Dear Shareholders,
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Flughafen Zürich AG reported a profit of CHF 84.5 million for the first half of 2018, a fall of CHF 58.7 million compared with the same period in 2017. While the disposal of its stake in Bangalore Airport positively impacted the result in the first half of 2017, additional provisions for sound insulation measures in the first half of 2018 had a negative effect. After adjusting for these one-off effects, profit rose by 16.6%.

Business review

Trend in traffic volume

Between January and June 2018, 14.6 million passengers used Zurich Airport as their departure, transfer or destination airport, representing an increase of 6.4% compared with the prior-year period. The number of local passengers rose by 6.8%, while there was an increase of 5.4% in transfer passengers. The proportion of transfer passengers declined from 28.7% to 28.4% over the prior-year period. Markets in all regions performed well. In absolute terms, the European market made the biggest contribution to growth (+5.0%), followed by North America (+8.7%), Latin America (+40.1%), Middle East (+9.1%), Africa (+23.3%) and the Far East (+5.3%).

The number of flight movements climbed by 2.4% to 134,608 take-offs and landings in the first half of 2018. The seat load factor per flight movement rose from 75.4% to 76.7% and the average number of passengers per flight movement (scheduled and charter) from 120 to 125 passengers. Compared with the prior-year period, the volume of freight handled at Zurich Airport increased by 5.4% to 244,330 tonnes.

Financial development

Trend in total revenue

Revenue grew by 10.5% year on year to CHF 540.2 million. In line with the growth in traffic, aviation revenue rose by 5.7% to CHF 309.0 million. Non-aviation revenue increased by 17.7% to CHF 231.2 million. Along with higher passenger volumes and the new contract with Dufry for airside retail units, taking over the operation of Florianópolis airport in southern Brazil had a particularly positive impact on revenue. Revenue from international airport business therefore rose to CHF 31.9 million in the first half of 2018 (prior-year period: CHF 4.9 million).

One-off effects

Flughafen Zürich AG is expanding its south-side sound insulation concept and its programme of sound insulation measures based on the night-time noise curve in the revised Sectoral Aviation Infrastructure Plan (SAIP2) approved by the Federal Council. Over and above the previously estimated CHF 340.0 million set aside for sound insulation and resident protection, further measures costing around CHF 60.0 million are planned. The present value of these additional costs of around CHF 57.6 million (before tax) was recognised as a provision as at 30 June 2018, resulting in a one-off amount of CHF 45.8 million (after taxes) being charged to the profit and loss account. All additional costs will be financed by the Airport of Zurich Noise Fund, which is adequately funded. The measures are scheduled for completion by the end of 2030.

In the prior-year period, the sale of the remaining 5% interest in Bangalore International Airport Ltd. resulted in a one-off gain of CHF 31.4 million (after taxes).

Operating expenses

Operating expenses rose by 38.4% to CHF 300.6 million in the first half of 2018, in particular due to the expansion of the sound insulation programme. After adjusting for the effects of recognising the provisions for expansion of the sound insulation programme, expenses rose by 11.9%, primarily due to setting up operations in Florianópolis. Operating expenses in Zurich increased by 1.9%, considerably lower than the growth in traffic.

Operating result and profit

At CHF 239.6 million, earnings before interest, tax, depreciation and amortisation (EBITDA) are below the prior-year figure of CHF 271.6 million. Adjusted for the provisions for sound insulation measures, EBITDA improved by 9.4% to CHF 297.2 million, representing an adjusted EBITDA margin of 55.0%.

Profit in the first half of 2018 amounts to CHF 84.5 million, down CHF 58.7 million on the result for the prior-year period. Compared with the same period last year, and in addition to the increased provision for sound insulation measures in the first half of 2018, the gain in the first half of 2017 on the disposal of the interest in Bangalore International Airport Ltd. had an effect on the result. When adjusted for these effects, profit increased by CHF 18.5 million to CHF 130.3 million (+16.6%) compared with the same period of 2017.

Segment reporting

Although revenues from the regulated segment increased in line with growth in passenger and traffic volumes, operating expenses and depreciation were actually slightly lower. As a result, the return on invested capital (on a 12-month rolling basis) rose from 5.6% to 6.7%.

