REMOVING BARRIERS FOR AIR TRANSPORT&

UNLEASHING THE POWER OF AIRPORTS

Olivier Jankovec, Director GeneralEU-LATIN AMERICA Civil Aviation Summit

Rio de Janeiro, 25 May 2010

OVERVIEW

ACI EUROPE

AVIATION LIBERALISATION

EUROPEAN EXPERIENCE

AIRPORT BUSINESS TRANSFORMATION

IMPACT

WAY FORWARD

THE VOICE OF EUROPE’S AIRPORTS

AVIATION LIBERALISATION

MARKET ACCESS

- Remove ALL route & capacity constraints

- Remove pricing limitations

- Full flexibility in doing business (code sharing, etc)

OWNERSHIP & CONTROL

- Remove ALL restrictions

REGULATORY CONVERGENCE

- LEVEL PLAYING FIELD

- Progressive…… but Safety, Security, State aid, Competition

= a MUST

AIRLINE COMPETITION• New Entrants (LCCs)

• Restructuring

ROUTE DEVELOPMENT• +220%

• Mega hubs & Regional Airports

DYNAMIC MARKET STRUCTURE

• Consolidation

• Dominance of LCC model

• Next?AIRPORT COMPETITION• ‘Airport Superstore’

• Business Transformation

INCREASED ECONOMIC BENEFITS• Consumers

• Regions & Local Economies

THE EUROPEAN EXPERIENCE

BUSINESS TRANSFORMATION

Times Past

Mere infrastructure provider

Securing needs of a flag carrier

Exclusive public ownership

Dependent upon public financing

Today

Fully fledged businesses with diversified activities

Serving a wide range of customers with different needs

Corporatisation = a “MUST”Privatisation

Self-financing

KEY STRATEGIC DIRECTIONS (I)

DIFFERENTIATE FACILITIES & SERVICES

- Mainline (alliance) & LC facilitiesMarseille, Amsterdam, Bordeaux, Copenhagen, Malpensa, Brussels

DIVERSIFY PORTFOLIO OF AIRLINES

- Airport = Network Manager

- Cooperation with local authorities & Businesses

- Involvement in aviation negotiations

COMPETITIVE AIRPORT CHARGES = A “MUST”

- 3.5% of airline costs (ICAO)

- Airline-related charges: 22% of total airport revenues

- Total VISITING COSTS (TNC)

DEVELOP NEW REVENUE STREAMS

– Commercial Developments

– 47% of total airport revenues

– New management models

– … NEW THREATSWHO ban on Tobacco/Alcohol duty-free salesRestrictive cabin bag rulesSecurity

GROW INTERNATIONALLY

- Fraport, Aéroports de Paris, Schiphol, Zurich, AENA, TAV…

AIRPORT ALLIANCES- Aéroports de Paris & Schiphol Group

- SEA Milano & Aeroporti di Roma

KEY STRATEGIC DIRECTIONS (II)

NEW & DIVERSIFIED BUSINESS MODELS

AIRPORTS = JOB ENGINES EUROPEAN AIRPORTS AS EMPLOYERS– On site:

165.000 airport staff … But 1.200.000 employees

– Off site:

1000 on site jobs = 2100 national indirect jobs

MAGNETS FOR WIDER ECONOMIC ACTIVITY

– Airport proximity = key to tourism development= top criteria for company location= enabler of economic diversification

– From Air Traffic Hubs to ECONOMIC HUBS“Every 18 days, a new company sets up a business at Munich airport”

– Total direct contribution of airports to European GDP: €59 billion (ATAG 2008)

AIRPORTS = ECONOMIC COMMUNITIES

MULTIPLES STUDIES CONFIRM ECONOMIC IMPACT

– ATAG, AOA, York consulting, Oxford Economics,…

ALL AIRPORTS, big or small…

– Paris-CDG: 90.000 direct jobs, 270.000 indirect jobs

– Amsterdam-Schiphol: 2% of Dutch GDP

– Birmingham: 130 companies established

– Cologne/Bohn: + €100 million in local tax revenues

– Charleroi: 3% of city’s workforce / - 60% unemployment

CONNECTIVITY IS KEY

- Remote communities & regional development

- Not just economics: social cohesion & inclusion

THE WAY FORWARD…

POLITICAL DECISIONS

- Focus on the wider picture

- Macro economic impact

- Benefits to citizens

GLOBAL CRISIS

- Cutting cost & providing new opportunities to industry

- Multi-polar world & new consumers

- Demand for aviation will grow

ACI EUROPE ‘Road Map’

- US & Canada

- Pan-European/Mediterranean Aviation Area

- Main trading Partners: Brazil & South America

www.aci-europe.org

www.airportcarbonaccreditation.org