Notes to the consolidated financial statements

  • I Accounting policies

    • General remarks

      The operating licence awarded by the Federal Government authorises and obliges the airport operator, Flughafen Zürich AG, to operate Zurich Airport until 2051. In addition to combining transport services by road, rail and air, Flughafen Zürich AG also operates Zurich Airport as a shopping, entertainment and services centre.

      The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRSs) and comply with Swiss law. They have been prepared under the historical cost convention, with the exception of the financial assets of the Airport of Zurich Noise Fund, derivative financial instruments, associates and defined benefit obligations.

      The single-entity financial statements of the groupʼs subsidiaries, which have been prepared in accordance with uniform accounting policies, have been used as the basis for consolidation. The reporting date for all subsidiaries is 31 December.

      The preparation of financial statements in accordance with IFRSs requires the Management Board to make estimates and assumptions, as well as exercise its discretion, when applying the accounting policies. This may affect reported income, expenses, assets, liabilities and contingent liabilities at the time of preparation of the financial statements. In the event that such estimates and assumptions made in good faith by the Management Board at the time of preparation of the financial statements subsequently deviate from the actual circumstances, the estimates and assumptions originally made are adjusted prospectively in the financial year in which the circumstances changed.

      Judgements made by the Management Board in its application of IFRSs that have a significant effect on the consolidated financial statements, and estimates and assumptions with a significant risk of adjustment in the following financial year, are discussed in “II. Judgements and significant estimates and assumptions in the application of accounting policies” and in the following notes in Notes to the consolidated financial statements:

    • New and amended accounting policies

      CHANGES IN ACCOUNTING POLICIES

      The company adopted the following relevant amendments to International Financial Reporting Standards which are mandatory for the first time for the financial year beginning 1 January 2020:

      • Amendments to IAS 1 and IAS 8: Definition of Material
      • Amendments to IFRS 3: Definition of a Business
      • Amendments to IFRS 16: Covid-19-Related Rent Concessions
      • Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform (Phase 1)
      • Amendments to References to the Conceptual Framework in IFRS Standards

      The above-mentioned amendments did not have a significant impact on the financial position, results of operations or cash flows of Flughafen Zürich AG for financial year 2020.

      INTRODUCTION OF NEW STANDARDS IN 2021 AND LATER

      The following new or amended standards and interpretations issued by the end of 2020 and relevant to the company are not yet effective and were not applied early in these consolidated financial statements.

      Amendments to standards and interpretations

       

       

       

      Effective date

       

      Planned application by Flughafen Zürich AG

      Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform (Phase 2)

       

      *

       

      1 January 2021

       

      Financial year 2021

      Amendments to IAS 16: Property, Plant and Equipment – Proceeds before Intended Use

       

      *

       

      1 January 2022

       

      Financial year 2022

      Amendments to IAS 37: Onerous Contracts – Costs of Fulfilling a Contract

       

      *

       

      1 January 2022

       

      Financial year 2022

      Amendments to IFRS 3: Reference to the Conceptual Framework

       

      *

       

      1 January 2022

       

      Financial year 2022

      Amendments to IFRS 9 Financial Instruments – Fees in the "10 per cent" Test for Derecognition of Financial Liabilities

       

      *

       

      1 January 2022

       

      Financial year 2022

      Amendments to IAS 1: Classification of Liabilities as Current or Non-current

       

      *

       

      1 January 2023

       

      Financial year 2023

       

       

       

       

       

       

       

      * No, or no significant, impact is expected on the consolidated financial statements of Flughafen Zürich AG.

    • CHANGES IN THE CONSOLIDATED GROUP

      In November 2019, in a public tender conducted by the Indian government, Flughafen Zürich AG was awarded the concession for the construction and operation of the new Noida International Airport. In early 2020, the wholly-owned subsidiary Yamuna International Airport Private Limited based in New Delhi (India) was established for this purpose (see note 24.7, Concessions for the operation of foreign airports).

      As a precautionary measure in connection with the coronavirus crisis, Flughafen Zürich AG established the wholly-owned subsidiary Airport Ground Services AG based in Kloten, which in an emergency could take over services related to airport operations. The company was inactive at the reporting date.

    • SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      SCOPE AND METHODS OF CONSOLIDATION

      The consolidated financial statements comprise Flughafen Zürich AG and all companies in Switzerland and abroad that it directly or indirectly controls. Flughafen Zürich AG controls an entity if it is exposed or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

      The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control begins until the date on which control ceases. All assets and liabilities are therefore included in the consolidated financial statements together with all income and expenses in accordance with the principles of full consolidation. All unrealised gains and losses on intra-group transactions and all intra-group balances are eliminated on consolidation.

      Business combinations are accounted for using the acquisition method at the date of acquisition. Consideration transferred in a business combination includes the fair value of the assets transferred, liabilities assumed or incurred and equity instruments issued by the group. Transaction costs incurred in connection with a business combination are recognised in the income statement. Goodwill arising from a business combination is recognised as an asset. Goodwill represents the excess of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of any previously held equity interest in the acquiree over the fair value of the assets acquired and liabilities assumed. Two choices exist regarding the measurement of non-controlling interests. Non-controlling interests are measured at their fair value or at their proportionate share of the recognised amount of the identifiable net assets. When the excess is negative, a bargain purchase gain is recognised immediately in the income statement, after first reassessing the fair value of the net assets acquired.

      FOREIGN CURRENCY TRANSLATION

      For consolidation purposes, all assets and liabilities reported in the balance sheets of companies within the group are translated into Swiss francs (functional currency of Flughafen Zürich AG) at the closing rate. Income statements and cash flow statements are translated at the average exchange rate for the period. Foreign currency differences arising on the translation of balance sheets and income statements are credited/charged directly to the translation reserve in equity. Transactions in foreign currency are translated into Swiss francs at the exchange rate in effect on the day of the transaction.

      Foreign currency monetary items are translated at the exchange rate at the reporting date. Foreign exchange gains/losses that arise from the settlement or remeasurement of foreign currency items at the reporting date are recognised in the income statement.

      ALTERNATIVE PERFORMANCE INDICATORS

      Earnings before interest, tax, depreciation and amortisation (EBITDA)

      EBITDA comprises earnings before tax, the finance result, the share of profit/loss of associates plus depreciation and amortisation.

      Earnings before interest and tax (EBIT)

      EBIT comprises earnings before tax, the finance result and the share of profit/loss of associates.

      Revenue recognition

      Revenue is recognised by Flughafen Zürich AG when the customer obtains control of a service.

      Revenue in the “Aviation” segment primarily comprises passenger and landing charges. Charges for providing assistance to passengers with reduced mobility are received by the “PRM” segment, while the “User fees” segment primarily receives fees for the use of the central infrastructure. Revenue in the “Air security” segment mainly includes security charges, and in the “Noise” segment it mainly contains noise charges. Revenue is recognised immediately on rendering the service in question. Landing charges are billed per landing according to the weight of the aircraft. Passenger charges, fees for the use of the baggage sorting and handling system and security charges are based on the number of departing passengers. Noise charges are based, in turn, on the number of departing passengers and on an emissions-based charge according to the aircraft type.

      The main components in the “Non-regulated business” segment are revenue from the marketing and rental of the commercial infrastructure at the airport (retail, tax & duty free, food & beverage operations, advertising media, parking, rental and leasing agreements, and energy and utility cost allocation). The service is rendered as soon as the commercial space is made available and the revenue recognised accordingly. For fixed-rent tenancy agreements classified as operating leases, the rents are recognised on a straight-line basis over the term of the tenancy agreement. Conditional rental payments (e.g. from turnover-based tenancy agreements) are recognised on an accrual basis based on the turnover generated by the lessee, in which case a minimum rent may be applied. If lessees are granted significant lease incentives (e.g. rent-free periods or other rent concessions), the equivalent value of the incentive is recognised on a straight-line basis over the original or remaining lease term as an adjustment to the rental income. Any lease credit losses suffered as a consequence of lockdowns in connection with the coronavirus crisis are recognised in profit or loss when incurred. The company does not currently have any tenancy agreements classified as finance leases.

      Finance result

      The finance result comprises interest payments on borrowings calculated using the effective interest method (excluding borrowing costs relating to buildings under construction), interest expense as a result of adjusting the present value of provisions and non-current liabilities, interest and dividend income, foreign currency gains and losses, and gains and losses on financial assets.

      Interest income is recognised in the income statement using the effective interest method. Dividend income is recognised in the financial statements at the due date.

      Borrowing costs arising during the construction stage for movables, buildings and engineering structures are capitalised up until the date the asset is taken into use or at the date of completion, if earlier.

      Property, plant and equipment

      Property, plant and equipment is stated at acquisition or construction cost, less accumulated depreciation and accumulated impairment losses. The construction cost of buildings includes direct costs for labour (third-party services and internal personnel), materials and overheads, plus the borrowing costs arising during the construction stage, which are capitalised up until the date the asset is taken into use or at the date of completion, if earlier. Borrowing costs and expenditure relating to significant assets under construction are capitalised.

      Components of an item of property, plant and equipment with a different useful life are reported individually and depreciated separately. Expansion and replacement expenditure is capitalised only if it is probable that future economic benefits will flow to Flughafen Zürich AG. Maintenance and renovation expenditure is charged to the income statement when incurred.

      The assets (with the exception of land, which is not depreciated) are depreciated using the straight-line method over the estimated useful life or over the term of the lease, whichever is shorter. The useful life for each category of property, plant and equipment is as follows:

      • Buildings: maximum 30 years
      • Engineering structures: maximum 30 years
      • Movables: 4 to 20 years

      PROJECTS IN PROGRESS

      Projects in progress are stated at acquisition or production cost and include investments in projects that have not yet been billed. These mainly comprise assets under construction. Once a project has been put into operation and billed, the related asset is transferred to the relevant category of property, plant and equipment and segment and depreciated over its useful life. From the date the asset is taken into use, or from the date of completion, no further borrowing costs are capitalised.

      GOVERNMENT SUBSIDIES AND GRANTS

      Government subsidies and grants related to investments are deducted from the carrying amount in the relevant balance sheet items and recognised in profit or loss over the useful life of the related asset. They are reported in the income statement as an adjustment to the depreciation of the related asset. All government subsidies take the form of “a fonds perdu” grants and do not have to be repaid.

      LEASES AS LESSEE

      At inception of a contract, Flughafen Zürich AG assesses whether the contract is, or contains, a lease. This is the case if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. This assessment requires a certain amount of judgement.

      Flughafen Zürich AG recognises the right-of-use asset and the lease liability at the commencement date of the lease. The right-of-use asset is presented in “Right-of-use assets” and the lease liability as a current or non-current financial liability, depending on its maturity. The initial measurement of the right-of-use asset is based on the present value of the lease payments, plus any initial direct costs and costs for the obligation to dismantle and remove the asset and restore the site, less any incentives received. When calculating the present value of the lease payments, the company uses its incremental borrowing rate at the commencement date, as the interest rate implicit in the lease cannot be readily determined. The right-of-use asset is depreciated over the shorter of the lease term and the useful life of the underlying asset. The right-of-use asset is tested for impairment if there are indicators of impairment. If the lease contains an extension or purchase option that the company believes it is reasonably certain to exercise, the costs related to the option are included in the lease payments.

      Flughafen Zürich AG has decided not to recognise the right-of-use asset and the lease liability if the lease term is twelve months or less or if the lease relates to IT equipment of low value (less than CHF 5,000). Payments for such leases are recognised on a straight-line basis over the term of the contract.

      Investment property

      Investment property (in accordance with IAS 40) is property held for the long term to earn rentals or for capital appreciation. It is measured at initial recognition at its cost and subsequently at cost less straight-line depreciation and any impairment losses in accordance with IAS 36.

      In the case of projects, the costs incurred are billed and allocated to the relevant categories of investment property at the date when the related assets are brought into use. The assets are then depreciated over their useful lives.

      The useful life for each category of investment property is as follows:

      • Buildings: maximum 40 years
      • Engineering structures: maximum 50 years
      • Movables: 4 to 20 years

      JOINT ARRANGEMENTS

      A joint arrangement (in accordance with IFRS 11) is a contractual arrangement between two or more parties which gives those parties joint control of an activity. Each joint arrangement must be classified as either a joint operation or a joint venture. In a joint operation, the parties that have joint control have rights to the assets and obligations for the liabilities of the joint arrangement and account for them in relation to their interest. In a joint venture, the parties that have joint control merely have rights to the net assets of the joint arrangement (the investment is accounted for using the equity method).

      Intangible assets

      Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Intangible assets are amortised using the straight-line method.

      With the award of the operating licence, Flughafen Zürich AG was also granted a right of formal expropriation in respect of property owners exposed to aircraft noise. This right of formal expropriation was granted on condition that the airport operator bears the costs associated with compensation payments and is recognised as an intangible asset at the date when the probable total cost can be estimated based on final-instance court rulings, so that the cost can be reliably estimated in accordance with IAS 38.21. The timing of recognition may differ depending on the airport region. At the same time as an intangible asset is recognised at the present value of the expected future payments, an equal amount is recognised as a provision. Any future adjustments to the probable total cost already recognised as assets and liabilities will be reflected on both sides of the balance sheet. The intangible asset is amortised using the straight-line method over the remaining duration of the operating licence (i.e. until May 2051).

      In the case of clearly defined projects, external and internal costs directly attributable to the development of computer software are capitalised if they will be exceeded by the future economic benefits. The useful life of software is three to five years.

      Investments in airport operator projects

      The concession agreements for the operation of foreign airports fall within the scope of IFRIC 12 and are generally accounted for under the intangible asset model (IFRIC 12.17), as the company as operator receives the right to charge for usage as consideration for the obligation to pay concession fees and provide upgrade services. The obligations under the concession agreements to pay fixed concession fees are recognised as financial liabilities. They are initially measured at the fair value of the liabilities using a discount rate appropriate to the risk. The rights to operate the airports that are received as consideration are recognised as intangible assets in the same amount and presented as investments in airport operator projects. The rights received as consideration for the upgrade services provided are recognised as an intangible asset on an accrual basis at the cost of construction. Revenues and costs relating to upgrade services are generally recognised in accordance with IFRIC 12.14. The financial liabilities recognised are subsequently measured at amortised cost using the effective interest method. The rights recognised as assets are subsequently measured at cost less accumulated amortisation over the term of the concessions. In accordance with IFRIC 12.18, any minimum revenue guaranteed by the grantor is deducted from the intangible asset and accounted for as a financial asset.

      Investments in associates

      Associates are companies where the group is able to exercise significant influence, but not control, over the financial and operating policies (where the group holds between 20% and 50% of the voting rights). Associates are included in the consolidated financial statements by applying the equity method. Any difference between the cost of the investment and the fair value of the share of net assets acquired is determined at the time of acquisition and recognised as goodwill and included in the carrying amount of the investment. In subsequent reporting periods, the carrying amount is adjusted to recognise the share of Flughafen Zürich AG of any profit or loss and changes recognised in other comprehensive income of the investee and any dividends received.

      Investments in associates where the group holds less than 20% of the voting rights, but where it nonetheless is able to exercise significant influence, are also included in the consolidated financial statements by applying the equity method.

      FINANCIAL ASSETS OF THE AIRPORT OF ZURICH NOISE FUND

      In accordance with the principles in IFRS 9, the financial assets of the Airport of Zurich Noise Fund are classified as at amortised cost (bonds) or at fair value through profit or loss (other financial assets).

      Derivative financial instruments

      Derivative financial instruments are used exclusively for the purpose of hedging interest rate and currency risks, and are recognised as other receivables or other current liabilities at fair value. Changes in fair value are recognised in the income statement.

      Inventories

      Inventories mainly comprise operating supplies and consumables used for the maintenance and repair of property, plant and equipment and are stated at cost or, if lower, at net realisable value. The first-in, first-out method is applied when calculating the cost.

      Receivables

      Receivables are measured initially at fair value and subsequently at amortised cost, which is usually their nominal value, minus individual allowances for doubtful accounts. As soon as there is sufficient evidence that a receivable will not be recoverable, it is directly written off or offset against the corresponding allowances.

      Flughafen Zürich AG uses a simplified method to calculate expected credit losses on trade receivables. Changes in credit risk are not tracked; instead, a loss allowance is recognised at each reporting date on the basis of the lifetime expected credit losses. In addition to forward-looking factors specific to the borrowers and general economic conditions, credit loss experience to date is also taken into account.

      The recoverable amount of receivables is the present value of the estimated future cash flows. Impairment losses on receivables are reversed if the amount of the impairment loss decreases and the decrease is related to an event that occurred in a period after the impairment loss was recognised.

      Cash and cash equivalents

      Cash and cash equivalents comprise cash on hand, in postal accounts and at banks and short-term investments with a maturity of 90 days or less from the date of acquisition.

      IMPAIRMENT OF ASSETS

      The carrying amounts of non-financial assets (excluding deferred taxes) are assessed once a year for indications of impairment. If such indications exist, impairment tests are performed for cash-generating units (CGU) and non-financial assets in accordance with IAS 36.

      An impairment exists if the carrying amount of a CGU or a non-financial asset exceeds its recoverable amount (higher of fair value less costs of disposal and value in use).

      Value in use is calculated using the discounted cash flow method, where the discount rate applied is a post-tax rate that reflects the risks associated with the relevant asset. If an asset does not generate cash inflows that are largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

      Impairment losses are recognised in profit or loss. They may be reversed if there are indications that the impairment loss has decreased or no longer exists and if there has been a change in the estimates used to determine recoverable amount. The increased carrying amount cannot exceed the carrying amount that would have been determined had no impairment loss been recognised in prior years.

      Equity

      Share capital

      Shares are classified as equity since they are non-redeemable and dividend payments are at the discretion of the company.

      Treasury shares

      The cost (purchase price and directly attributable transaction costs) of treasury shares is deducted from equity.

      Dividends

      Dividends are recognised as a liability as soon as they have been approved at the General Meeting of Shareholders.

      Financial liabilities

      Financial liabilities are initially recognised at fair value less transaction costs. The difference between the carrying amount and the redemption amount is amortised over the term of the liability using the effective interest method.

      Provisions

      Provisions are recognised when the entity has a present obligation as a result of a past event that occurred prior to the reporting date, if an outflow of resources is probable and the amount of the outflow can be estimated reliably. If the effect is significant, provisions are reported in the balance sheet at their present value.

      Provisions for legal and constructive obligations for sound insulation and resident protection measures are recognised on the basis of the Environmental Protection Act as soon as they can be estimated reliably.

      Provisions for formal expropriations are recognised for compensation payments as soon as the probable total cost can be estimated reliably based on final-instance court rulings (see Intangible assets).

      Employee benefits

      For defined benefit plans, the benefit cost and the defined benefit obligation are determined on the basis of various economic and demographic assumptions using the projected unit credit method and taking into account the past years of insurance up until the measurement date. The assumptions required to be made by Flughafen Zürich AG include, among others, expectations about future salary increases, the long-term return on retirement savings accounts, employee turnover and life expectancy. The calculations are performed annually by independent actuaries. The plan assets are measured annually at fair value and deducted from the defined benefit obligation.