The non-regulated segment is impacted in particular by the increase in invested capital as a result of THE CIRCLE construction project. On the balance sheet date, the return on invested capital (on a 12-month rolling basis) in this segment amounted to 11.8% (prior-year period: 13.5%).

Assets and financial position

At CHF 3.5 billion, non-current assets were up slightly on the 2017 year-end figure. Besides THE CIRCLE, the biggest ongoing projects in the first half of 2018 were the upgrading and expansion of the baggage system and the work on the aircraft stands on the south side of the airport.

The invested capital as at mid-2018 – adjusted for the noise component – was CHF 3.3 billion (prior-year period: CHF 3.2 billion), and return on invested capital (ROIC) was unchanged at 8.8%.

Capital management

Alongside capital expenditure on property, plant and equipment, Flughafen Zürich AG’s solid financial position also enables value-enhancing investments to be made in the company’s growth areas. Successfully taking over operation of the airport in Florianópolis marked an important milestone in the first half of 2018.

In a stable economic environment, there is also the potential to supplement the ordinary dividend by returning funds to shareholders from the capital contribution reserves. An additional dividend was again agreed at this year’s General Meeting of Shareholders and paid out of the capital contribution reserves in addition to the ordinary dividend.

Standard & Poor’s rating

Thanks to the company’s continuing solid financial position, at the end of April 2018, Standard & Poor’s raised Flughafen Zürich AG’s rating from A+ to AA–, outlook stable.


Flughafen Zürich AG expects passenger growth of around 6% in 2018. Excluding the one-off effects in financial years 2017 and 2018, earnings before interest, tax, depreciation and amortisation (EBITDA) and profit for the 2018 financial year are expected to be higher than in the previous year. Investments in 2018 will be in the region of CHF 300 million.


The global demand for mobility is also in evidence at Zurich Airport and is set to continue. The demand is being driven by population growth, economic development and the increasing internationalisation of business and research generally, as well as in our personal lives.

For some years now, we have already been operating at the limits of our capacity at peak times. Adverse weather conditions, airspace congestion in Europe and numerous strikes have also impacted on punctuality in the first half of 2018. Together with our partners SWISS and skyguide, we are doing everything in our power to mitigate capacity constraints and improve punctuality, which is vital for the operational efficiency of the airport. Short-term measures are already showing some success in this regard. Owing to lengthy approval processes and other constraints, however, other improvements are proving more difficult to implement in the long term. These are primarily aimed at gradually achieving better separation of take-offs and landings on the ground and in the air through numerous small-scale measures based on the existing runway system.

Revision of airport charges ordinance

The current Ordinance on Airport Charges came into force in 2012. The Federal Office of Civil Aviation (FOCA) has reviewed the ordinance and decided to revise parts of it. FOCA is planning to make some minor amendments and adjustments to the structure and the procedure for setting the charges, which we welcome. However, it is also considering increasing transfer payments to finance the costs of the aviation segment. Airport charges regulation must support the sustainable development of the airport, and in particular must not disincentivise the airport operator from investing in the capacity, quality and safety of the airport. This investment will only be possible if it can be financed by means of an appropriate level of airport charges. This is the standpoint we will put forward when FOCA opens consultations with the various stakeholders towards the end of 2018. The argument is particularly pertinent as, despite excellent quality standards and the high cost of living in Switzerland, the charges at Zurich fall in the middle of the range compared with other European airports. The revised ordinance is due to come into force in the summer of 2019.

New destinations and airlines

Five new long-haul destinations departing from Zurich have been added to the summer flight timetable: Chengdu (Sichuan Airlines) and Shenzhen (Hainan Airlines from August 2018) in China, Denver (Edelweiss Air) and Philadelphia (American Airlines) in the USA plus the Seychelles (Edelweiss Air). In addition, the number of flights to two important destinations were stepped up during the main season: San Francisco with United Airlines and Vancouver with Air Canada. These developments enhance Zurich’s attractiveness as a place to live and work, boost tourism and provide businesses with faster and better access to new markets.

