Letter to shareholders

Dear Shareholders, Dear Sir or Madam

We are pleased to report on a successful year. A particular highlight was the airport festival at the beginning of September which attracted some 140,000 visitors. Under the theme of “Yesterday, Today, Tomorrow”, we celebrated the 75th anniversary of our airport in true style. Demand for air travel is high. It picked up during 2023 even more quickly than was expected at the outset of the year, with an upward adjustment of passenger guidance already in August. This growth had a positive impact on recovery in our commercial centers too. We are also pleased to report further tenancy signups in the Circle and continuing high occupancy rates there.

GRI 2-22

We succeeded in further expanding our international presence over the past year, being awarded the operating licence for Natal Airport in northeastern Brazil. The construction project for Noida Airport in India passed further milestones, while declarations of intent for operating routes from this airport were signed with IndiGo Airlines, Indiaʼs largest airline, and Akasa Air.

In 2024 we plan to focus on delivering the quality demanded by our passengers, customers and partners. Along with various construction projects and digitalisation initiatives in the divisions, with the launch of our ZRH Innovation Hub, Zurich Airport Ltd. has further invested in enhancing the customer experience and developing operational processes at Zurich Airport. We will continue to drive forward measures to achieve net zero by 2040.

Faster than expected recovery

Passenger volumes during the past year were a reflection of many people rediscovering the joy of travel and the demand for international mobility. The number of passengers who travelled via Zurich Airport rose to 28.9 million in 2023. This is equivalent to 91.7% of the level in 2019.

The diversification of our company based on its four pillars of aviation, real estate, commercial and international business continued to prove fruitful in 2023. The significant rise in earnings for the past year can be attributed to increased revenue from both aviation and non-aviation business. For example, due to our expansion into the Circle and acquisition of the Priora portfolio, real estate revenues were significantly higher than pre-Covid levels, while our international subsidiaries also contributed higher revenues. Despite the recovery in demand, inflation and rising energy prices, we succeed in keeping operating costs well under control in 2023.

Payment of a dividend in line with the communicated dividend policy will be proposed to the Annual General Meeting.

Operational challenges

The swift recovery of demand on the aviation side of the business created major challenges for Zurich Airport: the ramping up of operations after the pandemic led to longer queuing times on the ground and delays in the air, especially during holiday periods. Targets for flight punctuality were missed. However, closely coordinated measures undertaken together with partner companies at Zurich Airport proved effective over the course of the year.

Nevertheless, it is the extension of runways 28 and 32 that will ultimately have the greatest long-term impact on the safety and reliability of flight operations, and consequently on punctuality. With the clear “Yes” vote, the electorate once again expressed its confidence in Zurich Airport.

Responsible corporate governance

Our company greatly values open dialogue and collaborative relationships with all its stakeholders. We continued to actively maintain these relationships at all levels throughout the reporting year. During 2023, the Government Council of the Canton of Zurich underlined the significance and relevance of Zurich Airport with a new airport policy and owner strategy in which it called for both a safe, competitive airport as well as for protecting residents from the impact of aviation operations.

A further important focus of our responsibility is our role as an employer. Around 30,000 people work for some 300 companies at Zurich Airport. This makes the airport and all its partner companies one of the most important job providers in the Canton of Zurich. We are pleased that Zurich Airport Ltd. continues to enjoy great popularity both in employer rankings and employee surveys. Our motivated and committed employees are our most important assets.

During the year under review, following a change in the general understanding of corporate governance, the Board of Directors of Zurich Airport Ltd. decided to change its practice of making financial donations to political parties. The Group Code of Conduct of the Zurich Airport Group was revised accordingly in October 2023.

The principles of the UN Global Compact, which we signed up to in 2021, remain the framework for all our business activities. Responsible corporate governance is of paramount importance to us, as is the exercise of our social, business and environmental responsibilities.

Looking to the future

The impact of aviation on the environment remains a challenge for our company too. As Zurich Airport Ltd. we are working hard on decarbonising our infrastructure and reducing our own greenhouse gas emissions to net zero by 2040. In the case of the companyʼs own CO2 emissions at Zurich Airport, by far the majority are attributable to heating and cooling the airportʼs infrastructure. We are therefore focusing on reducing energy usage, improving efficiency and utilising innovative technologies to produce emission-free electricity, space heating and cooling. One important project concerns investigating the use of an ice-age channel running under the airfield. This made excellent progress last year, and if it proves viable, the channel will serve as a natural energy store for heating and cooling our buildings. A further declaration of intent signed during the year under review affirmed our intention to purchase renewable fuel from Swiss ETH spin-off Synhelion, helping both to spur the transition from fossil to renewable energy sources and support the production of sustainable fuels.

A number of major infrastructure projects are necessary to ensure the future viability of Zurich Airport. The ageing Dock A will be replaced from 2030. The passenger areas in Airport Shopping also no longer meet modern standards and will be upgraded. In addition, the vital runway extension project will fortunately now be able to proceed, following approval by Zurich voters. Owing to the complex procedures involved, however, it will effectively not be possible to complete the runway extensions within the current decade.

Changes at the top

Various key management positions changed during the year under review. Josef Felder was elected as the new Chairman of the Board of Directors at the Annual General Meeting, and Claudia Pletscher was elected as a new board member. We said farewell to long-serving Chairman of the Board Andreas Schmid and to appointed delegate of the Canton of Zurich Eveline Saupper, who was replaced by Beatrix Frey-Eigenmann. Following the resignation of Stephan Widrig, Lukas Brosi stepped up to become our new CEO in May 2023. Acknowledged financial expert Kevin Fleck was recruited to fill the resulting vacancy as Chief Financial Officer. Our new Chairman of the Board of Directors and new CFO joined the CEO to meet with Zurich Airport Ltd.ʼs investors and analysts at our Investor Day held at the beginning of September 2023.

Thanks and outlook

Zurich Airport serves the mobility needs of society. Its development is closely intertwined with population and economic growth in Switzerland. The demand for mobility is steadily growing worldwide, and with it the demand for air travel. Connecting Switzerland to the most important European and intercontinental destinations is vital for our country. At the same time, direct flights should by no means be taken for granted. Only a well functioning hub at Zurich Airport can enable direct links to global destinations. Our infrastructure projects are designed for the long term and with sustainability in mind. In all our activities and decision-making we must maintain a global perspective so we can continue to fulfil our mission of connecting people and places. We provide efficient modern infrastructure with high safety standards. We must endeavour to maintain and further enhance this high quality.

We sincerely thank our shareholders for the support and trust you have placed in us over many years. We also extend our thanks to our partner companies, and especially to all our employees. Their extraordinary commitment during the past year enabled us to provide our customers with a smooth travel experience during a very challenging phase of rapidly rising demand and resource shortages.

We look forward to continuing the journey together.

Josef Felder
Chairman of the Board of Directors

Lukas Brosi
Chief Executive Officer