      The defined benefit cost consists of three components:

      • service cost, which is recognised in the income statement within personnel expenses;
      • net interest expense, which is recognised in the income statement within the finance result; and
      • remeasurement components, which are recognised in other comprehensive income.

      Service cost comprises current service cost, past service cost and gains and losses on settlement. Gains and losses resulting from curtailments are regarded as past service cost. Employee contributions and contributions from third parties reduce service cost and are deducted from it if they are set out in the formal terms of the plan or arise from a constructive obligation.

      The net interest expense is the amount calculated by multiplying the net defined benefit obligation (or asset) by the discount rate, both as at the beginning of the financial year, including any changes during the period as a result of contributions and benefit payments. Cash flows and changes during the year are factored in pro rata.

      Remeasurement components comprise actuarial gains and losses resulting from changes in the present value of the defined benefit obligations due to changes in assumptions and experience adjustments, the return on plan assets less amounts included in net interest expense, and changes in unrecognised assets less effects included in net interest expense. Remeasurement components are recognised in other comprehensive income and cannot be recycled.

      The amount recognised in the consolidated financial statements is the surplus or deficit of the defined benefit plans (net defined benefit obligation or asset). However, the asset recognised as a result of any surplus is limited to the present value of economic benefits to the group available in the form of reductions in future contributions.

      Employer contributions to defined contribution plans are recognised in the income statement as personnel expenses when the employee earns the benefit entitlement. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss.

      For other long-term employee benefits, the present value of the obligation is recognised at the end of the reporting period. Changes in the present value are recognised in the income statement as personnel expenses.

      Share-based payment

      Flughafen Zürich AGʼs annual bonus programme provides for one-third of the allocated bonus to be paid out to members of the Management Board and eligible members of management in the form of shares. The share-based payment is recognised as an expense with a corresponding increase in equity.

      Income taxes

      Income taxes comprise current and deferred taxes. They are recognised in the income statement unless relating to transactions recognised in other comprehensive income or directly in equity. In these cases, taxes are also recognised in other comprehensive income or directly in equity.

      Current taxes comprise the taxes expected to be payable on the taxable result, calculated using tax rates enacted or substantively enacted at the reporting date.

      Deferred taxes are recognised for temporary differences between the carrying amount of assets and liabilities in the consolidated financial statements and their tax base using the balance sheet liability method. No deferred taxes are recognised for temporary differences in the following cases: the initial recognition of goodwill, the initial recognition of an asset or a liability in a transaction that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. Measurement of deferred taxes takes into account the expected timing and manner of realisation or settlement of the assets and liabilities concerned using tax rates that are enacted or substantively enacted at the reporting date.

      Deferred tax assets are only recognised if it is probable that the deductible temporary differences can be offset against future taxable profits.

      Segment reporting

      Reporting of operating segments is carried out in accordance with IFRS 8 in line with the internal reporting to the companyʼs chief operating decision-maker. The Board of Directors has been identified as chief operating decision-maker of Flughafen Zürich AG responsible for major decisions concerning the allocation of resources and the assessment of the operating segmentsʼ performance.

  • II Judgements and significant estimates and assumptions in the application of accounting policies

    • REPORTING OF NOISE-RELATED COSTS IN THE FINANCIAL STATEMENTS

      With respect to formal expropriations, the reporting of noise-related costs in the financial statements is a complex matter due to a multitude of relevant legal bases, unclear or pending case law and political debate. Especially in the case of formal expropriations, this financial reporting requires significant assumptions and estimates concerning the capitalisation of such costs and the obligation to recognise appropriate provisions.

      Flughafen Zürich AG has received a total of around 20,000 noise-related claims for compensation, of which around 5,800 were still pending at the end of 2020. Almost 700 of these cases are currently being examined by the Swiss Federal Assessments Commission.

      The rulings by the Swiss Federal Supreme Court in the first half of 2008 on fundamental issues related to formal expropriations enabled Flughafen Zürich AG to estimate the total cost of compensation for formal expropriations for the first time, in spite of the remaining uncertainties regarding the accuracy of this estimate. In further rulings in 2010, the Swiss Federal Supreme Court definitively set the cut-off date for the foreseeability of an eastern approach as 1 January 1961 and, in 2011, it ruled definitively on the method used to calculate a decline in the market value of investment property. In 2016, the Swiss Federal Supreme Court handed down two rulings in test cases regarding claims for compensation relating to eastern and southern approach routes and, in 2018, it handed down two rulings in test cases regarding cooperative ownership. In November 2019, the Swiss Federal Supreme Court handed down a ruling in test cases regarding the period of limitation on claims for compensation in Oberglatt. Based on these Swiss Federal Supreme Court rulings and other fundamental issues that have been decided, the company undertook a reappraisal of the costs for formal expropriations at these dates, which in each case led to an adjustment to both the provision for formal expropriations (see note 19, Provision for formal expropriations plus sound insulation and resident protection) and the intangible asset from the right of formal expropriation (see note 11, Intangible assets).

      As at the reporting date, the estimated costs for formal expropriations remained unchanged at CHF 330.0 million, of which CHF 84.5 million had already been paid out at that date. As at 31 December 2020, a provision was recognised for the outstanding costs of CHF 245.5 million (see note 19, Provision for formal expropriations plus sound insulation and resident protection).

      Depending on future legal judgements, including with respect to the southern approaches, noise-related liabilities may in future be subject to substantial adjustments, which would also require adjustments to the noise-related costs recognised as assets and liabilities in the balance sheet. At the present time, it is not possible to reliably estimate the total costs to capitalise as an intangible asset from the right of formal expropriation, the resulting amortisation or the corresponding provision.

      With respect to sound insulation and resident protection measures, the Federal Office of Civil Aviation (FOCA) required Flughafen Zürich AG, in connection with its 2014 operating regulations application, to submit an extended sound insulation programme. In June 2015, based on the sound insulation programme submitted, the Board of Directors approved a further CHF 100.0 million of measures in addition to the CHF 240.0 million of costs previously estimated for sound insulation and resident protection. The company is also required to implement sound insulation measures in the area where it claims exemptions from noise limits (emission limit). In this context, the FOCA initiated a night-time noise abatement procedure. The area with exemptions under the Sectoral Aviation Infrastructure Plan adopted by the Federal Council on 23 August 2017 was extended. In this context in mid-2018, Flughafen Zürich AG recognised a provision for further costs of CHF 60.0 million, in addition to the costs previously estimated for sound insulation and resident protection.

      As at the reporting date, the estimated costs for sound insulation and resident protection measures remained unchanged at CHF 400.0 million, of which CHF 274.8 million had already been paid out at that date. As at 31 December 2020, a provision was recognised for the outstanding costs of CHF 125.2 million (see note 19, Provision for formal expropriations plus sound insulation and resident protection).

    • IMPAIRMENT OF ASSETS IN ACCORDANCE WITH IAS 36

      The coronavirus crisis brought air traffic almost completely to a standstill in some cases. This and the related reduction in commercial activities resulted in lower demand at airports around the globe and also affected Flughafen Zürich AG. As these circumstances indicate that the carrying amount of assets could be impaired, the company performed an impairment test for its cash-generating units (CGU) and non-financial assets in accordance with IAS 36.

      An impairment exists if the carrying amount of a CGU or a non-financial asset exceeds its recoverable amount (higher of fair value less costs of disposal and value in use).

      Value in use is calculated using the discounted cash flow (DCF) method. In doing so, cash flows are derived for the CGU Zurich Airport site from the long-term budget approved for the period to 2040 and in the case of investments in airport operator projects from the budget over the remaining terms (5–29 years) of the concession agreements. These budgets and forecasts are based on past experience and expected market trends and take into account the effects of the COVID-19 pandemic. The key assumptions used to determine recoverable amount for the different CGUs and non-financial assets are disclosed and explained in further detail below:

      Zurich Airport site

      Recoverable amount was determined for the CGU Zurich Airport site as at 31 December 2020 based on a value in use calculation using cash flow forecasts derived from the long-term budget approved for the period to 2040. The post-tax discount rate (WACC) applied to the cash flow forecasts was 5.5% and the cash flows were extrapolated beyond the forecast period using a real growth rate of 0.5%.

      Investments in airport operator projects

      Recoverable amount was determined for investments in airport operator projects as at 31 December 2020 based on value in use calculations using cash flow forecasts from the financial budgets for the remaining terms of the contractually agreed concessions (five to 29 years). The country-specific WACC applied to the cash flow forecasts ranged from 7.9% to 10.3%.

      Result

      As at 31 December 2020, no impairment losses were required to be recognised for the assets concerned as a result of the impairment test on the CGUs and non-financial assets.

  • III Notes to the consolidated financial statements

    • 1 Segment reporting

      The following table shows the reportable segments in the current financial year:

      (CHF million)

       

      Regulated business

       

      Noise

       

      Non-regulated business

       

      Eliminations

       

      Consolidated

      2020

       

       

       

       

       

      Revenue from contract with customers (IFRS 15)

       

      216.0

       

      5.5

       

      156.4

       

      0.0

       

      377.9

      Other revenue (non IFRS 15)

       

      0.2

       

      0.0

       

      245.9

       

      0.0

       

      246.1

      Total revenue from third parties

       

      216.2

       

      5.5

       

      402.3

       

      0.0

       

      624.0

      Inter-segment revenue

       

      21.6

       

      0.0

       

      68.4

       

      –90.0

       

      0.0

      Total revenue

       

      237.8

       

      5.5

       

      470.7

       

      –90.0

       

      624.0

      Personnel expenses

       

      –62.5

       

      –1.6

       

      –115.2

       

      0.0

       

      –179.3

      Other operating expenses

       

      –145.4

       

      –1.4

       

      –101.9

       

      0.0

       

      –248.7

      Inter-segment operating expenses

       

      –67.6

       

      –0.8

       

      –21.6

       

      90.0

       

      0.0

      Segment result (EBITDA)

       

      –37.7

       

      1.7

       

      232.0

       

      0.0

       

      196.0

      Depreciation and amortisation

       

      –138.1

       

      –3.6

       

      –110.9

       

      0.0

       

      –252.6

      Segment result (EBIT)

       

      –175.8

       

      –1.9

       

      121.1

       

      0.0

       

      –56.6

      Finance result

       

       

       

       

       

       

       

       

       

      –24.8

      Share of profit or loss of associates

       

       

       

       

       

       

       

       

       

      –3.1

      Income tax expense

       

       

       

       

       

       

       

       

       

      15.4

      Consolidated result

       

       

       

       

       

       

       

       

       

      –69.1

       

       

       

       

       

       

       

       

       

       

       

      Invested capital as at 31 December 2020

       

      1,893.9

       

      116.1

       

      2,255.0

       

       

       

      4,265.0

      Non-interest-bearing non-current liabilities 1)

       

       

       

       

       

       

       

       

       

      581.8

      Non-interest-bearing current liabilities 2)

       

       

       

       

       

       

       

       

       

      225.2

      Total assets as at 31 December 2020

       

       

       

       

       

       

       

       

       

      5,072.0

       

       

       

       

       

       

       

       

       

       

       

      ROIC (in %)

       

      –7.8

       

      –1.3

       

      4.6

       

       

       

      –1.1

       

       

       

       

       

       

       

       

       

       

       

      Capital expenditure

       

      128.8

       

      0.1

       

      284.6

       

       

       

      413.5

      Investments in associates

       

       

       

       

       

      3.7

       

       

       

      3.7

      1) Non-interest-bearing non-current liabilities include non-current provisions for formal expropriations plus sound insulation and resident protection, deferred tax liabilities, employee benefit obligations and non-current liabilities from concession agreements.

      2) Non-interest-bearing current liabilities include current provisions for formal expropriations and sound insulation and resident protection, current tax liabilities, trade payables and other current liabilities plus accruals and deferrals.

      (CHF million)

       

      Aviation

       

      PRM

       

      User fees

       

      Air security 4)

       

      Access fees 4)

       

      Eliminations

       

      Total regulated business

      2020

       

       

       

       

       

       

       

      Revenue from contract with customers (IFRS 15)

       

      136.0

       

      4.1

       

      27.6

       

      47.6

       

      0.7

       

      0.0

       

      216.0

      Other revenue (non IFRS 15)

       

      0.2

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      0.2

      Revenue from third parties

       

      136.2

       

      4.1

       

      27.6

       

      47.6

       

      0.7

       

      0.0

       

      216.2

      Inter-segment revenue

       

      20.3

       

      0.0

       

      5.0

       

      12.6

       

      2.3

       

      –18.6

       

      21.6

      Total revenue

       

      156.5

       

      4.1

       

      32.6

       

      60.2

       

      3.0

       

      –18.6

       

      237.8

      Personnel expenses

       

      –53.0

       

      0.0

       

      –6.9

       

      –1.9

       

      –0.7

       

      0.0

       

      –62.5

      Other operating expenses

       

      –43.5

       

      –6.4

       

      –4.5

       

      –46.6

       

      –44.4

       

      0.0

       

      –145.4

      Inter-segment operating expenses

       

      –49.2

       

      –0.8

       

      –13.8

       

      –8.3

       

      –14.1

       

      18.6

       

      –67.6

      EBITDA

       

      10.8

       

      –3.1

       

      7.4

       

      3.4

       

      –56.2

       

      0.0

       

      –37.7

      Depreciation and amortisation

       

      –103.2

       

      –0.2

       

      –24.6

       

      –6.9

       

      –3.2

       

      0.0

       

      –138.1

      EBIT

       

      –92.4

       

      –3.3

       

      –17.2

       

      –3.5

       

      –59.4

       

      0.0

       

      –175.8

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Invested capital as at 31 December 2020

       

      1,368.6

       

      7.1

       

      379.8

       

      116.0

       

      22.4

       

       

       

      1,893.9

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      ROIC (in %)

       

      –5.5

       

      -62.3

       

      –3.9

       

      –3.3

       

      –178.5

       

       

       

      –7.8

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Operating assets pursuant to Ordinance on Airport Charges (OAC) 3)

       

      1,271.8

       

      3.0

       

      362.0

       

      69.3

       

      22.7

       

       

       

      1,728.8

      ROIC (in %) pursuant to OAC

       

      –5.7

       

      –97.7

       

      –4.0

       

      –4.1

       

      –181.4

       

       

       

      –8.1

      3) The Ordinance on Airport Charges (OAC) defines operating assets, on which a reasonable rate of return forms the basis for the charges, as the sum of the “residual cost of the existing assets and net working capital”. This definition therefore results in minor deviations compared with the reported capital employed.

      4) In accordance with the Swiss Ordinance on Airport Charges, the shortfall in the “Access fees” segment can be charged to the “Air security” segment. Taking the shortfall into account, the ROIC pursuant to OAC of the “Air security” segment amounts to –53.8%.

      The following table shows the reportable segments in the previous year:

      (CHF million)

       

      Regulated business

       

      Noise

       

      Non-regulated business

       

      Eliminations

       

      Consolidated

      2019

       

       

       

       

       

      Revenue from contract with customers (IFRS 15)

       

      648.4

       

      12.8

       

      285.3

       

      0.0

       

      946.6

      Other revenue (non IFRS 15)

       

      0.2

       

      0.0

       

      263.3

       

      0.0

       

      263.5

      Total revenue from third parties

       

      648.6

       

      12.8

       

      548.6

       

      0.0

       

      1,210.1

      Inter-segment revenue

       

      21.4

       

       

       

      91.9

       

      –113.3

       

      0.0

      Total revenue

       

      670.1

       

      12.8

       

      640.5

       

      –113.3

       

      1,210.1

      Personnel expenses

       

      –82.5

       

      –1.9

       

      –132.0

       

      0.0

       

      –216.3

      Other operating expenses

       

      –183.3

       

      –0.9

       

      –167.8

       

      0.0

       

      –351.9

      Inter-segment operating expenses

       

      –91.2

       

      –0.7

       

      –21.4

       

      113.3

       

      –0.0

      Segment result (EBITDA)

       

      313.1

       

      9.4

       

      319.3

       

      0.0

       

      641.8

      Depreciation and amortisation

       

      –139.1

       

      –4.3

       

      –95.4

       

      0.0

       

      –238.7

      Segment result (EBIT)

       

      174.1

       

      5.1

       

      223.9

       

      0.0

       

      403.1

      Finance result

       

       

       

       

       

       

       

       

       

      –14.0

      Share of profit or loss of associates

       

       

       

       

       

       

       

       

       

      –2.5

      Income tax expense

       

       

       

       

       

       

       

       

       

      –77.4

      Consolidated result

       

       

       

       

       

       

       

       

       

      309.1

       

       

       

       

       

       

       

       

       

       

       

      Invested capital as at 31 December 2019

       

      1,693.0

       

      109.6

       

      1,951.1

       

       

       

      3,753.7

      Non-interest-bearing non-current liabilities 1)

       

       

       

       

       

       

       

       

       

      611.6

      Non-interest-bearing current liabilities 2)

       

       

       

       

       

       

       

       

       

      228.2

      Total assets as at 31 December 2019

       

       

       

       

       

       

       

       

       

      4,593.5

       

       

       

       

       

       

       

       

       

       

       

      ROIC (in %)

       

      7.7

       

      3.7

       

      10.3

       

       

       

      8.8

       

       

       

       

       

       

       

       

       

       

       

      Capital expenditure

       

      144.4

       

      0.2

       

      679.3

       

       

       

      823.9

      Investments in associates

       

       

       

       

       

      9.3

       

       

       

      9.3

      1) Non-interest-bearing non-current liabilities include non-current provisions for formal expropriations plus sound insulation and resident protection, deferred tax liabilities, employee benefit obligations and non-current liabilities from concession agreements.

      2) Non-interest-bearing current liabilities include current provisions for formal expropriations and sound insulation and resident protection, current tax liabilities, trade payables and other current liabilities plus accruals and deferrals.

      (CHF million)

       

      Aviation

       

      PRM

       

      User fees

       

      Air security 4)

       

      Access fees 4)

       

      Eliminations

       

      Total regulated business

      2019

       

       

       

       

       

       

       

      Revenue from contract with customers (IFRS 15)

       

      381.8

       

      15.7

       

      70.7

       

      178.9

       

      1.3

       

      0.0

       

      648.4

      Other revenue (non IFRS 15)

       

      0.2

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      0.0

       

      0.2

      Revenue from third parties

       

      382.0

       

      15.7

       

      70.7

       

      178.9

       

      1.3

       

      0.0

       

      648.6

      Inter-segment revenue

       

      21.7

       

      0.0

       

      4.6

       

      11.6

       

      2.1

       

      –18.5

       

      21.4

      Total revenue

       

      403.7

       

      15.7

       

      75.3

       

      190.5

       

      3.4

       

      –18.5

       

      670.1

      Personnel expenses

       

      –69.0

       

      0.0

       

      –10.1

       

      –2.5

       

      –1.0

       

      0.0

       

      –82.5

      Other operating expenses

       

      –44.4

       

      –12.3

       

      –6.2

       

      –73.3

       

      –47.1

       

      0.0

       

      –183.3

      Inter-segment operating expenses

       

      –61.3

       

      –1.1

       

      –17.7

       

      –15.4

       

      –14.3

       

      18.5

       

      –91.2

      EBITDA

       

      229.0

       

      2.4

       

      41.3

       

      99.4

       

      –58.9

       

      –0.0

       

      313.1

      Depreciation and amortisation

       

      –103.9

       

      –0.1

       

      –25.1

       

      –6.8

       

      –3.1

       

      0.0

       

      –139.1

      EBIT

       

      125.2

       

      2.3

       

      16.1

       

      92.6

       

      –62.0

       

      –0.0

       

      174.1

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Invested capital as at 31 December 2019

       

      1,287.6

       

      1.2

       

      323.5

       

      50.1

       

      30.6

       

       

       

      1,693.0

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      ROIC (in %)

       

      7.4

       

      43.1

       

      4.0

       

      92.7

       

      –135.5

       

       

       

      7.7

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Operating assets pursuant to Ordinance on Airport Charges (OAC) 3)

       

      1,318.6

       

      2.3

       

      329.2

       

      64.4

       

      29.4

       

       

       

      1,743.8

      ROIC (in %) pursuant to OAC

       

      8.3

       

      68.6

       

      4.0

       

      113.9

       

      –144.7

       

       

       

      8.5

      3) The Ordinance on Airport Charges (OAC) defines operating assets, on which a reasonable rate of return forms the basis for the charges, as the sum of the “residual cost of the existing assets and net working capital”. This definition therefore results in minor deviations compared with the reported capital employed.

