Financial commentary

Zurich Airport suffered a historically unprecedented slump in traffic as a result of the pandemic: 8.3 million passengers passed through Zurich Airport in 2020, a fall of 73.5% compared with the previous year. Over the same period, Flughafen Zürich AG generated 48.4% less revenue, which amounted to CHF 624.0 million. The consolidated loss for the financial year just ended amounted to CHF 69.1 million.


As a result of the slump in passenger numbers, aviation revenue in the financial year just ended plummeted from CHF 661.5 million to CHF 221.7 million (–66.5%).

Flight operations charges fell by CHF 394.0 million to CHF 190.5 million (–67.4%). Total income from aviation fees and other aviation revenue declined by CHF 45.7 million overall to CHF 31.2 million (–59.4%).

The fact that aviation revenue did not decline as steeply as passenger volumes is because not all charges are linked to the latter. For instance, it is the number of flight movements that affects landing charges.

Overall, non-aviation revenue decreased by CHF 146.3 million to CHF 402.3 million (–26.7%).

Compared with the previous year, total commercial and parking revenue fell by CHF 82.9 million to CHF 169.8 million (–32.8%). In relation to commercial revenue, no rent was charged during the approximately two-month lockdown imposed by the authorities in the spring and again for some days in December 2020. In addition, further rent concessions for the post-lockdown period were discussed with the commercial partners concerned and solutions were found with most lessees. Rent concessions were capitalised in accordance with IFRS 16 and will be amortised over the term of the respective contracts.

While commercial and parking revenue declined significantly as a result of the crisis, earnings from facility management grew by 12.5% to CHF 140.9 million. This increase is chiefly attributable to the purchase of a total of 36 buildings and land owned by Priora Suisse AG at the end of 2019. The first rental income from the Circle also contributed to this positive growth. The crisis highlighted in particular the increasing importance of real estate business as a stabilising influence on overall revenue.

Revenue from services fell to CHF 28.2 million (2019: CHF 44.1 million). The drop in revenue from international airport business to CHF 63.4 million was due in particular to a fall in revenue from construction projects (concession accounting), which correlates with the reduced investment activity. The Brazilian airports Vitória and Macaé, which were taken over at the beginning of 2020, generated revenue for the first time.


Compared with the previous year, operating expenses decreased by 24.7% to CHF 428.0 million. The prior-year cost basis was affected in particular by the expansion of the infrastructure in Florianópolis at a cost of CHF  83.4 million. After adjustment for expenses for construction projects, operating expenses fell by 17.3% or CHF 84.0 million in total. Operating expenses in Zurich fell by 17.9%.

Owing to a lower headcount and short-time working payments, personnel expenses for the reporting year decreased by CHF 37.0 million to CHF 179.3 million (–17.1%). The lower costs of CHF 28.3 million (–23.1%) for police and security was mainly attributable to fewer duty hours. It was possible to reduce all other cost blocks likewise. Due to the temporary shutdown of individual parts of the infrastructure, less maintenance work was required, resulting in lower energy consumption.


As an infrastructure company, Flughafen Zurich AG has high fixed costs. Despite considerable efforts, it is therefore not possible to reduce costs in line with the fall in revenue. Earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by CHF 445.8 million to CHF 196.0 million (–69.5%).

Owing to additional writedowns for the property acquired from Priora Suisse AG, along with the first depreciation posted for the Circle, depreciation and amortisation, at CHF 252.6 million, was above the prior-year figure of CHF 238.7 million.

While the net finance result at the Zurich location was virtually unchanged, interest payments increased for subsidiaries abroad. Finance costs for the reporting period included an impairment loss of CHF 3.8 million on a financial interest in Curaçao airport. Overall, at CHF –24.8 million, the net finance result deteriorated by CHF 10.8 million compared with the previous year. The share in the result of associates in the amount of CHF –3.1 million (2019: CHF –2.5 million) reflects the companyʼs share in the result of the Belo Horizonte airport operator.

The consolidated loss for the financial year just ended amounted to CHF 69.1 million.


In the year under review, Flughafen Zürich AGʼs investment in property, plant and equipment, projects in progress and airport operator projects amounted to CHF 398.5 million (2019: CHF 773.2 million), of which CHF 367.6 million (2019: CHF 537.9 million) was invested at its Zurich base. The prior-year figures include the acquisition of buildings and land owned by Priora Suisse AG.

The single biggest project at the Zurich site was the investment in the Circle of CHF 135.5 million (2019: CHF 105.0 million). Other major investment projects were the refurbishment and expansion of the baggage sorting system, the expansion of landside passenger areas and the renovation of the maintenance workshop.


As at the end of 2020, invested capital amounted to CHF 4.3 billion and the return on invested capital (ROIC) was –1.1% (2019: 8.8%). Equity stood at CHF 2.3 billion on the reporting date, still representing a healthy equity ratio of 46.1% (2019: 53.8%). Due to losses, investments in property, plant and equipment, ongoing projects and international holdings, net debt increased to CHF 980.3 million (2019: CHF 728.6 million).

Starting with an operative cash flow of CHF 147.3 million and total investments of CHF 398.5 million in property, plant and equipment, projects in progress and airport operator projects, the companyʼs free cash flow for the reporting period was negative at CHF –251.2 million (2019: CHF –261.5 million).


Already at the end of February 2020 before the pandemic spread to Europe, Flughafen Zürich AG was successfully able to obtain refinancing on the Swiss capital market with a 15-year debenture for CHF 400 million (coupon 0.2%).

A further four-year debenture for CHF 300 million (coupon 0.7%) followed in May 2020 in order, among other things, to refinance the debenture for CHF 300 million due to mature at the beginning of July. The favourable market conditions in December 2020 enabled the company to issue a further debenture for CHF 200 million (coupon 0.1%) for seven years in order to build up additional liquidity reserves. Moreover, as a precaution, the option to increase credit lines to a total of CHF 300 million was exercised at the beginning of 2021.


After initially placing Flughafen Zürich AG’s rating on CreditWatch at the end of March 2020, in mid-July Standard & Poor’s lowered the rating from AA– to A+ with a negative outlook. At the same time, the independent Swiss rating agency fedafin AG continued to rate Flughafen Zürich AG’s creditworthiness as Aa–.


The forecast for the current financial year is still surrounded by a great deal of uncertainty, with passenger volumes in 2021 being primarily dependent on the point at which international travel picks up again. Flughafen Zürich AG is well placed to take advantage of the recovery when it comes: an advantageous passenger mix with a high proportion of travellers flying within Europe and to tourist destinations and a robust Swiss economy constitute favourable conditions.

As well as aviation revenue, commercial revenues remain under pressure for 2021. Thanks to additional income from the Circle, revenue from real estate proved to be extremely stable during the crisis and is set to grow slightly in 2021. A speedier recovery is expected in the case of revenue from international business activities as this is more dependent on domestic travel in the respective markets and will therefore recover more quickly.

Flughafen Zürich AG has taken extensive measures on the cost and investment side. Significant cuts to operating costs – excluding expenses for construction projects – were achieved over the past year. The company expects it will be possible to retain around half of these reductions during the recovery phase. Around 50% of the passenger volume of 2019 is needed to return to profits and generate a positive free cash flow again.

Investment at the Zurich base will amount to approximately CHF 200–220 million this year. As regards investment at subsidiaries abroad, the project in Noida, India is the most significant. If construction starts this year as scheduled, this will add a maximum of approximately CHF 100 million in investments.