Partial approval of 2014 Operating Regulations

FOCA has granted partial approval to our application to amend the 2014 Operating Regulations. Particularly significant improvements are the lowering of the minimum altitude for runway 32, which will now allow four-engined aircraft such as the Airbus A340 to take off from this runway in the evenings. This will significantly shorten the taxiing time for long-haul aircraft from Dock E and help to reduce delays in the evenings. Adjusting the take-off route from runway 10 in the “bise” (north-east wind) concept will avoid traffic crossing in the air. No approval has yet been granted for the most important safety measure for Zurich Airport, namely the separation of take-off and approach routes in its east concept. This element of the 2014 Operating Regulations also requires the consent of Germany, which has yet to be granted. In an additional report, FOCA also requested that we should investigate bringing forward the last take-off slot in the evening. It should be borne in mind here that Zurich Airport is already subject to one of the strictest night-time curfews for comparable airports in Europe. In its aviation policy report, the Federal Council also confirmed the current operating hours at Zurich Airport, from 6 a.m. to 11.30 p.m. These are also specified in the detailed plan for the airport in the Sectoral Aviation Infrastructure Plan (SAIP). As requested by FOCA, in the coming year we will therefore investigate the economic and operational ramifications of bringing this last slot forward.

Awards and quality of experience

Time and again, Zurich Airport is the recipient of awards for the quality of its services and general airport experience. Zurich Airport is currently ranked third among European airports in the Airport Service Quality (ASQ) awards. This ranking is significant because it derives from customer satisfaction surveys conducted among more than 600,000 passengers at over 300 airports worldwide. For the fifteenth year in succession, Zurich Airport won the prestigious World Travel Award for its customer-friendliness and consistent high quality standards. The criteria used to assess the contenders included customer satisfaction as well as the general standard of products and services.

Such accolades are only possible thanks to close cooperation with our partner companies and the daily efforts of all employees. In recognising the most attractive potential employers, the 2018 Randstad Awards are further proof that our staff are happy to go the extra mile. Flughafen Zürich AG took second place across the whole of Switzerland.

Visitor attraction in anniversary year

Zurich Airport is not only a great place to work, it enjoys continuing popularity as an excursion destination in its own right. Only Zurich Zoo and the Swiss Museum of Transport in Lucerne attract more visitors.

70 years ago, on 14 June 1948, the first aircraft took off from and landed at our airport, and on 17 November 1948 all civil aviation operations were transferred from Dübendorf to Kloten. From then on, Zurich Airport developed into a key aviation hub and an important part of Switzerland’s traffic infrastructure, as well as becoming a place that fascinates young and old alike. To celebrate our 70th anniversary, an airport experience weekend will again be held over 1 and 2 September. A wide-ranging programme featuring airshows, guided tours, bus tours and much more besides will take place at eight event areas around the main airport complex. This major event will require very careful logistical planning, and again our partner companies will provide valuable support.



Thanks to rising passenger numbers, airside revenues were very satisfactory during the first half of the year. All the restaurant units and the watches and jewellery segment recorded above-average growth. Following remodelling, the duty-free stores in the central departure and arrival area have made a good start with the new shop concept. Landside, too, revenues are growing in line with expectations. The food retail segment in particular, including Migros, Coop and Sprüngli, saw above-average growth. The restaurant AIR has been operating at Check-in 2 since the end of January 2018 already. With over 500 covers and an outdoor terrace offering seating for an additional 250 people, this refurbished restaurant is now the largest at Zurich Airport, welcoming passengers, employees and visitors alike. Various renovations were completed in the Airport Center, and two new rental contracts were signed with the lingerie brand Intimissimi and the cosmetics company Ella (opening in July 2018).

Since the installation of 38 electric vehicle charging points in car park P6, around 1,400 charging sessions have been logged, adding to our revenues from parking. The charging stations have so far run without any hitches and have been used for a total of approximately six days on average.



Following various dismantling and preparatory work, the project to upgrade and expand the baggage system at Zurich Airport was officially launched in March 2018. Among other things, this project also involves optimising the existing sorting system, building a new early bag store, and adding an extension to increase capacity. Investment costs amount to around CHF 470 million. The upgraded baggage system will cover an additional 30,000 square metres and is due to come on stream in various stages, with completion of the overall project scheduled for 2025.