      4) In accordance with the Swiss Ordinance on Airport Charges, the shortfall in the “Access fees” segment can be charged to the “Air security” segment. Taking the shortfall into account, the ROIC pursuant to OAC of the “Air security” segment amounts to 24.6%.

      Internal reporting of operating segments to the chief operating decision-maker is carried out in accordance with the Ordinance on Airport Charges (OAC), more specifically with regard to the regulated charges and fees affected by the Ordinance. The following segments are presented for the regulated business and submitted to the chief operating decision-maker as the basis for his significant judgements and decisions:

      • “Aviation” segment
      • “PRM” segment
      • “User fees” segment
      • “Air security” segment
      • “Access fees” segment

      The “Regulated business” column presented in the segment reporting tables is not a separate segment in accordance with IFRS 8; for presentation reasons, it merely combines the reportable segments in which charges and fees are regulated by the OAC (excluding the “Noise” segment).

      All regulated revenue related to aircraft noise and the corresponding expenses are reported separately in the “Noise” segment so as to ensure transparency in presenting the performance and balance of the Airport of Zurich Noise Fund in particular (note 20, Airport of Zurich Noise Fund).

      In all, Flughafen Zürich AG therefore has the following reportable segments:

      → Aviation

      The “Aviation” segment comprises the original infrastructure and services related to flight operations. It incorporates all the core services provided to airlines and passengers by Flughafen Zürich AG in its capacity as operator of Zurich Airport. These services include the runway system, most apron zones (including control activities), passenger zones in the terminals, freight operations, passenger handling and services, and safety. The main sources of revenue for the “Aviation” segment are passenger and landing charges. Revenue from third parties is determined by passenger volumes, flight volumes and the trend with respect to aircraft take-off weights.

      → PRM

      The “PRM” (People with Reduced Mobility) segment combines the infrastructure and services related to implementing the regulation regarding the provision of support for passengers with reduced mobility. Revenue consists exclusively of the PRM charge.

      → User fees

      The “User fees" segment comprises the central infrastructure, in particular the check-in areas and facilities, baggage sorting and handling system, aircraft power supply system, handling apron areas and the related services and fees.

      → Air security

      The “Air security” segment comprises the equipment and services that Flughafen Zürich AG is responsible for providing for air security (passenger and aircraft security measures). This includes all systems and their operation and maintenance designed to prevent actions of any kind that affect the security of commercial civil aviation, in particular facilities for checks on passengers, hand luggage, checked baggage and freight. The security charges levied per passenger are the main source of revenue for covering the costs of the “Air security” segment.

      → Access fees

      The “Access fees” segment comprises the air security-related equipment and services that have to be provided in order to allow all persons other than passengers to access the airside areas. This includes all relevant systems and their operation and maintenance. It also includes airport policing duties such as surveillance patrols and other security-related duties. Revenue in the “Access fees” segment comes mainly from the fees for issuing airport badges.

      → Noise

      All revenue and expenses related to aircraft noise are reported separately in the “Noise” segment. A liquidity-based statement of noise-related data is presented in the notes to the consolidated financial statements (note 20, Airport of Zurich Noise Fund). This statement presents the accumulated surplus or shortfall as at the reporting date arising from noise charges determined on a costs-by-cause basis, less expenses for formal expropriations, sound insulation and resident protection measures, and operating costs.

      → Non-regulated business

      The “Non-regulated business” segment encompasses all activities relating to the development, marketing and operation of the commercial infrastructure at Zurich Airport. This includes all retail and restaurant/catering operations at the airport, revenue from rented premises and supplementary costs (energy supply, etc.), parking charges plus a broad range of commercial services provided by Flughafen Zürich AG. This segment also includes income and expenses from international business.

      Principles of segment reporting

      For internal reporting purposes, each profit centre has been allocated to a segment. Any internal supplies and services that have been provided to other segments have been booked as inter-segment revenue or offset against costs. For example, the “Supplementary costs” profit centre is allocated to Non-regulated business and proportionate costs are charged to the Regulated business segments on a costs-by-cause basis. Support functions are also allocated to Non-regulated business and charged on accordingly.

      Invested capital is allocated to the respective operating segments based, firstly, on the allocation of the individual assets in the fixed-asset ledger and, secondly, on the pro rata allocation of the remaining assets (buildings, engineering structures and net working capital) to the respective segments. Until projects in progress have been completed, they are allocated to the segment with the largest share of the project measured by value. The definitive allocation to segments takes place after the projects have been classified into the relevant asset categories.

      The identified operating segments have not been aggregated.

      ADDITIONAL DISCLOSURES IN ACCORDANCE WITH THE SWISS ORDINANCE ON AIRPORT CHARGES (OAC)

      In accordance with Art. 34 OAC, 30% of the economic added value in the airside area of the airport not relevant to flight operations and in road vehicle parking is to be used in the form of a transfer payment to finance the costs in the “Aviation” segment. Pursuant to this rule, in financial year 2020, an amount of CHF 0.0 million (2019: CHF 12.7 million) was allocated to the “Aviation” segment and is reflected in the reported return on operating assets. Moreover, in accordance with Art. 45 OAC, the shortfall in the “Access fees” segment can be charged to the “Air security” segment.

      Revenue from security charges is allocated in full to the “Security” segment and revenue from PRM charges to the “PRM” segment. All other flight operations charges (with the exception of aircraft noise charges) are allocated to the “Aviation” segment. A breakdown of revenue by charge type can be found in note 2, Revenue.

      Additional disclosures

      Flughafen Zürich AG primarily provides services within Switzerland. In financial year 2020, external consulting services totalling CHF 4.8 million (2019: CHF 6.6 million) were provided in Brazil and Chile. Flughafen Zürich AGʼs revenue with Lufthansa Group in the reportable segments amounted to CHF 145.7 million in the past financial year (2019: CHF 445.3 million).

    • 2 Revenue

      (CHF 1,000)

       

      2020

       

      2019

      Passenger charges

       

      68,736

       

      253,117

      Security charges

       

      47,191

       

      176,860

      PRM charges

       

      4,089

       

      15,730

      Passenger-related flight operations charges

       

      120,016

       

      445,707

      Landing charges

       

      32,652

       

      86,903

      Aircraft-related noise charges

       

      5,530

       

      12,827

      Emission charges

       

      1,592

       

      4,100

      Parking charges

       

      24,350

       

      26,641

      Freight revenue

       

      6,343

       

      8,352

      Other flight operations charges

       

      70,467

       

      138,823

      Total flight operations charges

       

      190,483

       

      584,530

      Baggage sorting and handling system

       

      14,704

       

      43,489

      De-icing

       

      4,998

       

      12,730

      Check-in

       

      2,296

       

      5,726

      Aircraft energy supply system

       

      2,095

       

      3,873

      Other fees

       

      4,182

       

      6,181

      Total aviation fees

       

      28,275

       

      71,999

      Refund of security costs

       

      439

       

      2,070

      Other revenue

       

      2,519

       

      2,852

      Total other aviation revenue

       

      2,958

       

      4,922

      Total aviation revenue

       

      221,716

       

      661,451

      Retail, tax & duty-free

       

      89,712

       

      114,211

      Food & beverage operations

       

      14,643

       

      20,129

      Advertising media and promotion

       

      13,095

       

      18,185

      Revenue from multi-storey car parks

       

      40,760

       

      82,617

      Other commercial revenue (car rentals, taxis, banks, etc.)

       

      11,588

       

      17,557

      Total commercial revenue

       

      169,798

       

      252,699

      Revenue from rental and leasing agreements

       

      113,543

       

      91,708

      Energy and utility cost allocation

       

      20,513

       

      23,740

      Cleaning

       

      2,314

       

      4,896

      Revenue from services

       

      4,550

       

      4,913

      Total revenue from facility management

       

      140,920

       

      125,257

      Communication services

       

      14,526

       

      15,969

      Other services and miscellaneous

       

      9,913

       

      17,135

      Catering

       

      534

       

      2,165

      Fuel charges

       

      3,191

       

      8,869

      Total revenue from services 

       

      28,164

       

      44,138

      Revenue from consulting activities

       

      4,785

       

      6,577

      Other revenue from international business

       

      31,232

       

      36,612

      Revenue from construction projects as part of concession agreements

       

      27,359

       

      83,350

      Total revenue from international business

       

      63,376

       

      126,539

      Total non-aviation revenue

       

      402,258

       

      548,633

      Total revenue 

       

      623,974

       

      1,210,084

      Commercial partners in retail, tax & duty free and food & beverage operations have seen sales revenues fall significantly as a result of the coronavirus crisis. The legal assessment is that the minimum annual rent agreed is not payable by lessees affected by the closures ordered by the authorities. Accordingly, Flughafen Zürich AG did not recognise the minimum rental income of CHF 18.9 million for the period of the lockdown from 17 March to 10 May 2020 and for the further closures ordered by the authorities in December 2020.

      In addition, further rent concessions for the post-lockdown period have been discussed with the commercial partners concerned and solutions already found with most lessees. The rent concessions granted in this context (rent waivers and contractual amendments such as staggered rents or lease term extensions) were recognised as assets (CHF 32.6 million) in accordance with IFRS 16 and will be amortised on a straight-line basis over the term of the relevant contracts.

      Presentation of revenue from contracts with customers (IFRS 15):

      (CHF 1,000)

       

      2020

       

      2019

      Flight operations charges

       

      190,483

       

      584,530

      Aviation charges

       

      28,275

       

      71,999

      Other aviation revenue

       

      2,749

       

      4,709

      Total aviation revenue from contracts with customers (IFRS 15)

       

      221,507

       

      661,238

      Aviation revenue (non IFRS 15)

       

      209

       

      213

      Total aviation revenue

       

      221,716

       

      661,451

      Commercial and parking revenue

       

      38,785

       

      83,132

      Revenue from facility management

       

      26,971

       

      33,013

      Revenue from services 

       

      27,238

       

      42,665

      Revenue from international business

       

      63,376

       

      126,539

      Total non-aviation revenue from contracts with customers (IFRS 15)

       

      156,370

       

      285,349

      Non-aviation revenue (non IFRS 15)

       

      245,888

       

      263,284

      Total non-aviation revenue

       

      402,258

       

      548,633

      Total revenue 

       

      623,974

       

      1,210,084

    • 3 PERSONNEL EXPENSES

      (CHF 1,000)

       

      2020

       

      2019

      Wages and salaries

       

      125,017

       

      162,632

      Pension costs for defined benefit plans 1)

       

      27,364

       

      19,898

      Social security contributions

       

      14,761

       

      14,559

      Other personnel expenses and employee benefits

       

      12,151

       

      19,242

      Total personnel expenses

       

      179,293

       

      216,331

      Average number of employees (full-time positions)

       

      1,848

       

      1,833

      Number of employees as at reporting date (full-time positions)

       

      1,788

       

      1,909

      Personnel expense per full-time position as at 31 December

       

      100

       

      113

      1) See note 22, Employee benefits.

      In financial year 2020, short-time working compensation of CHF 34.0 million was offset against personnel expenses (wages and salaries).

      Staff participation programme

      Flughafen Zürich AG gives those employees who have completed their first year of service one share free of charge as a one-off payment in kind. In financial year 2020, 147 shares (2019: 138 shares) worth CHF 19,232 (2019: CHF 24,356) were handed out.

      VARIABLE REMUNERATION FOR MEMBERS OF THE MANAGEMENT BOARD AND OTHER MEMBERS OF MANAGEMENT

      The total annual remuneration awarded to members of the Management Board and other members of management comprises a fixed salary and a variable remuneration component, which is based on the consolidated result. EBIT according to the budget (excluding the influence of aircraft noise) has been adopted as the target. The decision relating to the degree of achievement of the relevant target is taken in the following financial year (grant date). Two thirds of the variable remuneration is paid out in cash and one third in shares.

       

       

      2020

       

      2019

       

      2019 1)

       

      Price per share 1)

      (Recipient)

       

      (CHF 1,000)

       

      (CHF 1,000)

       

      (Number of shares)

       

      (CHF)

      Members of the Management Board

       

      240

       

      333

       

      2,885

       

      115.30

      Other members of management

       

      479

       

      667

       

      5,618

       

      115.30

      Adjustment of variable remuneration accrued in the previous year 2)

       

      –20

       

      –4

       

       

       

       

      Total

       

      699

       

      996

       

      8,503

       

       

      1) Shares distributed in the 2020 financial year under the variable remuneration programme for the Management Board and other members of management (number and price per share) for the 2019 financial year.

      2) In the subsequent period, the accrued variable remuneration is adjusted through personnel expenses on the basis of the actual degree of achievement of the relevant profit figure.

      As set out in the Articles of Incorporation and the relevant regulatory provisions, the Board of Directors used its discretion in setting the variable remuneration for financial year 2020. Based on that, the equity-settled portion for the reporting period was calculated and accounted for on an accrual basis. The number of shares to be granted cannot yet be established precisely at the reporting date, as that number is determined based on the quoted price as at the payment date (mid-April 2021). If the shares had been granted as at year-end, a total of 4,610 shares would have been distributed.

      REMUNERATION OF THE BOARD OF DIRECTORS

      The remuneration awarded to the Board of Directors comprises an annual lump sum plus payments for attending meetings.

      Option programme

      No option programme exists at Flughafen Zürich AG.

    • 4 OTHER OPERATING EXPENSES

      (CHF 1,000)

       

      2020

       

      2019

      Zurich Protection & Rescue Services

       

      20,422

       

      21,117

      PRM costs (service costs of service providers)

       

      6,409

       

      12,241

      Other operating costs

       

      4,446

       

      4,960

      Insurance

       

      4,002

       

      3,641

      Cleaning by external contractors, incl. snow clearing

       

      2,525

       

      3,322

      Costs for own car park

       

      1,418

       

      2,091

      Communication costs

       

      1,622

       

      2,020

      Passenger services

       

      1,167

       

      1,450

      Total other operating expenses

       

      42,011

       

      50,842

    • 5 OTHER INCOME and EXPENSES

      (CHF 1,000)

       

      2020

       

      2019

      Capitalised expenditure

       

      14,209

       

      15,264

      Other income

       

      1,817

       

      1,920

      Capitalised expenditure and other income

       

      16,026

       

      17,184

       

       

       

       

       

      Expenses for construction projects as part of concession agreements

       

      –27,067

       

      –83,350

      Other expenses

       

      –16,759

       

      –7,707

      Expenses for construction projects and other expenses

       

      –43,826

       

      –91,057

      Capitalised expenditure of CHF 14.2 million (2019: CHF 15.3 million) primarily comprises fees for the companyʼs architects and engineers as well as for project managers representing the client.

      The expenses of CHF –27.1 million (2019: CHF –83.4 million) for construction projects as part of concession agreements are the result of investments in airport infrastructure in Brazil and Chile.The corresponding counter-item can be found under note 2, Revenue.

      In the reporting period, other expenses included project costs derecognised in the amount of CHF 10.1 million. As in the previous year, losses on asset disposals and losses on receivables were also among the items recognised in other expenses.

    • 6 Finance result

      (CHF 1,000)

       

      2020

       

      2019

      Interest expenses on debentures and non-current loans

       

      –9,734

       

      –10,473

      Net interest expenses on defined benefit obligations

       

      –349

       

      –1,128

      Interest expenses on finance lease liabilities

       

      –12

       

      –72

      Other interest expenses

       

      –8,202

       

      –2,828

      Present value adjustment on provision for formal expropriations plus sound insulation and resident protection

       

      0

       

      –5,423

      Present value adjustment on liabilities from concession agreements

       

      –2,706

       

      –2,676

      Foreign exchange losses

       

      –10

       

      –909

      Other finance costs

       

      –6,705

       

      –4,103

      Total finance costs

       

      –27,718

       

      –27,612

       

       

       

       

       

      Interest income on financial assets of Airport of Zurich Noise Fund

       

      422

       

      765

      Adjustments to fair value on financial assets of Airport of Zurich Noise Fund

       

      1,804

       

      9,103

      Other interest income

       

      539

       

      3,530

      Other finance income

       

      138

       

      204

      Total finance income

       

      2,903

       

      13,602

       

       

       

       

       

      Finance result

       

      –24,815

       

      –14,010

      Interest expenses on debentures and non-current loans were down slightly on the prior-year figure to CHF –9.7 million for the reporting period. As liabilities rose overall, the decrease is due to average interest rates being lower. Other interest expenses rose to CHF –8.2 million for financial year 2020 due in particular to an increase in the foreign concessionsʼ liabilities to banks.

      While the expense for the present value adjustment on the provision for formal expropriations plus sound insulation and resident protection came to CHF –5.4 million in the previous year, no expense was incurred in the past financial year, as the applicable interest rate remained unchanged at 0.0%. The expense for the present value adjustment on liabilities from concession agreements was virtually unchanged year on year at CHF –2.7 million.

      Other finance costs for the reporting period included an impairment loss of CHF 3.8 million on a financial interest in Curaçao airport held through the subsidiary A-Port S.A.

      Positive changes in value amounting to CHF 1.8 million were achieved on the financial assets of the Airport of Zurich Noise Fund (AZNF) held at fair value in the reporting period (2019: CHF 9.1 million). Interest income on the other financial assets of the AZNF declined from CHF 0.8 million to CHF 0.4 million.

