(MENAFN- Swissinfo) Zurich Airport expects a long-term annual rise in passenger numbers of 2%. Its director, Lukas Brosi, explains how rising demand can be met without necessarily increasing flights and without compromising on the objective of carbon neutrality.
This content was published on April 29, 2024 - 09:00 8 minutes
Deutsch de Flughafen Zürich:“Die globale Nachfrage nach Flugreisen wächst, und wir bedienen sie” Read more: Flughafen Zürich:“Die globale Nachfrage nach Flugreisen wächst, und wir bedienen sie” Français fr ((La demande mondiale pour les voyages aériens continue d'augmenter et notre mission est de la satisfaire)) Original Read more: ((La demande mondiale pour les voyages aériens continue d'augmenter et notre mission est de la satisfaire))
Brosi, CEO of Flughafen Zürich AG, must have had a few nervous moments this winter. On March 3, citizens of canton Zurich went to the polls to decide on extending two runways at his airport. As it turned out, 61.7% of voters were in favour .
Flughafen Zürich is not a typical company. It is a semi-public listed company, quoted on the Swiss stock exchange and partly owned by the canton (one third of the shares) and the city of Zurich (5%). It not only owns and operates Zurich Airport but has major real-estate and commercial activities around the airport and is involved in operating eight other airports abroad.
The company employs around 1,700 people in Zurich and some 475 abroad. In 2023, it posted turnover of CHF1.2 billion ($1.3 billion) and EBITDA (earnings before interest, tax, depreciation and amortisation) of CHF677 million. In the same year, passenger numbers hit 28.9 million. SWI swissinfo talked to Brosi at the company's headquarters.
SWI swissinfo: You took over the management of Flughafen Zürich about a year ago. Have you defined a new vision for the company?
Lukas Brosi: There was no need. I've been working at the airport for 15 years, including seven as chief financial officer. Our company has a long-range focus, so my role is to ensure continuity. However, interacting with the political world and the public was a new area for me. I recently devoted some 20% of my time to these activities, especially prior to the vote on lengthening the runways, which was fortunately approved by the people of Zurich.
In May 2023 Lukas Brosi took on the role of Chief Executive Officer of Flughafen Zürich AG. idd SWI: What are your airport's strengths and weaknesses?
L.B.: Our airport is located conveniently close to the city of Zurich and has excellent public transport links. Air travellers also appreciate its compact size. The quality of our services is recognised, as shown by the many awards we have received. Our main weakness, however, is our operating hours, which are limited from 6am to 11:30pm. This is more restrictive than many other European airports.
SWI: What are the main recent improvements to the traveller experience?
L.B.: I'm thinking in particular of the rapid scanners for hand luggage at security checks. We carried out successful trials over the Easter holidays, and these scanners will be deployed from June this year.
SWI: Which are the best airports in the world?
L.B.: The best airports are those that were built recently, as they have the advantage of starting from scratch with new infrastructure. I'm referring above all to certain airports in the Middle East, for instance in Qatar, Abu Dhabi and Dubai, as well as Istanbul airport.
SWI: Who are your competitors?
L.B.: Rather than talking about direct competition, it would be more accurate to say that we are comparable to Frankfurt, Munich and Vienna airports. Nor are we vying with Geneva or Basel airports, as our catchment areas are different. We also have different business models. We operate as an intercontinental hub, while Geneva and Basel mainly focus on point-to-point connections.
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SWI: It took a long time for western Switzerland to accept the transfer of long-haul flights from Geneva to Zurich in 1996. Has the hatchet been buried?
L.B.: Absolutely!
SWI: Officially, you are the Swiss air hub, yet your website is only in German and English. Why not in the other national languages, French and Italian?
L.B.: Two-thirds of the users of our website and social networks are German-speaking, while English-speakers account for 25%. This breakdown guided our language choices. As for announcements at our departure gates, we plan to use AI (artificial intelligence) to ensure they are also made in the language of the destination countries.
SWI: You are a public limited company quoted on the stock exchange. Is this a plus compared with Geneva Airport, which operates as an autonomous public entity?
L.B.: Our privatisation and listing on the Swiss stock exchange, which was approved by the people of Zurich in 2000, were important decisions. This gives us greater business agility and makes us more responsive to the expectations of professional investors. Of course, we also have to deal with local residents, civil society and elected politicians, including some popular votes.
The main advantage for the government is that all investments made since 2000 have been financed with private funds obtained via the capital market and airport taxes. This means we have received no public subsidies and, over the past 20 years, we have even paid in CHF1.3 billion to the state (canton, city, municipalities) in the form of taxes and dividends.
SWI: What are the most profitable segments of your customer base and how are you working to increase their size?
L.B.: Our mission is to meet all demand, and all passengers pay the same airport tax. In other words, we are unable to maximise our profitability in this manner, unlike the airlines.
We have found, however, that people travelling for tourism or to visit family spend more time at our airport than those on business trips, leading them to spend more money in our shops and restaurants.
“All the investments made since 2000 have been financed with private capital,” says Lukas Brosi. Keystone/imagebroker SWI: Is it still possible to increase the number of flights?
L.B.: With our current infrastructure, we could step up the number of flights, as we still have off-peak moments, such as around 3pm, even if these times are not very popular. It is important to note that the runway extension recently approved by voters concerns only safety and punctuality, and does not as such open the way to increasing the number of flights.
SWI: What about the growth in passenger numbers?
L.B.: The number of flights has remained relatively stable over the past 20 years, while passenger numbers have risen sharply. This is thanks to the use of larger aircraft and improved seat-occupancy rates. We expect a 2% annual increase in passenger numbers, although this will very much depend on demographic and economic growth.
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SWI: Reducing air travel is an essential condition for combating global warming, isn't it?
L.B.: I don't agree with this idea, because global demand for air travel is still growing and the Swiss government has given us the mission of satisfying this demand. In my view, it's up to the aviation industry to demonstrate its ability to decarbonise, in particular by replacing fossil fuels with sustainable alternatives.
Although these alternatives currently account for only 2% to 3%, it's essential to start somewhere. The aim is to achieve carbon neutrality by 2050, a goal deemed achievable according to a Swiss government reportExternal link . As far as our airport infrastructure is concerned, we are investing hundreds of millions of francs to achieve carbon neutrality by 2040.
SWI: You are also involved in eight airports in developing countries. What is your state shareholders' position on this?
L.B.: Owning, managing and building airports abroad is part of our diversification strategy, based on our core competencies. To minimise risk, we focus on infrastructure in urgent need of private investment to meet high demand, irrespective of the political orientation of the national government in question. What's more, we operate mainly in countries such as Brazil and India, which have a good track record of privatisation.
It should not be assumed that we aspire to become the world's largest airport operator: our approach is more opportunistic. And here our state shareholders (the canton and city of Zurich) fully support our strategy.
Edited by Samuel Jaberg. Adapted from French by Julia Bassam/ts
A Swiss citizen born in 1979, Lukas Brosi joined Flughafen Zürich AG in 2009. Before that, he worked for nine years at UBS in Basel and Zurich, after studying business economics at the University of Applied Sciences and Arts Northwestern Switzerland. In 2017 he was promoted to the role of chief financial officer of Flughafen Zürich, and in May 2023 became its chief executive officer.
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