of 2001 but was stopped after the events of 11* September. Now the proposed date is October 2002 but this has still to be finalised. Only 30% of the shareholding will be moved into the private sector with no shareholder having more than 5%. There are no legislative changes required. The provision of airport services is shared between ENAV (ATC), Italian police (police), SEA (security), ATA and SEA Handling (passenger and ramp handling), Dufiital (duty-free) and SEA Parking (car parking). Environmental restrictions were imposed in late 2000. Runways have to be operated 8 hours for departures and then 8 hours for departures, alternatively on a continuous basis. There are other noise restrictions that are applied to flight paths, noise abatement and night flights. 2 Type of airport Milan Malpensa is an international gateway airport serving the north of Italy. This airport caters for all market. In recent years Alitalia had thought about developing Malpensa as a hub for their international operations. However, due to environmental and infrastructure constraints this policy has had to be revised and hub operations now appear to be concentrated on Rome Fiumicino. Traffic Data (2000) Domestic flights Scheduled Charter Total Terminal Passengers (arrivals) 2 728 122 38 817 2 766 939 Terminal Passengers (departures) 2 688 028 36 579 2 724 607 Cargo (tonnes - inbound) 4 226 50 4 276 Cargo (tonnes -outbound) 6 888 89 6 977 Aircraft movements (arrivals + departures) 72 799 1368 74167 Air Transport Group, School of Engineering, Cranfìeld University ITL-17 I Competition between Airports and the Application of State Aid Rules Volume II - Country Reports Italy International tiights (Intra EU) Scheduled Charter Total Terminal Passengers (arrivals) 3 647 805 366 793 4 104 598 Terminal Passengers (departures) 3 623 655 376 203 3 999 858 Cargo (tonnes - inbound) 16 522 91 16 613 Cargo (tonnes - outbound) 23 214 128 23 342 Aircraft movements (arrivals + departures) 109 526 ! 5 882 115 408 ! I 1 í International lights (non-EU) Scheduled I Charter Total ι Terminal Passengers (arrivals) 2 735 700 ! 795 638 3 531 338 I Terminal Passengers (departures) 2 687 493 I '| 815 307 3 502 800 I I Cargo (tonnes - inbound) 108 868 I 668 109 536 Cargo (tonnes - outbound) 128 939 I 1297 130 236 Aircraft movements (arrivals + departures) 47 965 10 082 58 047 Route structure and key airlines Alitalia heavily dominates the scheduled domestic núujist segment and, likewise, the international scheduled and cargo market.