    • 7 Income tax

      (CHF 1,000)

       

      2020

       

      2019

      Taxes for current year

       

      –759

       

      –82,288

      Taxes for prior years

       

      120

       

      2,647

      Total current income tax

       

      –639

       

      –79,641

      Deferred income tax on changes in temporary differences

       

      16,002

       

      2,228

      Total deferred income tax

       

      16,002

       

      2,228

      Total income tax

       

      15,363

       

      –77,413

      Income tax can be analysed as follows:

      (CHF 1,000)

       

      2020

       

      2019

      Result before tax

       

      –84,482

       

      386,558

       

       

       

       

       

      Tax expense based on the statutory tax rate of 20.4% applicable at the parent company (2019: 20.4%)

       

      17,234

       

      –78,774

      Prior-period adjustments

       

      120

       

      2,647

      Effect of share of results of associates

       

      –82

       

      20

      Non-deductable expenses

       

      –1,029

       

      –493

      Current-year losses for which no deferred tax assets were recognised

       

      –1,939

       

      –1,377

      Effect of application of different income tax rates

       

      1,628

       

      778

      Foreign exchange differences

       

      –478

       

      –111

      Miscellaneous items

       

      –91

       

      –103

      Total income tax

       

      15,363

       

      –77,413

    • 8 Property, plant and equipment

      (CHF million)

       

      Land

       

      Engineering structures

       

      Buildings

       

      Projects in progress

       

      Movables

       

      Total

      Cost

       

       

       

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      118.7

       

      1,698.0

       

      4,377.9

       

      184.8

       

      272.9

       

      6,652.3

      Additions

       

      10.3

       

       

       

      210.4

       

      233.9

       

      0.5

       

      455.1

      Disposals

       

       

       

      –36.8

       

      –55.3

       

       

       

      –14.2

       

      –106.3

      Transfers

       

       

       

      12.1

       

      75.0

       

      –113.5

       

      18.0

       

      –8.4

      Reclassification

       

       

       

      0.0

       

      –0.3

       

       

       

      0.3

       

      0.0

      Foreign exchange differences

       

       

       

       

       

       

       

       

       

      –0.1

       

      –0.1

      Balance as at 31 December 2019

       

      129.0

       

      1,673.3

       

      4,607.7

       

      305.2

       

      277.4

       

      6,992.6

       

       

       

       

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2020

       

      129.0

       

      1,673.3

       

      4,607.7

       

      305.2

       

      277.4

       

      6,992.6

      Additions

       

      9.1

       

       

       

      0.8

       

      234.4

       

       

       

      244.3

      Disposals

       

       

       

      –2.0

       

      –27.7

       

      –10.1

       

      –13.2

       

      –53.0

      Transfers

       

       

       

      12.8

       

      100.6

       

      –139.2

       

      16.3

       

      –9.5

      Reclassification

       

       

       

       

       

      21.8

       

       

       

       

       

      21.8

      Foreign exchange differences

       

       

       

       

       

       

       

       

       

       

       

      0.0

      Balance as at 31 December 2020

       

      138.1

       

      1,684.1

       

      4,703.2

       

      390.3

       

      280.5

       

      7,196.2

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Depreciation, amortisation

       

       

       

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      0.0

       

      –898.4

       

      –2,936.5

       

      0.0

       

      –191.6

       

      –4,026.5

      Additions

       

       

       

      –59.4

       

      –140.3

       

       

       

      –16.1

       

      –215.8

      Disposals

       

       

       

      36.4

       

      54.2

       

       

       

      13.8

       

      104.4

      Reclassification

       

       

       

       

       

       

       

       

       

       

       

      0.0

      Balance as at 31 December 2019

       

      0.0

       

      –921.4

       

      –3,022.6

       

      0.0

       

      –193.9

       

      –4,137.9

       

       

       

       

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2020

       

      0.0

       

      –921.4

       

      –3,022.6

       

      0.0

       

      –193.9

       

      –4,137.9

      Additions

       

       

       

      –58.9

       

      –147.7

       

       

       

      –16.7

       

      –223.3

      Disposals

       

       

       

      1.9

       

      26.2

       

       

       

      12.8

       

      40.9

      Reclassification

       

       

       

       

       

      –21.7

       

       

       

       

       

      –21.7

      Balance as at 31 December 2020

       

      0.0

       

      –978.4

       

      –3,165.8

       

      0.0

       

      –197.8

       

      –4,342.0

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Government subsidies and grants

       

       

       

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      0.0

       

      –10.1

       

      –1.7

       

      0.0

       

      –0.4

       

      –12.2

      Additions

       

       

       

       

       

       

       

      –0.2

       

       

       

      –0.2

      Disposals

       

       

       

      0.8

       

      0.2

       

       

       

      0.2

       

      1.2

      Transfers

       

       

       

       

       

      –0.2

       

      0.2

       

       

       

      0.0

      Balance as at 31 December 2019

       

      0.0

       

      –9.3

       

      –1.7

       

      0.0

       

      –0.2

       

      –11.2

      Additions

       

       

       

       

       

       

       

      –2.2

       

       

       

      –2.2

      Disposals

       

       

       

      0.8

       

      0.2

       

       

       

      0.2

       

      1.2

      Transfers

       

       

       

       

       

      –1.9

       

      1.9

       

       

       

      0.0

      Balance as at 31 December 2020

       

      0.0

       

      –8.5

       

      –3.4

       

      –0.3

       

      0.0

       

      –12.2

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Net carrying amount as at 31 December 2019

       

      129.0

       

      742.6

       

      1,583.4

       

      305.2

       

      83.3

       

      2,843.5

      Net carrying amount as at 31 December 2020

       

      138.1

       

      697.2

       

      1,534.0

       

      390.0

       

      82.7

       

      2,842.0

      Projects in progress

      In the past financial year, Flughafen Zürich AG invested CHF 234.4 million in projects in progress (2019: CHF 233.9 million). The biggest items comprise the following projects:

      • Expansion and refurbishment of the baggage sorting system (CHF 67.7 million)
      • Expansion of the landside passenger zones (CHF 22.7 million)
      • Renovation of the maintenance workshop (CHF 17.2 million)

      Depreciation

      Depreciation of property, plant and equipment totalling CHF –223.3 million was offset against government grants and subsidies recognised in the income statement in the amount of CHF 1.2 million.

      Impairment

      Due to the coronavirus pandemic and the related indicators that items of property, plant and equipment may be impaired, Flughafen Zürich AG performed an impairment test (see II. Judgements and significant estimates and assumptions in the application of accounting policies, Impairment of assets in accordance with IAS 36).

    • 9 Right-of-use assets

      FLUGHAFEN ZÜRICH AG AS LESSEE

      (CHF 1,000)

       

      Technical installations

       

      Real estate

       

      Total right-of-use assets

      Cost

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      21,755

       

      41,894

       

      63,649

      Additions

       

      0

       

      45,403

       

      45,403

      Balance as at 31 December 2019

       

      21,755

       

      87,297

       

      109,052

       

       

       

       

       

       

       

      Balance as at 1 January 2020

       

      21,755

       

      87,297

       

      109,052

      Additions

       

      0

       

      5,571

       

      5,571

      Reclassification

       

      –21,755

       

      0

       

      –21,755

      Balance as at 31 December 2020

       

      0

       

      92,868

       

      92,868

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Depreciation, amortisation

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      –19,396

       

      0

       

      –19,396

      Additions

       

      –1,423

       

      –4,839

       

      –6,262

      Balance as at 31 December 2019

       

      –20,819

       

      –4,839

       

      –25,658

       

       

       

       

       

       

       

      Balance as at 1 January 2020

       

      –20,819

       

      –4,839

       

      –25,658

      Additions

       

      –831

       

      –7,334

       

      –8,165

      Reclassification

       

      21,650

       

      0

       

      21,650

      Balance as at 31 December 2020

       

      0

       

      –12,173

       

      –12,173

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Net carrying amount as at 31 December 2019

       

      936

       

      82,458

       

      83,394

      Net carrying amount as at 31 December 2020

       

      0

       

      80,695

       

      80,695

      technical installations

      In December 2001, Flughafen Zürich AG entered into a framework lease contract to finance the aircraft energy supply system (ESS), which expired on 31 July 2020. At that date, the ESS was purchased at its residual value of CHF 0.1 million and transferred to the engineering structures category of assets (see note 8, Property, plant and equipment).

      real estate

      Flughafen Zürich AG has a right-of-use asset entitling it to use space in a building that is located on Flughafen Zürich AGʼs land and was constructed under a granted building right from 2005. Although its right to use the space ends on 31 January 2080, Flughafen Zürich AG has termination options, which have been taken into account. Had the termination options not been taken into account, additional liabilities with a nominal value of CHF 91.2 million would arise in addition to the lease liabilities recognised as at 31 December 2020.

      In financial year 2020, following the completion of the real estate project the Circle, Flughafen Zürich AG moved into new office premises for which the company signed a 20-year lease with the co-ownership structure the Circle. The lease ends in October 2039 with an option to extend.

      Flughafen Zürich AG leases space that is subleased as car parking space. The average period of use is five years.

      The following table shows the carrying amounts of the lease liabilities and the changes during the reporting period:

      (CHF 1,000)

       

      2020

       

      2019

      Balance as at 1 January

       

      –84,582

       

      –44,904

      Additions

       

      –5,571

       

      –45,403

      Payments

       

      6,887

       

      5,797

      Present value adjustment

       

      –12

       

      –72

      Balance as at 31 December

       

      –83,278

       

      –84,582

      of which current (payment within 1 year)

       

      –7,463

       

      –6,163

      of which non-current (payment from 1 year on)

       

      –75,815

       

      –78,419

      A detailed overview of the maturities of the lease liabilities can be found in note 18, Financial liabilities.

      In the reporting period, the following amounts were recognised in profit or loss in connection with leases:

      (CHF 1,000)

       

      2020

       

      2019

      Depreciation charges for right-of-use assets

       

      –8,165

       

      –6,262

      Interest expense on lease liabilities

       

      –12

       

      –72

      Expense relating to short-term leases

       

      –64

       

      –1,111

      Total amount recognised for leases in profit or loss

       

      –8,241

       

      –7,445

      The total cash outflow for leases amounted to CHF 8.2 million in the reporting period (2019: CHF 6.9 million). Future cash outflows for leases not yet commenced as at the reporting date amount to CHF 17.6 million.

      FLUGHAFEN ZÜRICH AG AS LESSOR

      The tenancy agreements entered into by Flughafen Zürich AG as lessor may be either fixed tenancy or turnover-based agreements:

      COMMERCIAL LEASES

      Commercial leases consist primarily of leases of commercial space. These agreements between the parties generally comprise guaranteed basic rents plus turnover-based portions with a fixed term of five years and no other options. Moreover, some agreements involving basic rents and turnover-based portions exist as a function of passenger trends or prior-year sales.

      FIXED TENANCY AGREEMENTS

      Fixed tenancy agreements comprise in particular agreements for office, warehouse, archive and workshop premises. They are divided into limited-term and indefinite agreements, with the latter usually being subject to either six or twelve monthsʼ notice to be communicated in advance.

      Commercial revenue (retail, tax & duty free plus food & beverage) and revenue from facility management (rental and leasing agreements) contained conditional rental payments amounting to CHF 3.1 million in the reporting period (2019: CHF 14.2 million); see also note 2, Revenue.

      At the reporting date, minimum lease payments (fixed rents and guaranteed basic rents) under non-cancellable leases were as follows:

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Due date up to 1 year

       

      213,122

       

      229,706

      Due date from 1 to 5 years

       

      801,256

       

      774,776

      Dute date in more than 5 years

       

      308,083

       

      368,050

      Total

       

      1,322,461

       

      1,372,532

    • 10 Investment property

      (CHF 1,000)

       

      Land

       

      Project costs

       

      Buildings and engineering structures plus movables

       

      Total investment property

      Cost

       

       

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      950

       

      305,984

       

      712

       

      307,646

      Additions

       

      0

       

      125,823

       

      0

       

      125,823

      Balance as at 31 December 2019

       

      950

       

      431,807

       

      712

       

      433,469

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2020

       

      950

       

      431,807

       

      712

       

      433,469

      Additions

       

      0

       

      138,961

       

      0

       

      138,961

      Transfer

       

      0

       

      –394,536

       

      394,536

       

      0

      Balance as at 31 December 2020

       

      950

       

      176,232

       

      395,248

       

      572,430

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Depreciation, amortisation

       

       

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      0

       

      0

       

      –592

       

      –592

      Additions

       

      0

       

      0

       

      –120

       

      –120

      Balance as at 31 December 2019

       

      0

       

      0

       

      –712

       

      –712

       

       

       

       

       

       

       

       

       

      Balance as at 1 January 2020

       

      0

       

      0

       

      –712

       

      –712

      Additions

       

      0

       

      0

       

      –4,776

       

      –4,776

      Balance as at 31 December 2020

       

      0

       

      0

       

      –5,488

       

      –5,488

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Net carrying amount as at 31 December 2019

       

      950

       

      431,807

       

      0

       

      432,757

      Net carrying amount as at 31 December 2020

       

      950

       

      176,232

       

      389,760

       

      566,942

      THE CIRCLE project

      On 5 February 2015, Flughafen Zürich AG and Swiss Life AG notarised the purchase agreement for the share of land for the Circle and registered it for entry in the Land Register, thereby establishing the co-ownership structure between the two parties provided for in the financing agreements, in which Flughafen Zürich AG has a 51% interest and Swiss Life AG a 49% interest.

      Based on the nature of the contractual arrangement, the co-ownership structure the Circle is classified as a joint operation in accordance with IFRS 11. The share of the rights to the assets and the share of the obligations for the liabilities of the co-ownership structure are therefore recognised and presented in the relevant line items in the consolidated financial statements of Flughafen Zürich AG.

      The share of the property is classified as investment property in accordance with IAS 40. In this context, Flughafen Zürich AG has decided to apply the cost model.

      The Circle was opened in November 2020 even though not all of the construction work had been completed. The share of the project costs is billed and allocated to the relevant categories of investment property at the date when the space is handed over to the lessees. The assets are then depreciated over their useful lives.

      The share of the fair value of the Circle was CHF 707.9 million at the reporting date (2019: CHF 530.9 million). The value was determined by an external expert using the discounted cash flow method (level 3) and taking into account the highest and best use. Under this method, the fair value is determined on the basis of the total expected future net income (before tax, interest payments, depreciation and amortisation) discounted to the present date. A risk-adjusted discount rate is set depending on the risks and rewards and in line with market rates.

    • 11 Intangible assets

      (CHF 1,000)

       

      Investments in airport operator projects

       

      Intangible asset from right of formal expropriation

       

      Other intangible assets

      Cost

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      130,475

       

      154,029

       

      92,377

      Additions

       

      242,449

       

      0

       

      721

      Disposals

       

      –211

       

      –20,000

       

      –5,580

      Transfer

       

      –572

       

      0

       

      8,926

      Reclassification

       

      2,035

       

      0

       

      –2,035

      Foreign exchange differences

       

      –20,417

       

      0

       

      –295

      Balance as at 31 December 2019

       

      353,759

       

      134,029

       

      94,114

       

       

       

       

       

       

       

      Balance as at 1 January 2020

       

      353,759

       

      134,029

       

      94,114

      Additions

       

      30,245

       

      0

       

      0

      Disposals

       

      0

       

      0

       

      –22,288

      Transfer

       

      0

       

      0

       

      9,556

      Reclassification

       

      4,326

       

      0

       

      –4,326

      Foreign exchange differences

       

      –88,771

       

      0

       

      0

      Balance as at 31 December 2020

       

      299,559

       

      134,029

       

      77,056

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Depreciation, amortisation

       

       

       

       

       

       

      Balance as at 1 January 2019

       

      –4,843

       

      –60,292

       

      –74,492

      Additions

       

      –7,808

       

      –2,892

       

      –6,935

      Disposals

       

      0

       

      0

       

      5,252

      Reclassification

       

      –486

       

      0

       

      486

      Foreign exchange differences

       

      2,668

       

      0

       

      108

      Balance as at 31 December 2019

       

      –10,469

       

      –63,184

       

      –75,581

       

       

       

       

       

       

       

      Balance as at 1 January 2020

       

      –10,469

       

      –63,184

       

      –75,581

      Additions

       

      –7,733

       

      –2,255

       

      –7,594

      Disposals

       

      0

       

      0

       

      21,867

      Reclassification

       

      –1,618

       

      0

       

      1,618

      Foreign exchange differences

       

      2,397

       

      0

       

      0

      Balance as at 31 December 2020

       

      –17,423

       

      –65,439

       

      –59,690

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Net carrying amount as at 31 December 2019

       

      343,290

       

      70,845

       

      18,533

      Net carrying amount as at 31 December 2020

       

      282,136

       

      68,590

       

      17,366

      INVESTMENTS IN AIRPORT OPERATOR PROJECTS

      The investments in airport operator projects in the amount of CHF 282.1 million (2019: CHF 343.3 million) consist of concession rights which, due to the application of IFRIC 12, comprise minimum concession payments recognised as assets and investments made. They relate to the expansion and operation of the Chilean airports in Antofagasta and Iquique (CHF 56.2 million; 2019: CHF 34.3 million), the expansion and operation of the Brazilian airport in Florianópolis (CHF 128.9 million; 2019: CHF 178.3 million), the expansion and operation of the Brazilian airports in Vitória and Macaé (CHF 92.4 million; 2019: CHF 130.7) and initial investments for the concession relating to Noida International Airport (India) (CHF 4.6 million; 2019: CHF 0.0 million). The decrease in investments relating to the Brazilian concessions is due to unfavourable movements in the exchange rate of the relevant currency.

      The obligations of CHF 23.2 million (2019: CHF 26.3 million) relating to the relevant concessions have been recognised as current and non-current liabilities (see note 18, Financial liabilities).

      INTANGIBLE ASSET FROM RIGHT OF FORMAL EXPROPRIATION

      With the award of the operating licence, Flughafen Zürich AG was also granted a right of formal expropriation in respect of property owners exposed to aircraft noise. This right of formal expropriation was granted on condition that the airport operator bears the costs associated with compensation payments and is recognised as an intangible asset at the date when the probable total cost can be estimated based on final-instance court rulings, so that the cost can be reliably estimated in accordance with IAS 38.21.

      On 22 November 2019, the Swiss Federal Supreme Court handed down a ruling in test cases regarding the period of limitation on claims for compensation in Oberglatt. This Swiss Federal Supreme Court ruling and other fundamental issues that have been decided enabled Flughafen Zürich AG to undertake a reappraisal of the outstanding cost of compensation for formal expropriations. Based on the recalculation, the total cost expected in relation to formal expropriations decreased from CHF 350.0 million to CHF 330.0 million, enabling the provision for formal expropriations to be reduced by CHF 20.0 million as at 31 December 2019 (see note 19, Provision for formal expropriations plus sound insulation and resident protection). At the same time, the intangible asset from the right of formal expropriation was reduced by the same amount.

      As at 31 December 2020, Flughafen Zürich AG has therefore recognised an intangible asset from the right of formal expropriation in the amount of CHF 68.6 million (2019: CHF 70.8 million). This is amortised using the straight-line method over the remaining term of the operating licence (i.e. until May 2051).

      Impairment

      Due to the coronavirus pandemic and the related indicators that investments in airport operator projects may be impaired, Flughafen Zürich AG performed an impairment test (see II. Judgements and significant estimates and assumptions in the application of accounting policies, Impairment of assets in accordance with IAS 36).