Alterations to passport control hall

The alterations in the passport control hall were completed at the end of May. As well as providing more space for passengers, additional passport control desks will reduce the stress of the border control process, especially at peak periods. At the same time, automated passport control at departure was introduced in collaboration with the Zurich cantonal police. Eight gates in the immigration channel and five gates in the departure channel are now available for Swiss passport-holders.

airside construction projects: multiple entry and high-speed taxiways

An additional 200-metre long, “multiple entry” access taxiway is being built for runway 16 at Zurich Airport. The construction work has been underway since April, including demolition, laying utility supply lines, concrete laying and asphalting, and is expected to be completed in October this year. Aircraft will then be able to line up more efficiently when taking off from this runway, which in turn will improve punctuality. Two high-speed taxiways are also being built for runway 28 on the western side of Zurich Airport. They form part of the measures derived from the SAIP detailed plan. The first high-speed taxiway is expected to be completed by November 2018, and the second one by June 2019. High-speed taxiways allow aircraft to exit the landing runway more rapidly, and so release it to the next aircraft more quickly. The two airside construction projects also require some work to be carried out at night after flight operations have ended. Appropriate measures have been taken to minimise construction noise.

Oberhau car park

Flughafen Zürich AG is planning a new car park directly adjacent to the Glatttalbahn tram line. The additional car park will enable the airport operator to provide a differentiated offering, targeting in particular travellers in need of long-stay parking as well as airport personnel. In May the Swiss Federal Administrative Court rejected objections to the planning application. The Swiss Association for Transport and Environment (VCS) then submitted an objection to the Swiss Federal Supreme Court. As a consequence, the project will be delayed for approximately one year.

THE CIRCLE – Digitalisation and partnerships

THE CIRCLE is creating an inspiring place where people will be able to come together, work in a modern environment and enjoy an entirely new shopping experience. During the first half of 2018, a number of exciting partners and new tenants have signed up: in May Flughafen Zürich AG and Microsoft Switzerland agreed a strategic partnership with the goal of fully digitalising THE CIRCLE across the board for tenants, employees and visitors. Microsoft Switzerland will move its headquarters from Wallisellen to THE CIRCLE and will create the “workplace of the future” over 3,500 square metres. The International Workplace Group IWG, a global market leader in flexible office spaces with its innovative co-working concept “Spaces”, will also be leasing a 3,000-square-metre unit in THE CIRCLE. A further tenant, occupying over 2,500 square metres, is the new company Abraxas which arose from the merger of Abraxas Informatik AG with Verwaltungsrechenzentrum St. Gallen in April 2018. The company will base all its Zurich activities at THE CIRCLE and exploit the synergies between other modules and tenants.

THE CIRCLE – food and drink

Following an initial tendering process, three operators were selected to provide a part of the restaurant offering. Under the name “Sablier”, a Zurich fine dining enterprise will create a French-themed establishment especially for THE CIRCLE. Spread over some 1,500 square metres right in the heart of THE CIRCLE, this restaurant will include terraces and enjoy views out over the rooftops to the adjacent park. The successful sushi concept “Yooji’s” will also expand into THE CIRCLE. This well-known brand will occupy over 300 square metres across two floors. At the main square, “Leon Coffee & Grill” will serve employees, visitors and passengers from a 250-square-metre unit. A second tendering process for further restaurant units is already well underway. The two restaurants in the Hyatt Hotels will be run by the hotel operator itself. The building work is coming along apace, and the preparations for erecting the facade are well in hand. THE CIRCLE remains on track to open as scheduled in 2020.

International activities

Almost a year ago, Flughafen Zürich AG was awarded the concession to expand and operate the airport in the southern Brazilian city of Florianópolis. It took over the operation of this airport in January 2018, and construction work on the new terminal commenced already in April 2018. It is scheduled for completion in the second half of 2019. Flughafen Zürich AG is currently involved in the operation of six airports in Latin America. Besides Latin America, the development of our international business is focused on projects in Europe and Asia. To develop the market in Asia, the airport operator set up a Regional Office in Kuala Lumpur, Malaysia, which will be able to coordinate expansion and seize market opportunities when they arise.

Andreas Schmid
Chairman of the Board of Directors

Stephan Widrig
Chief Executive Officer