    • 12 Investments in associates

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Sociedade de Participação no Aeroporto de Confins S.A., Belo Horizonte (Brazil)

       

       

       

       

      Share capital: BRL 474 million (previous year BRL 474 million)/Equity share 25.0% (previous year 25.0%)

       

      3,734

       

      9,270

      Administradora Unique IDC C.A., Porlamar (Venezuela)

       

       

       

       

      Share capital: VEB 25 million (previous year VEB 25 million)/Equity share 49.5% (previous year 49.5 %)

       

      0

       

      0

      Aeropuertos Asociados de Venezuela C.A., Porlamar (Venezuela)

       

       

       

       

      Share capital: VEB 10 million (previous year VEB 10 million)/Equity share 49.5% (previous year 49.5 %)

       

      0

       

      0

      Total investments in associates

       

      3,734

       

      9,270

      Brazil

      Alongside Brazilian company CCR, Flughafen Zürich AG holds a 25% interest in Sociedade de Participação no Aeroporto de Confins S.A., a private consortium which in turn controls 51% of the local airport operator Concessionária no Aeroporto Internacional de Confins S.A. The remaining 49% of the shares are held by the state-owned Infraero. As a consequence, Flughafen Zürich AG and CCR have since 2014 been responsible for the operation and expansion of the international airport in Belo Horizonte in the Brazilian state of Minas Gerais. The concession agreement is for 30 years and prescribes certain infrastructure expansion. After just 14 monthsʼ construction time, a new terminal was put into operation in 2016. There is an Operations, Management & Service Agreement (OMSA) with the licence holder. The company receives revenue from this service agreement. Flughafen Zürich AG appoints the flight operations manager.

      Venezuela

      In 2010, Flughafen Zürich AG and its consortium partner Unique IDC turned to the International Centre for Settlement of Investment Disputes (ICSID) in Washington D.C. in the matter of the airport expropriated in Venezuela (Isla de Margarita). This step is in compliance with the investment protection treaty between Venezuela, Switzerland and Chile. The ICSID reached its decision in November 2014, requiring the Bolivarian Republic of Venezuela to reimburse the consortium the costs incurred for the proceedings and project plus a compensation payment of around USD 19.5 million as well as interest incurred up until receipt of payment. Flughafen Zürich AG is entitled to 50% of this. After an application for annulment was rejected, the tribunalʼs decision is definitive and final. The value of this holding has been fully impaired.

      Additional disclosures

      The following table contains the summarised financial information for the associate Sociedade de Participação no Aeroporto de Confins S.A. The amounts correspond to those in the associateʼs financial statements prepared in accordance with IFRSs.

      SOCIEDADE DE PARTICIPAÇÃO NO AEROPORTO DE CONFINS S. A.

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Revenue

       

      55,990

       

      95,922

      Loss

       

      –24,308

       

      –10,193

      Comprehensive income

       

      –24,308

       

      –10,193

       

       

       

       

       

      Non-current assets

       

      369,364

       

      565,553

      Current assets

       

      26,988

       

      27,479

      Non-current liabilities

       

      –343,655

       

      –479,506

      Current liabilities

       

      –23,453

       

      –40,898

      Equity attributable to non-controlling interests

       

      –14,309

       

      –35,548

       

       

       

       

       

      Net equity

       

      14,935

       

      37,080

      Equity share

       

      25.0% 

       

      25.0% 

       

       

       

       

       

      Carrying amount of interest in associate

       

      3,734

       

      9,270

    • 13 FINANCIAL ASSETS OF THE AIRPORT OF ZURICH NOISE FUND

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Current financial assets of Airport of Zurich Noise Fund

       

      48,449

       

      17,376

      Non-current financial assets of Airport of Zurich Noise Fund

       

      370,644

       

      394,428

      Total financial assets of Airport of Zurich Noise Fund

       

      419,093

       

      411,804

      The financial assets of the Airport of Zurich Noise Fund consist mostly of CHF-denominated bonds and a mixed investment fund. The investment horizon is based on the expected obligation to make payments from the Airport of Zurich Noise Fund and averages around four years. In 2020, interest on bonds was unchanged year on year at between 0.00% and 2.625%. The funds are managed by professional financial institutions (see note 6, Finance result, and note 24.1 a) Financial risk management, i) Credit risk).

    • 14 Trade receivables

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Trade receivables, gross 1)

       

      73,059

       

      112,805

      Allowance for expected credit loss

       

      –1,280

       

      –616

      Trade receivables, net

       

      71,779

       

      112,189

      1) Trade receivables include an amount of CHF 7.2 million due from Swiss (2019: CHF 18.8 million). In the period between the reporting date and the preparation of the 2020 annual report, Swiss paid the outstanding amount arising from flight operations charges as at 31 December 2020 in full, with the exception of the air traffic control charges for which it was granted an extension of the period for payment until some time in the course of the financial year 2021 in light of the coronavirus crisis.

      Geographical distribution of trade receivables:

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Switzerland

       

      31,488

       

      50,513

      Europe

       

      1,921

       

      4,356

      Other

       

      1,846

       

      809

      Total aviation

       

      35,255

       

      55,678

      Switzerland

       

      31,557

       

      52,545

      Europe

       

      52

       

      110

      Latin America

       

      5,999

       

      4,377

      Other

       

      196

       

      95

      Total non-aviation

       

      37,804

       

      57,127

      Total trade receivables, gross

       

      73,059

       

      112,805

      Expected credit losses on trade receivables are as follows for the reporting period and the previous year:

      (CHF 1,000)

       

       

       

       

       

       

       

       

       

      31.12.2020

       

       

      Not past due

       

      Past due, 0 to 30 days

       

      Past due, 31 to 60 days

       

      Past due, more than 60 days

       

      Total

      Expected credit loss rate (in %)

       

      0.3

       

      1.5

       

      3.0

       

      5.0

       

       

      Trade receivables, gross

       

      48,804

       

      2,395

       

      1,541

       

      20,319

       

      73,059

      Expected credit loss

       

      –170

       

      –37

       

      –47

       

      –1,026

       

      –1,280

      (CHF 1,000)

       

       

       

       

       

       

       

       

       

      31.12.2019

       

       

      Not past due

       

      Past due, 0 to 30 days

       

      Past due, 31 to 60 days

       

      Past due, more than 60 days

       

      Total

      Expected credit loss rate (in %)

       

      0.3

       

      1.5

       

      3.0

       

      5.0

       

       

      Trade receivables, gross

       

      94,505

       

      14,754

       

      1,499

       

      2,047

       

      112,805

      Expected credit loss

       

      –247

       

      –221

       

      –46

       

      –102

       

      –616

      In almost all cases, receivables not past due concern long-standing client relationships. Based on past experience, Flughafen Zürich AG does not expect any additional credit losses.

    • 15 Other receivables and prepaid expenses

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Prepaid expenses and accruals

       

      72,794

       

      21,388

      Accrued interest on interest-bearing debt instruments Airport of Zurich Noise Fund

       

      363

       

      406

      Prepaid services

       

      26,926

       

      24,888

      Tax receivables (VAT and withholding tax)

       

      43,441

       

      25,655

      Other receivables

       

      2,438

       

      1,281

      Total other receivables and prepaid expenses

       

      145,962

       

      73,618

      of which financial instruments

       

      73,157

       

      21,794

      of which other receivables and prepaid expenses

       

      72,805

       

      51,824

      As at the reporting date, “Prepaid expenses and accruals” contained accruals for rent concessions in the amount of CHF 26.3 million (2019: CHF 0.0 million) (see also note 2, Revenue).

      The interest from the liquid funds of the Airport of Zurich Noise Fund that were invested separately (see also note 13, Financial assets of the Airport of Zurich Noise Fund and note 20, Airport of Zurich Noise Fund) was recognised on an accrual basis.

      All services provided in the reporting period were invoiced between the reporting date and the preparation of the annual report. There are no past due receivables reported in the above items that would require the recognition of an allowance.

    • 16 Cash and cash equivalents and fixed-term deposits

       

       

      31.12.2020

       

      31.12.2019

      (CHF 1,000)

       

      Total

       

      of which AZNF

       

      Total

       

      of which AZNF

      Cash on hand

       

      205

       

      0

       

      120

       

      0

      Cash at banks and in postal accounts

       

      245,090

       

      3,943

       

      115,845

       

      18,092

      Fixed-term deposits 1)

       

      105,919

       

      0

       

      16,463

       

      0

      Total cash and cash equivalents

       

      351,214

       

      3,943

       

      132,428

       

      18,092

       

       

       

       

       

       

       

       

       

      Current fixed-term deposits 2)

       

      200,000

       

      0

       

      37,500

       

      0

      Non-current fixed-term deposits 2)

       

      821

       

      0

       

      636

       

      0

      Total fixed-term deposits

       

      200,821

       

      0

       

      38,136

       

      0

      1) Due within 90 days from date of acquisition.

      2) Due after 90 days from date of acquisition.

    • 17 Equity and reserves

      (Number of shares)

       

      Issued registered shares (nominal value, CHF 10)

       

      Treasury shares

       

      Total shares in circulation

      Balance as at 1 January 2019

       

      30,701,875

       

      1,655

       

      30,700,220

      Purchase of treasury shares

       

       

       

      8,290

       

      –8,290

      Distribution of treasury shares to employees and third parties

       

       

       

      –6,812

       

      6,812

      Balance as at 31 December 2019

       

      30,701,875

       

      3,133

       

      30,698,742

      Purchase of treasury shares

       

       

       

      9,568

       

      –9,568

      Distribution of treasury shares to employees and third parties

       

       

       

      –8,650

       

      8,650

      Balance as at 31 December 2020

       

      30,701,875

       

      4,051

       

      30,697,824

      SHARE RIGHTS

      The holders of registered shares are entitled to participate at the General Meeting of Shareholders and cast one vote per share.

      Treasury shares

      Treasury shares are distributed to employees and third parties under the bonus programme; see note 3, Personnel expenses, and note 24.4, Related parties. Treasury shares are used for the bonus programme and are held as treasury stock.

      Translation reserve

      The translation reserve comprises foreign currency differences arising from the translation of the financial statements of foreign operations and investments in associates.

      Earnings per share

      Basic and diluted earnings per share are calculated from the results and share data as at 31 December, which are composed as follows:

       

       

      2020

       

      2019

      Result attributable to shareholders of Flughafen Zürich AG in CHF

       

      –69,133,285

       

      309,135,090

      Weighted average number of outstanding shares

       

      30,697,891

       

      30,690,962

      Effect of dilutive shares

       

      4,610

       

      7,808

      Adjusted weighted average number of outstanding shares

       

      30,702,501

       

      30,698,770

      Basic earnings per share (CHF)

       

      –2.25

       

      10.07

      Diluted earnings per share (CHF)

       

      –2.25

       

      10.07

      Dividend distribution limit

      The amount available for payment as a dividend is based on the available retained earnings of Flughafen Zürich AG and is determined in accordance with the provisions of the Swiss Code of Obligations (CO). As at the reporting date, reserves amounting to CHF 154.0 million (2019: CHF 154.1 million) were subject to a restriction on distribution under the provisions of commercial law.

      Owing to the widespread impact of COVID-19 and to safeguard liquidity, it was decided not to pay a dividend for the 2019 financial year. A proposal will be made to the General Meeting of Shareholders to waive payment of a dividend for the current year too.

      Major shareholders and shareholder structure

      The shareholder structure as at 31 December was as follows:

       

       

      2020

       

      2019

      Public sector

       

      38.60% 

       

      38.60% 

      Private individuals

       

      7.68% 

       

      6.90% 

      Companies

       

      3.85% 

       

      5.30% 

      Pension funds

       

      1.51% 

       

      2.30% 

      Financial institutions (including nominees)

       

      19.04% 

       

      22.00% 

      Balance available and non-registered shareholders

       

      29.32% 

       

      24.90% 

      Total

       

      100.00% 

       

      100.00% 

       

       

       

       

       

      Number of shareholders

       

      15,477

       

      13,922

      As at the reporting date, the following shareholders or groups of shareholders held at least 5% of the voting rights:

       

       

      2020

       

      2019

      Canton of Zurich

       

      33.33% 

       

      33.33% 

      City of Zurich

       

      5.00% 

       

      5.00% 

    • 18 Financial liabilities

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Non-current debentures

       

      1,648,536

       

      750,416

      Non-current liabilities to banks

       

      109,887

       

      105,277

      Non-current lease liabilities

       

      75,815

       

      78,419

      Non-current liabilities from concession agreements

       

      21,664

       

      25,256

      Other non-current financial liabilities

       

      20,400

       

      0

      Non-current financial liabilities

       

      1,876,302

       

      959,368

       

       

       

       

       

      Current debentures

       

      0

       

      299,938

      Current liabilities to banks

       

      64,025

       

      2,458

      Current lease liabilities

       

      7,463

       

      6,163

      Current liabilities from concession agreements

       

      1,535

       

      1,068

      Other current financial liabilities

       

      2,117

       

      41,925

      Current financial liabilities

       

      75,140

       

      351,552

       

       

       

       

       

      Total financial liabilities

       

      1,951,442

       

      1,310,920

      At the end of February 2020, before the outbreak of the pandemic in Europe, Flughafen Zürich AG was able to raise funds by placing a 15-year CHF 400 million debenture (coupon of 0.2%) on the Swiss capital market. This was followed in May 2020 by a further placement, of a four-year CHF 300 million debenture (coupon of 0.7%), partly in order to refinance the CHF 300 million debenture falling due in July 2020. The favourable market environment in December 2020 allowed the company to place a further debenture, in the amount of CHF 200 million (coupon 0.1%) for seven years, in order to build up additional liquidity reserves.

      Current liabilities to banks include a fixed advance of CHF 60 million under the operating credit facilities. It is planned to repay this in full by the end of March 2021.

      Composition of non-current financial liabilities as at the reporting date:

       

       

      as at 31.12.2020

       

      as at 31.12.2020

       

       

       

       

       

       

       

       

      Financial liabilities

       

      Nominal value

       

      Carrying amount

       

      Duration

       

      Interest rate

       

      Early amortisation

       

      Interest payment date

       

       

      (CHF 1,000)

       

      (CHF 1,000)

       

       

       

       

       

       

       

       

      Debenture (2023)

       

      400,000

       

      399,887

       

      2013 – 2023

       

      1.500% 

       

      no

       

      17.4.

      Debenture (2024)

       

      300,000

       

      299,198

       

      2020 – 2024

       

      0.700% 

       

      no

       

      22.5.

      Debenture (2027)

       

      200,000

       

      199,526

       

      2020 – 2027

       

      0.100% 

       

      no

       

      30.12.

      Debenture (2029)

       

      350,000

       

      350,517

       

      2017 – 2029

       

      0.625% 

       

      no

       

      24.5.

      Debenture (2035)

       

      400,000

       

      399,408

       

      2020 – 2035

       

      0.200% 

       

      no

       

      26.2.

      Non-current liabilities to banks

       

      118,226

       

      109,887

       

      n/a

       

      n/a

       

      yes

       

      n/a

      Non-current lease liabilities

       

      75,815

       

      75,815

       

      until 2039

       

      0.000% 

       

      no

       

      n/a

      Non-current liabilities from concession agreements

       

      22,573

       

      21,664

       

      until 2047

       

      n/a

       

      no

       

      n/a

      Other non-current financial liabilities

       

      20,400

       

      20,400

       

      until 2035

       

      0.000% 

       

      no

       

      n/a

      Total non-current financial liabilities

       

       

       

      1,876,302

       

       

       

       

       

       

       

       

      External financing is subject to standard guarantees and covenants, which were complied with as at the reporting date.

      In addition, unused credit facilities at the reporting date amounted to a total of CHF 87.9 million (see note 24.1 a) Financial risk management, ii) Liquidity risk).

      The maturities of financial liabilities are shown in the table below:

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Due within 1 year

       

      75,140

       

      351,552

      Due between 1 and 5 years

       

      764,617

       

      468,852

      Due in more than 5 years

       

      1,111,685

       

      490,516

      Total financial liabilities

       

      1,951,442

       

      1,310,920

      Financial liabilities changed as follows as a result of cash and non-cash changes:

       

       

      31.12.2019

       

      Cash flows (+)

       

      Cash flows (–)

       

      Non-cash changes

       

      31.12.2020

      (CHF 1,000)

       

       

       

       

      Increase(+)/decrease(–)

       

      Foreign exchange movements

       

      Value changes

       

      Debentures

       

      750,416

       

      900,000

       

      –1,936

       

      0

       

      0

       

      56

       

      1,648,536

      Non-current liabilities to banks

       

      105,277

       

      28,722

       

      0

       

      1,611

       

      –25,928

       

      205

       

      109,887

      Non-current lease liabilities

       

      78,419

       

      0

       

      0

       

      –2,604

       

      0

       

      0

       

      75,815

      Non-current liabilities from concession agreements

       

      25,256

       

      0

       

      0

       

      2,374

       

      –5,685

       

      –281

       

      21,664

      Other non-current financial liabilities

       

      0

       

      20,400

       

      0

       

      0

       

      0

       

      0

       

      20,400

      Non-current financial liabilities

       

      959,368

       

      949,122

       

      –1,936

       

      1,381

       

      –31,613

       

      –20

       

      1,876,302

      Debentures

       

      299,938

       

      0

       

      –300,000

       

      0

       

      0

       

      62

       

      0

      Current liabilities to banks

       

      2,458

       

      141,467

       

      –82,523

       

      2,819

       

      –199

       

      3

       

      64,025

      Current lease liabilities

       

      6,163

       

      0

       

      –6,779

       

      8,079

       

      0

       

      0

       

      7,463

      Current liabilities from concession agreements

       

      1,068

       

      0

       

      0

       

      911

       

      –17

       

      –427

       

      1,535

      Other current financial liabilities

       

      41,925

       

      0

       

      –40,000

       

      821

       

      –629

       

      0

       

      2,117

      Current financial liabilities

       

      351,552

       

      141,467

       

      –429,302

       

      12,630

       

      –845

       

      –362

       

      75,140

      Total financial liabilities

       

      1,310,920

       

      1,090,589

       

      –431,238

       

      14,011

       

      –32,458

       

      –382

       

      1,951,442

      Overview of lease liabilities

      The lease liabilities shown below include the leases listed in note 9, Right-of-use assets. The interest rate on the future lease liabilities is 0.0%. The interest rate for the ESS lease, which expired on 31 July 2020, was 3.476%.

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Future minimum lease payments

       

       

       

       

      Due within 1 year

       

      7,463

       

      6,175

      Due between 1 and 5 years

       

      28,344

       

      25,271

      Due in more than 5 years

       

      47,471

       

      53,148

      Total future minimum lease payments

       

      83,278

       

      84,594

       

       

       

       

       

      Future interest payments

       

      0

       

      –12

       

       

       

       

       

      Present value of lease liabilities

       

      83,278

       

      84,582

      Due within 1 year

       

      7,463

       

      6,163

      Due between 1 and 5 years

       

      28,344

       

      25,271

      Due in more than 5 years

       

      47,471

       

      53,148

    • 19 PROVISION FOR FORMAL EXPROPRIATIONS PLUS SOUND INSULATION AND RESIDENT PROTECTION

      (CHF 1,000)

       

      Formal expropriations

       

      Sound insulation and resident protection

       

      Total

      Balance as at 1 January 2019

       

      275,183

       

      148,170

       

      423,353

      Provision used 1)

       

      –9,771

       

      –11,498

       

      –21,269

      Release of provision

       

      –20,000

       

      0

       

      –20,000

      Present value adjustment 2)

       

      2,667

       

      2,756

       

      5,423

      Balance as at 31 December 2019

       

      248,079

       

      139,428

       

      387,507

      of which current (planned payment within 1 year)

       

      12,981

       

      14,502

       

      27,483

      of which non-current (planned payment from 1 year on)

       

      235,098

       

      124,926

       

      360,024

       

       

       

       

       

       

       

      Balance as at 1 January 2020

       

      248,079

       

      139,428

       

      387,507

      Provision used 1)

       

      –2,629

       

      –14,263

       

      –16,892

      Release of provision

       

      0

       

      0

       

      0

      Present value adjustment 2)

       

      0

       

      0

       

      0

      Balance as at 31 December 2020

       

      245,450

       

      125,165

       

      370,615

      of which current (planned payment within 1 year)

       

      17,900

       

      14,239

       

      32,139

      of which non-current (planned payment from 1 year on)

       

      227,550

       

      110,926

       

      338,476

      1) The amount paid for formal expropriations only includes effective payments of compensation, and excludes other associated external costs in accordance with the regulations of the Airport of Zurich Noise Fund (see note 20, Airport of Zurich Noise Fund).

      2) In the year under review as well as in the previous year, a reassessment was made of the discount rates and the expected cash outflows.

      Provision for formal expropriations

      On 22 November 2019, the Swiss Federal Supreme Court handed down a ruling in test cases regarding the period of limitation on claims for compensation in Oberglatt. This Swiss Federal Supreme Court ruling and other fundamental issues that have been decided enabled Flughafen Zürich AG to undertake a reappraisal of the outstanding cost of compensation for formal expropriations. Based on the recalculation, the total cost expected in relation to formal expropriations decreased from CHF 350.0 million to CHF 330.0 million, enabling the provision for formal expropriations to be reduced by CHF 20.0 million as at 31 December 2019. At the same time, the intangible asset from the right of formal expropriation was reduced by the same amount (see note 11, Intangible assets).

      As at the reporting date, the estimated costs for formal expropriations remained unchanged at CHF 330.0 million, of which CHF 84.5 million had already been paid out at that date. In the consolidated financial statements for the period ended 31 December 2020, a provision was recognised at present value for the outstanding costs of CHF 245.5 million (nominal amount). As the interest rate used to adjust the present value of the nominal payment flows remained unchanged at 0.00% at the reporting date due to the low level of interest rates, the present value is the nominal amount. It is expected that the payments can be completed by the end of 2030.

      Provision for sound insulation and resident protection

      The company is also required to implement sound insulation measures in the area where it claims exemptions from noise limits (emission limit). In this context, the FOCA initiated a night-time noise abatement procedure. The area with exemptions under the Sectoral Aviation Infrastructure Plan adopted by the Federal Council on 23 August 2017 was extended. In this context, Flughafen Zürich AG recognised a provision for further costs of CHF 60.0 million in addition to the cost of CHF 340.0 million previously estimated for sound insulation and resident protection.

      As at the reporting date, the estimated costs for sound insulation and resident protection measures remained unchanged at CHF 400.0 million, of which CHF 274.8 million had already been paid out at that date. In the consolidated financial statements for the period ended 31 December 2020, a provision was recognised at present value for the outstanding costs of CHF 125.2 million (nominal amount). As the interest rate used to adjust the present value of the nominal payment flows remained unchanged at 0.00% at the reporting date due to the low level of interest rates, the present value is the nominal amount. It is expected that the payments can be completed by the end of 2030.

    • 20 Airport of Zurich Noise Fund

      Flughafen Zürich AG refinances all costs relating to aircraft noise through special noise charges based on the “costs-by-cause” principle. In the interest of transparency, costs and income relating to aircraft noise are recognised in a special statement for the Airport of Zurich Noise Fund. This is a liquidity-based fund statement. The fund statement presents the accumulated surplus or shortfall as at the reporting date arising from noise charges, less expenses for formal expropriations, sound insulation and resident protection measures, and noise-related operating costs. Its presentation is independent of the accounting policies. The key figures from the fund statement are shown in the table below.

      If the fund statement shows an accumulated income surplus, this surplus is moved to a special investment account and invested by professional financial institutions, partly on the basis of a conservative, money market-oriented investment strategy and partly in a mixed investment fund. The income from these investments is credited to the fund statement.

      The detailed fund statement is disclosed to a committee comprising representatives of Zurich Airport customers and the relevant authorities. The regulations of the Airport of Zurich Noise Fund and other information (including an overview of its financial performance) can be downloaded from the website.

      The balance on the Airport of Zurich Noise Fund changed as follows in the reporting period:

      (CHF 1,000)

       

      2020

       

      2019

      Airport of Zurich Noise Fund as at 1 January

       

      422,882

       

      425,405

      Revenue from noise charges

       

      5,701

       

      12,733

      Costs for sound insulation and resident protection

       

      –14,263

       

      –11,498

      Costs for formal expropriations 1)

       

      –3,349

       

      –10,130

      Balance before operating costs and finance result

       

      410,971

       

      416,510

      Operating costs

       

      –3,392

       

      –3,469

      Interest income from and adjustments to fair value on financial assets of Airport of Zurich Noise Fund

       

      2,269

       

      9,841

      Airport of Zurich Noise Fund as at 31 December

       

      409,848

       

      422,882

      1) In addition to compensation payments for formal expropriations, this amount includes other associated external costs (in accordance with regulations of the Airport of Zurich Noise Fund; see note 19, “Provision for formal expropriations plus sound insulation and resident protection”).

      Summary of assets invested for the Airport of Zurich Noise Fund:

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Cash equivalents (see note 16, "Cash and cash equivalents")

       

      3,943

       

      18,092

      Current financial assets of Airport of Zurich Noise Fund

       

      48,449

       

      17,376

      Non-current financial assets of Airport of Zurich Noise Fund

       

      370,644

       

      394,428

      Accrual/deferral towards Flughafen Zürich AG 1)

       

      –13,188

       

      –7,014

      Total assets invested for Airport of Zurich Noise Fund

       

      409,848

       

      422,882

      1) For accounting reasons, an asset or liability towards Flughafen Zürich AG arises as of the balance sheet date. This is compensated in the subsequent month, so the balance of liquid funds is restored.

      The following table presents an overview of the maturities and credit ratings of the assets invested for the Airport of Zurich Noise Fund:

      (CHF 1,000)

       

      2021

       

      2022

       

      2023

       

      2024

       

      2025ff.

       

      Total

      Cash and cash equivalents

       

      3,943

       

       

       

       

       

       

       

       

       

      3,943

      AAA

       

      43,426

       

      15,000

       

      29,048

       

      8,024

       

      60,676

       

      156,174

      AA+/AA/AA–

       

      0

       

      5,010

       

      13,003

       

      16,998

       

      21,481

       

      56,492

      A+/A/A–

       

      3,900

       

      20,015

       

      17,991

       

      37,293

       

      15,522

       

      94,721

      BBB+/BBB/BBB-

       

       

       

      5,004

       

       

       

       

       

       

       

      5,004

      Without rating

       

       

       

       

       

       

       

       

       

      106,703

       

      106,703

      Other 1)

       

      –13,189

       

       

       

       

       

       

       

       

       

      –13,189

      Total assets invested for Airport of Zurich Noise Fund

       

      38,080

       

      45,029

       

      60,042

       

      62,315

       

      204,382

       

      409,848

      in %

       

      9.3

       

      11.0

       

      14.6

       

      15.2

       

      49.9

       

      100.00

      1) For accounting reasons, an accrual (deferral) towards Flughafen Zürich AG arises as of the balance sheet date. This is compensated in the subsequent month, so the balance of liquid funds is restored.

    • 21 DEFERRED TAX ASSETS AND LIABILITIES

      In accordance with IAS 12.47, deferred tax assets and liabilities are calculated at the rate that is expected to apply when the asset is realised or the liability settled. Flughafen Zürich AG anticipates a tax rate of 20.4% for the reporting period (2019: 20.4%). The expected tax rate is calculated on the basis of the applicable rate (rounded up or down) at the domicile of Flughafen Zürich AG and its subsidiaries.

      The balance of deferred tax assets and liabilities changed as follows:

      (CHF 1,000)

       

      2020

       

      2019

      Deferred tax assets and liabilities, net as at 1 January

       

      –34,033

       

      –42,334

      Deferred taxes on remeasurement of defined benefit obligations, recognised in OCI

       

      –450

       

      6,212

      Change according to income statement

       

      16,001

       

      2,228

      Foreign exchange differences

       

      –204

       

      –139

      Deferred tax assets and liabilities, net as at 31 December

       

      –18,686

       

      –34,033

      of which deferred tax assets

       

      5,403

       

      2,121

      of which deferred tax liabilities

       

      –24,089

       

      –36,154

      Deferred tax assets and liabilities are allocated to the following items:

       

       

      31.12.2020

       

      31.12.2019

      (CHF 1,000)

       

      Assets

       

      Liabilities

       

      Assets

       

      Liabilities

      Property, plant and equipment & other intangible assets

       

       

       

      –10,428

       

       

       

      –12,169

      Intercompany loans and other financial assets

       

       

       

      –15,300

       

       

       

      0

      Renovation fund

       

       

       

      –37,659

       

       

       

      –36,495

      Aircraft noise

       

       

       

      –26,582

       

       

       

      –26,266

      Financial liabilities issuing costs

       

       

       

      –298

       

      72

       

       

      Employee benefit obligations

       

      40,308

       

       

       

      38,757

       

       

      Tax loss carryforwards for which deferred tax assets were recognised

       

      26,033

       

       

       

      0

       

       

      Miscellaneous items

       

      5,403

       

      –163

       

      2,121

       

      –53

      Deferred tax assets and liabilities, gross

       

      71,744

       

      –90,430

       

      40,950

       

      –74,983

      Offsetting of assets and liabilities

       

      –66,341

       

      66,341

       

      –38,829

       

      38,829

      Deferred tax assets and liabilities, net

       

      5,403

       

      –24,089

       

      2,121

       

      –36,154

    • 22 Employee benefits

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Net defined benefit obligations

       

      –184,339

       

      –177,007

      Other long-term employee benefits

       

      –13,250

       

      –13,197

      Employee benefit obligations

       

      –197,589

       

      –190,204

      22.1 Post-employment benefits

      Flughafen Zürich AG maintains the following employee benefit plans:

      a) Defined benefit plans

      Affiliation contract with the BVK Employee Pension Fund of the Canton of Zurich (BVK)

      The employees of Flughafen Zürich AG are affiliated to the BVK (Employee Pension Fund of the Canton of Zurich). The BVK is a multi-employer plan for employees of the Canton of Zurich and other employers. The BVK is registered with the Pensions and Trusts Supervisory Authority of the Canton of Zurich and is monitored by the latter.

      The BVK Foundation Board, comprising nine employer and nine employee representatives, is the senior executive body of the Foundation and thus responsible for the strategic objectives and principles and for monitoring its management. The management is responsible for implementing legal requirements and the instructions given by the Foundation Board and its committees.

      The BVK is subject to the provisions of the Federal Act on Occupational Old Age, Survivorsʼ and Invalidity Pension Provision (BVG) and its implementing provisions. The BVG defines the minimum insured salary, the minimum retirement credits and the return on them, and the conversion rate. As a result of these statutory provisions and the features of the plan, Flughafen Zürich AG, as an employer affiliated to the BVK, is exposed to actuarial risks such as investment risk, interest rate risk, disability risk and the risk of longevity.

      Moreover, in accordance with the statutory provisions, the management body of the pension fund is also responsible for ensuring that restructuring measures are decided and implemented in the event of a shortfall, so that complete cover for future pension benefits is restored within a reasonable period. Among other things this includes restructuring payments in the form of additional contributions.

      According to the applicable Swiss accounting regulations (Art. 44 BVV2), the liabilities of the BVK were funded at an (unaudited) level of 105.2% as at 31 December 2020 (2019: 100.5%).

      Employees of Flughafen Zürich AG are insured with the BVK against the risks of old age, death and disability. The retirement benefits are determined on the basis of the individual retirement savings accounts at the time of retirement and are calculated by multiplying the balance of the savings account by the conversion rate stipulated in the regulations. The statutory retirement age is 65. Early retirement with a reduced conversion rate is possible as of the time the employee turns 60. Flughafen Zürich AG pays age-related contributions for all insured persons of between 6.0% and 17.4% of the insured salary and risk contributions of 1.2%. Up to the age of 20, only the risk contribution is incurred.

      The assets originate from the BVK benefit plans. The investment strategy is defined by the BVK Foundation Board, based on the proposals and recommendations of the Boardʼs own investment committee, which in particular is responsible for managing the BVKʼs assets. It prepares all the investment-related decisions taken by the Foundation Board and manages and supervises their implementation by the management. In addition, it is supported in the monitoring of the investment strategy and the investment process by an external investment controller.

      The investment strategy (asset allocation) ranges within tactical bandwidths so as to enable a flexible response to current market situations. The aim is to manage the capital investments effectively and efficiently. The assets are well diversified. Compliance with the investment guidelines and the investment results are reviewed periodically.

      Because the BVK, as a multi-employer plan, does not prepare separate financial statements for Flughafen Zürich AG, the company is also liable for liabilities of other affiliated employers, in accordance with the statutory provisions.

      In the past financial year, the BVK announced a change to the discount rate from 2% to 1.75% and thus a reduction in the conversion rates of almost 0.2 percentage points as of 1 January 2022. In this context, the pension fund decided to protect the vested rights of members aged at least 60 in 2021. In addition, to cushion the impact on members born between 1962 and 2000, the retirement savings will be increased over a period of five years from 1 January 2022 (members born between 1962 and 1973: +3.2% / members born between 1974 and 2000: +2.0%). In financial year 2020, this plan amendment was recognised as past service cost in the amount of CHF 2.9 million.

      Explanation of the amounts in the consolidated financial statements

      The actuarial calculation of the defined benefit obligations as at 31 December 2020 and the service cost was performed by independent actuaries using the projected unit credit method. The fair value of the plan assets was determined as at 31 December 2020 based on the information available at the date of preparation of the annual financial statements.

      As no separate information was available for the affiliation contract with Flughafen Zürich AG for the plan assets or for the breakdown of assets into asset classes at the reporting date, assumptions had to be made on the basis of the available information for these purposes.

      The net defined benefit obligations recognised in the balance sheet at the reporting date are as follows:

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Present value of funded defined benefit obligations

       

      –775,275

       

      –746,572

      Fair value of plan assets

       

      590,936

       

      569,565

      Net defined benefit obligations recognised in the balance sheet

       

      –184,339

       

      –177,007

      The defined benefit obligations changed as follows:

      (CHF 1,000)

       

      2020

       

      2019

      Present value of defined benefit obligations as at 1 January

       

      –746,572

       

      –652,069

      Current service costs

       

      –24,467

       

      –19,877

      Interest expenses on defined benefit obligations

       

      –1,464

       

      –5,121

      Employee contributions

       

      –12,128

       

      –12,034

      Benefits paid

       

      32,244

       

      20,594

      Gain/(loss) due to experience

       

      –13,539

       

      –9,323

      Gain/(loss) due to financial assumption changes

       

      –6,473

       

      –68,742

      Past service costs

       

      –2,876

       

      0

      Present value of defined benefit obligations as at 31 December

       

      –775,275

       

      –746,572

      The weighted average duration of the defined benefit obligations at 31 December 2020 was 18.2 years (2019: 18.1 years).

      The plan assets changed as follows:

      (CHF 1,000)

       

      2020

       

      2019

      Fair value of plan assets as at 1 January

       

      569,565

       

      508,603

      Employer contributions

       

      18,089

       

      18,009

      Employee contributions

       

      12,128

       

      12,034

      Benefits paid

       

      –32,244

       

      –20,594

      Administration expenses

       

      –21

       

      –21

      Interest income on plan assets

       

      1,140

       

      4,083

      Return on plan assets excluding amounts included in interest income

       

      22,279

       

      47,451

      Fair value of plan assets as at 31 December

       

      590,936

       

      569,565

      The net defined benefit obligations changed as follows:

      (CHF 1,000)

       

      2020

       

      2019

      Net defined benefit obligations as at 1 January

       

      –177,007

       

      –143,466

      Total charge recognised in the income statement

       

      –27,688

       

      –20,936

      Total remeasurements recognised in other comprehensive income

       

      2,267

       

      –30,614

      Employer contributions

       

      18,089

       

      18,009

      Net defined benefit obligations as at 31 December

       

      –184,339

       

      –177,007

      The company expects employer contributions of CHF 20.2 million for financial year 2021.

      Analysis of the amounts recognised in the income statement:

      (CHF 1,000)

       

      2020

       

      2019

      Current service cost

       

      –27,343

       

      –19,877

      Net interest expenses on defined benefit obligations

       

      –324

       

      –1,038

      Administration expenses

       

      –21

       

      –21

      Total charge recognised in the income statement

       

      –27,688

       

      –20,936

      Analysis of the amounts recognised in other comprehensive income:

      (CHF 1,000)

       

      2020

       

      2019

      Actuarial gains/(losses) due to experience

       

      –13,539

       

      –9,323

      Actuarial gains/(losses) due to changes in financial assumptions

       

      –6,473

       

      –68,742

      Return on plan assets excluding amounts included in net interest

       

      22,279

       

      47,451

      Total remeasurements recognised in other comprehensive income

       

      2,267

       

      –30,614

      Assumptions used in actuarial calculations:

      (in % or years)

       

      2020

       

      2019

      Discount rate as at 31 December

       

      0.15

       

      0.20

      Consumer price inflation

       

      0.75

       

      0.75

      Expected rate of salary increases (incl. inflation)

       

      1.50

       

      1.50

      Expected rate of pension increases

       

      0.00

       

      0.00

      Interest rate on retirement savings accounts

       

      1.00

       

      1.00

      Life expectations at age 65 (years):

       

       

       

       

      Female (aged 45)

       

      26.5

       

      26.4

      Female (aged 65)

       

      25.7

       

      24.7

      Male (aged 45)

       

      24.5

       

      24.4

      Male (aged 65)

       

      23.7

       

      22.6

      The discount rate is based on CHF-denominated corporate bonds with an AA rating issued by domestic and foreign issuers and listed on SIX Swiss Exchange. The future rate of salary increase is the long-term historical average adjusted for managementʼs current estimates for the future. Based on the current financial status of the pension fund, no future increases in pensions are anticipated.

      As at 31 December 2020, the life expectancy assumption was calculated by projecting future longevity improvements in accordance with the Continuous Mortality Investigation 2016 model (CMI model), based on historically observed longevity improvements in Switzerland and a future long-term improvement rate of 1.50%.

      Breakdown of plan assets by asset class:

      (in %)

       

      31.12.2020

       

      31.12.2019

      Asset category:

       

       

       

       

      Cash and cash equivalents

       

      4.0

       

      2.0

      Shares

       

      35.0

       

      33.0

      Bonds

       

      32.3

       

      37.0

      Property

       

      18.5

       

      18.0

      Other

       

      10.2

       

      10.0

      Total

       

      100.0

       

      100.0

      Sensitivities

      The discount rate, the assumption regarding future salary increases and the return on retirement savings accounts are the significant actuarial assumptions in calculating the present value of the defined benefit obligations. A change in the assumptions of +0.25% or –0.25% has the following impact on the present value of the defined benefit obligations (DBO):

       

       

      2019 Effect on DBO

       

      2018 Effect on DBO

      (CHF 1,000)

       

      +0.25%

       

      –0.25%

       

      +0.25%

       

      –0.25%

      Discount rate

       

      –31,786

       

      34,112

       

      –29,863

       

      32,849

      Expected salary increases

       

      2,326

       

      –2,326

       

      2,240

       

      –2,240

      Interest rate on retirement savings accounts

       

      3,876

       

      –3,101

       

      3,733

       

      –1,493

      The above sensitivity calculations are based on one assumption changing while the others remain unchanged. In practice, however, there are certain correlations between the individual assumptions. The same method was used to calculate the sensitivities and the defined benefit obligations recognised at the reporting date.

      b) Defined contribution plan

      An agreement exists with Zurich Insurance Company offering benefits to the pensioners of the former Flughafen-Immobilien-Gesellschaft (FIG). This group of beneficiaries did not transfer to the BVK. This is a defined contribution plan which is fully funded. Zurich Insurance Company is responsible for providing all future benefits.

      22.2 Other long-term employee benefits

      Flughafen Zürich AG pays its employees loyalty bonuses on the basis of years of service, in accordance with the employment regulations of 1 January 2016. The corresponding provision of CHF 13.3 million (2019: CHF 13.2 million) was calculated based on the number of accumulated years of service which, at the reporting date, was 10.0 years (2019: 9.6 years).

    • 23 Other current liabilities, accruals and deferrals

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Deferred income and accruals

       

      89,848

       

      83,219

      Accrued interest on financial liabilities

       

      9,332

       

      7,373

      Deposits and advance payments by customers

       

      22,639

       

      7,199

      Cross-currency swap

       

      0

       

      4,843

      Provision for holidays and overtime

       

      3,115

       

      4,646

      Other liabilities

       

      3,734

       

      6,295

      Total other current liabilities, accruals and deferrals

       

      128,668

       

      113,575

      of which financial liabilities carried at amortised cost

       

      99,180

       

      88,819

      of which financial liabilities measured at fair value

       

      0

       

      4,843

      of which other current liabilities, accruals and deferrals excluding financial instruments

       

      29,488

       

      19,913

    • 24 Further details

      24.1 Information concerning the performance of a risk assessment

      Flughafen Zürich AG has set itself the strategic goal of maintaining a comprehensive risk management system and is committed to carrying out uniform and systematic risk management.

      Risk management ensures that risks are approached systematically and given due consideration. It guarantees transparency over the main risks associated with the companyʼs business activities as well as continuous improvement and monitoring of the risk situation.

      The risk management system is the tool used to manage corporate risk and consists of the following components:

      • Risk policy objectives and principles
      • Risk management organisation
      • Risk management process
      • Risk reporting
      • Auditing and review of the risk management system

      In this context, the Board of Directors and the Management Board have overall responsibility under Swiss company law for ensuring the groupʼs existence and profitability. The Board of Directors is responsible for overall oversight of risk management. The Chief Financial Officer (CFO) also acts as the Management Boardʼs Chief Risk Officer.

      The central Risk Manager reports to the CFO as Chief Risk Officer and stipulates minimum requirements for decentralised risk management at line management level. The central Risk Manager is responsible for risk reporting as well as the operation and ongoing development of the risk management system.

      The Management Board members are each responsible for the risks that could arise primarily in their area. They bear responsibility for identifying, assessing and managing the relevant risks (risk owner concept). The central Risk Manager is responsible for any risks that cannot be assigned to one single area of business.

      In consultation with the central Risk Manager, other specialist units perform their specific risk management procedures themselves, such as safety management, liquidity management, occupational safety, information security, fire prevention and contingency planning. The same goes for Flughafen Zürich AGʼs international subsidiaries. From this, the key risks to Flughafen Zürich AG are incorporated into the central risk reporting. This describes the business risks in detail and assesses their probability of occurrence and operational and financial impact as well as measures and responsibilities. Implementation of the measures is continually monitored. The risk report is presented to the Management Board and the Board of Directors once a year.

      a) Financial risk management

      Due to the nature of its activities, Flughafen Zürich AG is exposed to the following relevant financial risks, including:

      • i) Credit risk
      • ii) Liquidity risk
      • iii) Market risk (foreign currency and interest rate risks)

      The following sections provide an overview of the extent of the various financial risks and the objectives, principles and processes relating to the assessment, monitoring and hedging of risks, as well as of the capital management of the group. Further information on financial risks can also be found in the corresponding notes.

      i) Credit risk

      Credit risk refers to the risk that Flughafen Zürich AG could incur losses if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Cash and cash equivalents, accruals, trade receivables and other financial assets are exposed to credit risk.

      Flughafen Zürich AG invests its cash and cash equivalents and fixed-term deposits with major banks with a rating indicating their solvency. In addition, the company minimises other risks relating to cash and cash equivalents and fixed-term deposits in that it does not invest with a single bank, but with a variety of financial service providers.

      As a rule, accruals as at the reporting date are invoiced within one month and subsequently monitored as part of trade receivables management.

      With the exception of the home carrier Swiss, credit risk is distributed over a broad clientele. Trade receivables include an amount of CHF 7.2 million due from Swiss (2019: CHF 18.8 million) (see note 14, Trade receivables). In the period between the reporting date and the preparation of the 2020 annual report, Swiss paid the outstanding amount arising from flight operations charges as at 31 December 2020 in full, with the exception of the air traffic control charges for which it was granted an extension of the period for payment until some time in the course of the 2021 financial year in light of the coronavirus crisis.

      The exposure to credit risk primarily depends on the individual characteristics of each client. Risk assessments include a creditworthiness check, taking account of the clientʼs financial circumstances, past experience and other factors. The maturity structure of trade receivables is normally examined on a weekly basis. Where necessary, terms of payment aimed at minimising risk (normally proforma invoicing) are applied, or security is requested (mainly in the form of bank guarantees).

      The financial assets of the Airport of Zurich Noise Fund are invested by professional financial institutions, partly on the basis of a conservative, money market-oriented investment strategy (mainly in fixed-rate debt instruments) and partly in a mixed investment fund. Here, priority is given to preservation of value and flexibility with respect to early redemption of investments. The direct use of derivative financial instruments is not permitted. The investment horizon is based on the expected obligation to make payments from the Airport of Zurich Noise Fund and averages around four years. For bonds held directly, the minimum acceptable rating is BBB+ (Standard & Poorʼs) or an equivalent rating from another recognised rating agency (see note 20, Airport of Zurich Noise Fund).

      The maximum exposure to credit risk corresponds to the carrying amounts of the individual financial assets. No guarantees or similar commitments exist that could give rise to an increase in the credit exposure above the respective carrying amounts. The maximum exposure to credit risk as at the reporting date was as follows:

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Cash equivalents (excluding cash on hand)

       

      351,009

       

      132,308

      Current and non-current fixed-term deposits

       

      200,821

       

      38,136

      Non-current financial assets of Airport of Zurich Noise Fund

       

      370,644

       

      394,428

      Trade receivables, net

       

      71,779

       

      112,189

      Current financial assets of Airport of Zurich Noise Fund

       

      48,449

       

      17,376

      Other receivables and prepaid expenses

       

      73,157

       

      21,794

      Other financial assets

       

      4,120

       

      7,792

      Total maximum exposure to credit risk

       

      1,119,979

       

      724,023

      ii) Liquidity risk

      Liquidity risk refers to the risk that Flughafen Zürich AG may not be able to meet its financial obligations on the due date.

      Flughafen Zürich AG monitors liquidity risk via a prudent liquidity management process. Here it observes the principle that it must have sufficient flexibility and room for manoeuvre with respect to the availability of liquid funds at short notice. This means maintaining an adequate reserve of liquid funds, ensuring the availability of sufficient funds for financing purposes by securing adequate credit facilities, and being able to issue financial securities on the capital market. For this purpose, the company uses rolling liquidity planning that is based on expected cash flows and is periodically updated. Treasury is responsible for monitoring liquidity risk. As at the reporting date, Flughafen Zürich AG had the following unused credit facilities at its disposal:

      (CHF 1,000)

       

      Duration

       

      31.12.2020

       

      31.12.2019

      Operating credit lines (committed credit lines) 1)

       

      31.12.2025

       

      160,000

       

      240,000

      Total credit lines

       

       

       

      160,000

       

      240,000

      Utilisation: fixed advance

       

       

       

      –60,000

       

      0

      Utilisation: bank guarantees

       

       

       

      –12,110

       

      –15,904

      Total unused credit lines

       

       

       

      87,890

       

      224,096

      1) The operating credit lines amount to CHF 300 million as of February 1, 2021.

      The following tables show the contractual maturities of financial liabilities (including interest payments) held by Flughafen Zürich AG:

      (CHF 1,000)

       

      Carrying amount

       

      Contractual cash flows

       

      Due within 1 year

       

      Due within 1 to 5 years

       

      Due in more than 5 years

      31 December 2020

       

       

       

       

       

      Debentures

       

      1,648,536

       

      1,709,488

       

      11,288

       

      731,050

       

      967,150

      Liabilities to banks

       

      173,912

       

      173,912

       

      64,025

       

      32,461

       

      77,426

      Lease liabilities

       

      83,278

       

      83,278

       

      7,463

       

      28,344

       

      47,471

      Liabilities from concession agreements

       

      23,199

       

      24,108

       

      1,534

       

      7,311

       

      15,263

      Other financial liabilities

       

      22,517

       

      22,517

       

      2,117

       

      20,400

       

      0

      Trade payables

       

      60,981

       

      60,981

       

      60,981

       

      0

       

      0

      Other current liabilities and accruals

       

      99,180

       

      99,180

       

      99,180

       

      0

       

      0

      Total non-derivative financial liabilities

       

      2,111,603

       

      2,173,464

       

      246,588

       

      819,566

       

      1,107,310

      Cross-currency swap

       

      0

       

      0

       

      0

       

      0

       

      0

      Total derivative financial liabilities

       

      0

       

      0

       

      0

       

      0

       

      0

      Total

       

      2,111,603

       

      2,173,464

       

      246,588

       

      819,566

       

      1,107,310

      (CHF 1,000)

       

      Carrying amount

       

      Contractual cash flows

       

      Due within 1 year

       

      Due within 1 to 5 years

       

      Due in more than 5 years

      31 December 2019

       

       

       

       

       

      Debentures

       

      1,050,354

       

      1,099,626

       

      311,938

       

      426,750

       

      360,938

      Liabilities to banks

       

      107,735

       

      107,735

       

      2,458

       

      105,277

       

      0

      Lease liabilities

       

      84,582

       

      84,594

       

      6,175

       

      25,271

       

      53,148

      Liabilities from concession agreements

       

      26,324

       

      48,458

       

      1,068

       

      5,575

       

      41,815

      Other financial liabilities

       

      41,925

       

      41,925

       

      41,925

       

      0

       

      0

      Trade payables

       

      56,790

       

      56,790

       

      56,790

       

      0

       

      0

      Other current liabilities and accruals

       

      88,819

       

      88,819

       

      88,819

       

      0

       

      0

      Total non-derivative financial liabilities

       

      1,456,529

       

      1,527,947

       

      509,173

       

      562,873

       

      455,901

      Cross-currency swap

       

      4,843

       

      5,640

       

      997

       

      4,643

       

      0

      Total derivative financial liabilities

       

      4,843

       

      5,640

       

      997

       

      4,643

       

      0

      Total

       

      1,461,372

       

      1,533,587

       

      510,170

       

      567,516

       

      455,901

      iii) Market risk

      Market risk refers to the risk that changes in market prices such as exchange rates and interest rates could have an impact on the finance result or the value of the financial instruments.

      The objective of market risk management is to monitor and control such risks in order to ensure that they do not exceed a specified limit.

      iiia) Currency risk

      The functional currency of the consolidated financial statements of Flughafen Zürich AG is the Swiss franc (CHF). The group is exposed to foreign currency exchange movements primarily in respect of the Brazilian real (BRL), the Chilean peso (CLP), the Indian rupee (INR), the US dollar (USD), the euro (EUR) and the Malaysian ringgit (MYR).

      An appreciation or depreciation of the Swiss franc by 5% against the relevant currencies as at 31 December 2020 would have increased or reduced equity or profit by the amounts below. This analysis assumes that all other variables – in particular interest rates – remain unchanged.

       

       

      Appreciation of CHF (plus 5%)

       

      Depreciation of CHF (minus 5%)

      (CHF 1,000)

       

      Equity

       

      Profit

       

      Equity

       

      Profit

      BRL

       

      –7,271

       

      0

       

      7,271

       

      0

      CLP

       

      –838

       

      0

       

      838

       

      0

      INR

       

      –190

       

      0

       

      190

       

      0

      MYR

       

      –10

       

      0

       

      10

       

      0

      USD

       

      0

       

      –33

       

      0

       

      33

      EUR

       

      0

       

      –188

       

      0

       

      188

      31 December 2020

       

      –8,309

       

      –221

       

      8,309

       

      221

      BRL

       

      –3,267

       

      0

       

      3,267

       

      0

      CLP

       

      –872

       

      0

       

      872

       

      0

      MYR

       

      –11

       

      0

       

      11

       

      0

      USD

       

      0

       

      –280

       

      0

       

      280

      EUR

       

      0

       

      –523

       

      0

       

      523

      31 December 2019

       

      –4,150

       

      –803

       

      4,150

       

      803

      iiib) Interest rate risk

      Interest rate risk can be divided into an interest-related cash flow risk, i.e. the risk that future interest payments could change due to fluctuations in the market interest rate, and an interest-related risk of a change in fair value, i.e. the risk that the fair value of a financial instrument could change due to fluctuations in the market interest rate.

      The financial assets of the Airport of Zurich Noise Fund are primarily invested in fixed-rate debt instruments and a mixed investment fund. The direct use of derivative financial instruments is not permitted in this context.

      Most financing transactions have been concluded at a fixed rate of interest. The interest rate risk on variable liabilities is hedged on a case-by-case basis using interest rate swaps.

      As at the reporting date, Flughafen Zürich AGʼs interest rate profile was as follows (interest-bearing financial instruments):

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Current and non-current fixed-term deposits

       

      200,821

       

      38,136

      Fixed-interest financial assets of Airport of Zurich Noise Fund

       

      312,391

       

      307,305

      Fixed-interest financial instruments (assets)

       

      513,212

       

      345,441

      Cash and cash equivalents

       

      347,271

       

      114,336

      Cash and cash equivalents of Airport of Zurich Noise Fund

       

      3,943

       

      18,092

      Variable-interest financial instruments (assets)

       

      351,214

       

      132,428

      Total interest-bearing assets

       

      864,426

       

      477,869

       

       

       

       

       

      Current and non-current debentures

       

      –1,648,536

       

      –1,050,354

      Current and non-current liabilities to banks

       

      –173,912

       

      –107,735

      Current and non-current lease liabilities

       

      –83,278

       

      –84,582

      Current and non-current other financial instruments

       

      –22,517

       

      –41,925

      Fixed interest financial instruments (liabilities)

       

      –1,928,243

       

      –1,284,596

      Total interest-bearing liabilities

       

      –1,928,243

       

      –1,284,596

      The table below shows the sensitivity analysis for variable and fixed-rate financial instruments with a deviation of 50 basis points:

       

       

      Increase by 50 bp

       

      Decrease by 50 bp

      (CHF 1,000)

       

      Equity

       

      Profit

       

      Equity

       

      Profit

      Variable-interest financial instruments

       

      0

       

      1,397

       

      0

       

      –1,397

      Fixed-interest financial instruments

       

      –4,815

       

      0

       

      4,815

       

      0

      31 December 2020

       

      –4,815

       

      1,397

       

      4,815

       

      –1,397

      Variable-interest financial instruments

       

      0

       

      560

       

      0

       

      –560

      Fixed-interest financial instruments

       

      –4,664

       

      0

       

      4,664

       

      0

      31 December 2019

       

      –4,664

       

      560

       

      4,664

       

      –560

      B) CATEGORIES OF FINANCIAL INSTRUMENTS

      The following tables show the carrying amounts of all financial instruments by category both for the reporting period and for the previous year:

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

      Current and non-current financial assets of Airport of Zurich Noise Fund (bonds)

       

      312,391

       

      307,305

      Total financial assets carried at amortised cost

       

      312,391

       

      307,305

       

       

       

       

       

      Current and non-current financial assets of Airport of Zurich Noise Fund (mixed investment fund)

       

      106,703

       

      104,499

      Total financial assets measured at fair value

       

      106,703

       

      104,499

       

       

       

       

       

      Cash (excl. cash on hand) and cash equivalents, collateral and short-term monetary investments

       

      351,009

       

      132,308

      Current and non-current fixed-term deposits

       

      200,821

       

      38,136

      Trade receivables, net

       

      71,779

       

      112,189

      Other receivables and prepaid expenses

       

      73,157

       

      21,794

      Other financial assets

       

      4,120

       

      7,792

      Total cash and cash equivalents, fixed-term deposits, receivables and other financial assets

       

      700,886

       

      312,219

       

       

       

       

       

      Debentures

       

      –1,648,536

       

      –1,050,354

      Total financial liabilities carried at amortised cost

       

      –1,648,536

       

      –1,050,354

       

       

       

       

       

      Other current liabilities, accruals and deferrals (cross-currency swap)

       

      0

       

      –4,843

      Total financial liabilities measured at fair value

       

      0

       

      –4,843

       

       

       

       

       

      Liabilities from concession agreements

       

      –23,199

       

      –26,324

      Liabilities to banks

       

      –173,912

       

      –107,735

      Lease liabilities

       

      –83,278

       

      –84,582

      Other financial liabilities

       

      –22,517

       

      –41,925

      Trade payables, net

       

      –60,981

       

      –56,790

      Other current liabilities, accruals and deferrals (excluding derivatives and non-financial instruments)

       

      –99,180

       

      –88,819

      Total other financial liabilities

       

      –463,067

       

      –406,175

      c) Fair values

      The carrying amounts of cash and cash equivalents, fixed-term deposits, receivables, other financial assets and other financial liabilities are a reasonable approximation of their fair values.

      Financial assets in the Airport of Zurich Noise Fund: The fair value of the bonds corresponds to the market price of the securities at the reporting date (level 1). The fair value of the mixed investment fund is the unadjusted net asset value, as the units may be redeemed at that value as at the reporting date (level 2).

      Financial liabilities: The fair value of the debentures corresponds to the market price (level 1).

      Derivative financial instruments: The fair value of the cross-currency swap is determined using a fair value model (level 2). The key inputs are foreign exchange rates and interest rates observable in the market. Unobservable inputs are not significant to the measurement.

      (CHF 1,000)

       

       

       

      31.12.2020

       

       

       

      31.12.2019

       

       

      Carrying amount

       

      Fair value

       

      Carrying amount

       

      Fair value

      Financial assets of Airport of Zurich Noise Fund (bonds)

       

      312,391

       

      318,665

       

      307,305

       

      313,155

      Total financial assets

       

      312,391

       

      318,665

       

      307,305

       

      313,155

       

       

       

       

       

       

       

       

       

      Debentures

       

      –1,648,536

       

      –1,672,925

       

      –1,050,354

       

      –1,093,000

      Total financial liabilities

       

      –1,648,536

       

      –1,672,925

       

      –1,050,354

       

      –1,093,000

      d) Fair value hierarchy of financial instruments

      Financial instruments recognised or disclosed at fair value are categorised according to the following hierarchy, reflecting the significance of the inputs used to measure fair value:

      Level 1 – Quoted market prices

      The inputs used to measure the assets or liabilities are quoted, unadjusted market prices determined in active markets for identical assets or liabilities at the measurement date.

      Level 2 – Measurement based on observable inputs

      The assets or liabilities are measured on the basis of inputs (other than the quoted prices included within level 1) that are directly or indirectly observable for the asset or liability.

      Level 3 – Measurement based on unobservable inputs

      The inputs for these assets or liabilities are not observable.

      (CHF 1,000)

       

      31.12.2020

       

      31.12.2019

       

       

       

      Level 1

       

      Level 2

       

      Level 3

       

      Level 1

       

      Level 2

       

      Level 3

       

      Mixed investment fund of the Airport of Zurich Noise Fund at fair value 2)

       

       

       

      106,703

       

       

       

       

       

      104,499

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      Cross-currency swap

       

       

       

      0

       

       

       

       

       

      –4,843

       

       

       

      e) Capital management

      With respect to capital management, Flughafen Zürich AG pays particular attention to ensuring the continuation of the groupʼs operating activities, achieving an acceptable dividend for shareholders and optimising the balance sheet structure, particularly in periods of major investment activity or after crises. In order to achieve these objectives, Flughafen Zürich AG can adjust the amount of the dividend payment or repay capital to shareholders.

      Flughafen Zürich AG primarily monitors the following key financial indicator: net debt to EBITDA. Here it is especially important to ensure that the ratio of debt to equity is in line with the budgetable cash flows and investments, and tends towards the conservative side. The higher debt resulting from the 2020 financial year will therefore be reduced again in the next few years. In this way a high degree of entrepreneurial flexibility can be assured at all times, including when future unforeseeable events occur.

      The necessary quantity of treasury shares may be held for the purpose of employee and bonus programmes. It is not permitted to accumulate several yearsʼ worth of treasury shares for the purpose of bonus programmes, however. Neither is it permitted to hold treasury shares to use as payment for acquisitions (exchange of shares in the event of a takeover) or for the purpose of speculating on higher selling prices. Accumulated treasury shares may in no case exceed 10% of all shares issued.

      24.2 CAPITAL COMMITMENTS

      As at the reporting date, capital commitments for various buildings and engineering structures amounted to around CHF 280 million in total. The most significant capital commitments involved the refurbishment and expansion of the baggage sorting system (CHF 132 million), the renovation of runway 28/10 (CHF 29 million) and the expansion of the landside passenger areas (CHF 11 million). In addition, the companyʼs share of capital commitments for the Circle still amounted to around CHF 67 million. Contractual capital commitments related to the concession for the airport in Noida, New Delhi amounted to approximately CHF 35 million at the end of 2020.

      24.3 CONTINGENT LIABILITIES

      A number of legal proceedings and claims against Flughafen Zürich AG in the context of its normal business activities are still pending. The company does not expect the amounts required to settle these lawsuits and claims to have a significantly negative impact on the consolidated financial statements and cash flow of Flughafen Zürich AG.

      Depending on future and final-instance legal judgements, especially with respect to the southern approaches, in particular the new noise-related liabilities, but also the old ones, may in future be subject to substantial adjustments, which would also require adjustments to the noise-related costs recognised as assets and liabilities in the balance sheet. At the present time, it is not possible to reliably estimate the total costs to capitalise as an intangible asset from the right of formal expropriation, the resulting amortisation or the corresponding provision.

      As part of its involvement in the expansion and operation of Confins International Airport in Belo Horizonte, Flughafen Zürich AG provides a guarantee as security for local debt financing, which is made available by the Brazilian development bank Banco Nacional de Desenvolvimento Econômico e Social (BNDES). As at the reporting date, the amount arising from this guarantee was CHF 20.3 million (31 December 2019: CHF 25.0 million). Moreover, the company has entered into a counterbond for a performance bond which the operator, Concessionária do Aeroporto Internacional de Confins S.A., had to submit to Brazilʼs National Civil Aviation Authority (ANAC). As at the reporting date, the amount arising from the counterbond was CHF 7.4 million (31 December 2019: CHF 10.6 million).

      As part of its involvement in the expansion and operation of the airport in Florianópolis, Flughafen Zürich AG provides a guarantee as security for local debt financing, which is made available by the Brazilian development bank Banco Nacional de Desenvolvimento Econômico e Social (BNDES). As at the reporting date, the amount arising from this guarantee was CHF 70.4 million (31 December 2019: CHF 90.7 million). Moreover, Flughafen Zürich AG has entered into a counterbond for a performance bond which the operator, Concessionária do Aeroporto Internacional de Florianópolis S.A., had to submit to Brazilʼs National Civil Aviation Authority (ANAC). As at the reporting date, the amount arising from the counterbond was CHF 10.9 million (31 December 2019: CHF 15.1 million).

      As part of its involvement in the expansion and operation of the airports in Vitória and Macaé in the southeast of Brazil, Flughafen Zürich AG has entered into a counterbond for a performance bond which the operator, Aeroportos do Sudeste do Brasil S.A., had to submit to Brazilʼs National Civil Aviation Authority (ANAC). As at the reporting date, the amount arising from the counterbond was CHF 7.6 million (31 December 2019: CHF 10.7 million).

      As part of the concession agreements for the airports in Antofagasta and Iquique, the operators have entered into performance bonds for the Chilean Ministry of Public Works (Ministerio de Obras Públicas). As at the reporting date, the total amount arising from these performance bonds was CHF 4.6 million (31 December 2019: CHF 5.7 million).

      For the tender regarding the airport in Noida, New Delhi, Flughafen Zürich AG entered into a tender bond for the project company of the local Indian authority (Noida International Airport Limited). As at the reporting date, the amount arising from this tender bond was CHF 12.1 million (31 December 2019: CHF 13.6 million).

      Flughafen Zürich AG and Swiss Life AG are jointly and severally liable to third parties for the liabilities of the co-ownership structure the Circle and the ordinary partnership the Circle.

      24.4 Related parties

      Related parties are:

      • Canton of Zurich
      • Members of the Board of Directors
      • Members of the Management Board
      • Associates
      • BVK Employee Pension Fund of the Canton of Zurich

      a) Transactions with related parties

      In the reporting period, the costs for the Canton of Zurich police force amounted to CHF 73.0 million (2019: CHF 99.3 million) in accordance with the applicable service level agreement. In this context, accrued expenses amounting to CHF 11.3 million at the reporting date (31 December 2019: CHF 7.8 million) were included in “Other current liabilities, accruals and deferrals”.

      In financial year 2020, consulting revenue from operations and management agreements amounted to CHF 1.9 million (2019: CHF 3.0 million) for the airport in Belo Horizonte and to CHF 2.9 million (2019: CHF 3.6 million) for the airports in Bogotá and Curaçao.

      In the reporting period, Flughafen Zürich AG paid employer contributions amounting to CHF 18.1 million (2019: CHF 18.0 million) to the BVK Employee Pension Fund of the Canton of Zurich for employee benefits (see note 22, Employee Benefits). As at the reporting date, CHF 2.5 million (31 December 2019: CHF 2.6 million) of this was still included in “Other current liabilities, accruals and deferrals”.

      b) Shares held by related parties

      As at the reporting date, members of the Board of Directors and related parties held the following number of shares:

       

       

       

       

      Number of shares as at

       

      Number of shares as at

      Name

       

      Function

       

      31.12.2020

       

      31.12.2019

      Andreas Schmid

       

      Chairman

       

      11,115

       

      11,115

      Eveline Saupper 

       

      Vice Chairwoman; Chairwoman Nomination & Compensation Committee

       

      675

       

      675

      Vincent Albers

       

      Member

       

      2,517

       

      2,517

      Guglielmo L. Brentel

       

      Member

       

      309

       

      309

      Josef Felder

       

      Member; Chairman Audit & Finance Committee

       

      25,200

       

      25,100

      Stephan Gemkow

       

      Member; Chairman International Business Committee

       

      100

       

      100

      Corine Mauch

       

      Member

       

      0

       

      0

      Carmen Walker Späh

       

      Member; Chairwoman Public Affairs Committee

       

      5

       

      5

      Total

       

       

       

      39,921

       

      39,821

      As at the reporting date, members of the Management Board and related parties held the following number of shares:

       

       

      Number of shares as at

       

      Number of shares as at

      Name

       

      31.12.2020

       

      31.12.2019

      Stephan Widrig

       

      6,693

       

      5,572

      Lukas Brosi

       

      1,484

       

      1,043

      Stefan Gross

       

      1,301

       

      860

      Daniel Scheifele

       

      1,318

       

      877

      Stefan Tschudin

       

      859

       

      418

      Total

       

      11,655

       

      8,770

      Neither members of the Board of Directors nor the Management Board held options on the companyʼs shares at the reporting date.

      C) REMUNERATION FOR KEY MANAGEMENT PERSONNEL

      Remuneration for the members of the Board of Directors and Management Board comprises the following:

      (CHF 1,000)

       

      2020

       

      2019

      Short-term employee benefits

       

      3,760

       

      3,991

      Post-employment benefits

       

      548

       

      543

      Share-based payments

       

      155

       

      333

      Total

       

      4,463

       

      4,867

      24.5 Composition of the group

      As at the reporting date, the group comprised the following companies:

      Company

       

      Domicile

       

      Share capital

       

      Stake held in %

      Flughafen Zürich AG

       

      Kloten

       

      CHF 307,018,750

       

      Parent company

      Airport Ground Services AG

       

      Kloten

       

      CHF 100,000

       

      100.0

      Zurich Airport International AG

       

      Kloten

       

      CHF 100,000

       

      100.0

      Zurich Airport International Asia Sdn. Bhd.

       

      Kuala Lumpur

       

      MYR 1.0 million

       

      100.0

      Yamuna International Airport Private Ltd.

       

      New Delhi

       

      INR 490 million

       

      100.0

      Concessionária do Aeroporto Internacional de Florianópolis S.A.

       

      Florianópolis

       

      BRL 304 million

       

      100.0

      Zurich Airport Latin America Ltda.

       

      Rio de Janeiro

       

      BRL 578 million

       

      100.0

      Aeroportos do Sudeste do Brasil S.A.

       

      Vitória

       

      BRL 571 million

       

      100.0

      A-port S.A.

       

      Santiago de Chile

       

      CLP 16,139 million

       

      100.0

      Sociedad Concesionaria Antofagasta S.A.

       

      Santiago de Chile

       

      CLP 3,600 million

       

      100.0

      Sociedad Concesionaria Iquique S.A.

       

      Santiago de Chile

       

      CLP 600 million

       

      100.0

      Sociedad Concesionaria Aeropuerto Diego Aracena S.A.

       

      Santiago de Chile

       

      CLP 10,700 million

       

      100.0

      A-port Operaciones S.A.

       

      Santiago de Chile

       

      CLP 1,352 million

       

      99.0

      A-port Operaciones Colombia S.A.

       

      Bogotá

       

      COP 100 million

       

      99.0

      Unique IDC S.A. de C.V.

       

      Tegucigalpa

       

      HNL 0.2 million

       

      99.0

      In addition, the following associates are included by applying the equity method:

      Company

       

      Domicile

       

      Share capital

       

      Stake held in %

      Sociedade de Participação do Aeroporto de Confins S.A.

       

      Belo Horizonte

       

      BRL 474 million

       

      25.0

      Concessionária do Aeroporto Internacional de Confins S.A.

       

      Belo Horizonte

       

      BRL 907 million

       

      12.8

      Administradora Unique IDC C.A.

       

      Porlamar

       

      VEB 25 million

       

      49.5

      Aeropuertos Asociados de Venezuela C.A.

       

      Porlamar

       

      VEB 10 million

       

      49.5

      24.6 NOTES ON THE LICENCE TO OPERATE ZURICH AIRPORT

      The Swiss Federal Department of the Environment, Transport, Energy and Communications (DETEC) awarded Flughafen Zürich AG the licence to operate Zurich Airport for 50 years from 1 June 2001 to 31 May 2051.

      The licence encompasses the operation of an airport in accordance with the provisions of the ICAO (International Civil Aviation Organisation) governing domestic, international and intercontinental civil aviation services. Flughafen Zürich AG is authorised and obliged to operate Zurich Airport for the entire period cited in the operating licence, and to provide the necessary infrastructure for this purpose. To accomplish this, it is entitled to collect charges from all users of the airport. Furthermore, Flughafen Zürich AG is authorised to assign specific rights and obligations arising from the operating licence to third parties. Insofar as they concern activities relating to airport operations such as aircraft handling, passenger handling, baggage sorting and handling, mail and freight handling, these rights and obligations shall be subject to the provisions of public law. Flughafen Zürich AG regulates rights and obligations it has assigned to third parties in the form of binding entitlements (concessions).

      The concessionaire is obliged to grant access to the airport to all aircraft that are licensed to provide domestic and international flights. The volume of flight traffic and handling of licensed aircraft are governed by the regulations laid down in the Sectoral Aviation Infrastructure Plan (SAIP) and the provisions of the operating regulations. The concessionaire is obliged to implement all measures relating to regulations governing the use of German airspace for landings at, and take-offs from, Zurich Airport without delay, and to submit the necessary applications for approval by the authorities in good time. The concessionaire is empowered and obliged to enforce sound insulation measures and to implement them where they are not contested. The provision whereby the concessionaire shall meet all obligations to which it is bound through clauses of the civil aviation treaty between Germany and Switzerland without entitlement to compensation was declared null and void in response to an objection lodged by Flughafen Zürich AG.

      As part of the bilateral agreements that came into effect on 1 June 2002, the EU ground handling directive (Council Directive 96/67/EC of 15 October 1996 on access to the groundhandling market at Community airports) also became applicable to Switzerland. The principles governing the granting of rights to carry out ground handling activities are defined in the operating regulations for Flughafen Zürich AG dated 30 June 2011. The licences for ground handling operations in areas in which the number of admissible service providers may be limited were re-awarded on the basis of tender procedures on 1 December 2018 for the period to the end of November 2025.

      24.7 CONCESSIONS FOR THE OPERATION OF FOREIGN AIRPORTS

      As at the reporting date, Flughafen Zürich AG was responsible, via its subsidiaries, for the operation and expansion of the following foreign airports:

      Brazil

      In 2017, in a public tender conducted by the Brazilian government as part of an airport privatisation programme, Flughafen Zürich AG was awarded the concession for the operation and expansion of Hercílio Luz International Airport (IATA: FLN) in Florianópolis in the south of Brazil. The airport has a catchment area of 1.1 million people and is located in Santa Catarina, a popular holiday destination for both local and international travellers. In 2020, traffic volumes reached 1.9 million passengers (2019: 3.9 million passengers). Concession fees totalling BRL 241.5 million are payable as consideration for the right to operate the airport. A portion of the concession charge was paid on the day that the concession agreement was signed (BRL 83.3 million or CHF 24.7 million). Further minimum concession payments totalling BRL 158.2 million (CHF 27.0 million) are due over the 30-year term of the concession. Following the signing of the concession agreement, the wholly-owned subsidiary Concessionária do Aeroporto Internacional de Florianópolis S.A., as sole holder of the concession, took over flight operations from the state-owned operator Infraero on 3 January 2018. In October 2019, the mandatory infrastructure measures provided for in the concession totalling approximately BRL 550 million (approximately CHF 132 million) were completed and a new terminal was opened.

      On 15 March 2019, in a public tender conducted by the Brazilian government, Flughafen Zürich AG was awarded concessions for the operation and expansion of the airports in Vitória (IATA: VIX) and Macaé (IATA: MEA) in the southeast of Brazil. In 2020, traffic volumes at the two airports reached around 1.5 million passengers (2019: 3.2 million passengers). A fixed concession fee totalling BRL 437.0 million (CHF 105.0 million), payable as consideration for the right to operate the airports for a period of 30 years, fell due when the concession agreement was signed in September 2019. As of the sixth year of operations, variable, revenue-based concession payments will also be due. Following the signing of the concession agreement, the wholly-owned subsidiary Aeroportos do Sudeste do Brasil S.A., as sole holder of the concession, took over flight operations in Macaé on 20 December 2019 and in Vitória on 3 January 2020.

      Chile

      Since 2011, the wholly-owned subsidiary Sociedad Concesionaria Aeropuerto de Antofagasta S.A. has held the concession for the expansion and operation of Andrés Sabella International Airport (IATA: ANF) in Antofagasta in the north of Chile. The airport is located approximately 25 km north of the city of Antofagasta. In 2020, traffic volumes reached 1.1 million passengers (2019: 2.2 million passengers). The concession has a term that is dependent upon traffic volumes and ends 36 months after the date on which 75% of the maximum aeronautical revenues are generated, but at the latest after 15 years. It is currently expected to end in 2025. No notable infrastructure investments are anticipated in the period through to the end of the concession.

      In 2017, the wholly-owned subsidiary Sociedad Concesionaria Aeropuerto Diego Aracena S.A. acquired the new concession for the operation and expansion of Diego Aracena International Airport (IATA: IQQ) in Iquique in the north of Chile. The airport is located around 40 km south west of the city of Iquique in the Tarapacá region. In 2020, traffic volumes reached 0.9 million passengers (2019: 1.5 million passengers). The concession commenced in April 2018 and has a variable term that is dependent upon traffic volumes and ranges from an anticipated 20 years up to a possible maximum of 25 years. The concession is currently scheduled to end in 2040. As part of the concession agreement, the company has undertaken to invest in measures to upgrade and extend the airport infrastructure, in particular to extend the existing terminal. In 2021, the company is anticipating investments of around CHF 20 million, which will complete the above-mentioned measures to upgrade and extend the airport infrastructure.

      India

      In November 2019, in a public tender conducted by the Indian government, Flughafen Zürich AG was awarded the concession for the construction and operation of the new Noida International Airport. In early 2020, the wholly-owned subsidiary Yamuna International Airport Private Limited based in New Delhi (India) was established for this purpose. On 7 October 2020, the concession agreement was signed locally. Construction work is expected to commence in the second half of 2021. The investments associated with the first phase of construction amount to approximately CHF 650 million. Once the first phase of construction is in operation, the new airport will have the capacity to handle 12 million passengers a year. As of the sixth year of operations, a fixed fee per departing passenger will be payable to the authorities of the state of Uttar Pradesh.

      24.8 EVENTS AFTER THE REPORTING DATE

      The Board of Directors authorised the 2020 consolidated financial statements for issue on 11 March 2021. These also have to be approved by the General Meeting of Shareholders.