Letter to shareholders

Dear Shareholders, Dear Sir or Madam

Various construction projects at the airport called for adjustments to operations and a high degree of flexibility on the part of partner companies and passengers. The delay situation was unsatisfactory last year, particularly in the summer months. The measures taken in conjunction with our partners yielded the desired effects from the autumn in particular. That said, the situation remains challenging as the steps offering greater leverage – e.g. adjustments to flight routes – have been stuck in legal approval processes for years. Runway extensions, which improve not only safety but also punctuality, have passed an important hurdle with the approval of the referendum during the reporting year. A lengthy legal process, extending to a number of years, will also be need to be completed before it is realised.

Growth in passenger volume and challenging flight operations

The desire to travel remains undiminished. In 2024, passenger volume largely returned to pre-pandemic levels despite the lower number of flight movements. This shows that aircraft capacity utilisation has increased in tandem with the greater deployment of larger aircraft. In May, passenger volume exceeded the pre-crisis figure for the first time on a monthly basis. The rising volume of traffic led to new highs in terms of revenue, earnings and consolidated result.

We are proud to have received numerous international awards testifying to our quality and innovativeness. Thus, we were again named best European airport in our category last year. As well as this, our website was acknowledged as the best airport website worldwide for the first time. These successes are encouraging us to continue investing in excellence and the technologies for the future. Moreover, each international award strengthens our competitive position in global aviation.

Zurich Airport is operating in an increasingly densely populated and attractive residential and business region. Accordingly, the acceptance and trust of the people of the Canton of Zurich and beyond are of crucial importance. By clearly voting in favour of the runway extensions last year, the local population not only approved this important improvement to safety but also placed its trust in Zurich Airport and confirmed its role as an important transport hub and its status as a business driver. However, the pressure on the Airport remains strong: with the so-called “Nighttime peace initiative”, flight noise organisations are trying to have the airport operating hours shortened even further. As is demonstrated by expert legal reports, the initiative violates overarching federal law in various respects, and is considered by expert legal reports to be invalid. As the Canton lacks regulatory competence, it is therefore making false promises to the general public. Aside from the issue of validity, the restrictions called for by the initiative would have a massive impact on international flight connections and the standing of the Swiss economy. Zurich Airport operates from 6:00 to 23:30, which includes a time window between 23:00 and 23:30 to accommodate delays. These are already the shortest operating hours of any comparable airport in Europe. Any further restriction on operating hours would substantially impair Switzerland’s accessibility and competitiveness, in part because this would make it impossible to serve vital long-haul destinations. In discourse with political decision-makers and the general public, we highlight the importance of good international accessibility for Switzerland, simultaneously emphasising the measures that we are taking to improve punctuality and, thus, for ensuring observance of the night-time curfew more effectively.

One milestone that we achieved last year was the introduction of the roll-over mechanism for airport charges, which was adopted following the revision of parts of the Ordinance on Airport Charges. These regulatory adjustments have increased the prospects of a consensus being reached in the negotiations, while ensuring greater long-term planning reliability for all stakeholders.

Commercial centers and real estate business performing well

Despite occasional restrictions as a result of construction projects, retail and restaurant business performed consistently well. The higher revenues confirm the attractive range of offerings and the high quality of our location. In addition, partnerships with new brands such as Zegna were successfully launched. As well as this, the systematic alignment of the Circle as a business and services hub is proving itself. Real estate business across the entire airport perimeter is continuing to make a material contribution to our company’s overall success. By expanding and modernising our real estate assets, we are not only stabilising our income but also enhancing the long-term value of the portfolio.

International growth

Last year, our international holdings and subsidiaries again made an important contribution to the company’s overall success and are continuing to grow in significance. Of particular note is the project in Noida, which is scheduled to go into operation in 2025. The construction of this airport for the greater Delhi region shows impressively how our international business is contributing to long-term growth. Demand for air travel in our focus markets is expanding at an above-average rate, offering a stable basis for further growth. Our foreign activities are helping us to diversify our business model and, thus, to strengthen our company.

Sustainability as a basis

A further key aspect of our activities last year concerned our commitment to sustainable flight operations. As the operator of the largest airport in Switzerland, we have a particular responsibility. We are pursuing our goal of achieving net zero greenhouse gas emissions by 2040 without any offsets with a defined carbon reduction plan. This plan rests on the following pillars: “reduction in energy consumption in buildings”, “greater volume of electricity produced by photovoltaic arrays”, “adoption of electromobility” and “use of renewable sources of energy”. The latter is being driven forward with the pioneering “glacial channel” project, among other things. The purpose of this project is to explore the scope for using a subterranean geological channel as an energy store for heating and cooling.

Investing in the future

Our dedication to innovation and efficiency is also reflected in the creation of the ZRH Innovation Hub. This is a platform that we created last year to develop new ideas. The Innovation Hub is a think tank and also serves as a forum for joint activities with our partners, start-ups and research institutions. It marks a clear commitment for an airport that is taking a proactive approach in its response to future challenges.

In addition to infrastructural and technological advances, such as the use of artificial intelligence, we require skilled and satisfied employees to ensure our continued viability in the future. For this reason, we took various steps last year to further enhance our appeal as an employer, particularly in shift work. We set up an innovative leadership programme, as well as, to develop the skills of all our teams and boost resilience. The ongoing education and upskilling of our employees form a central element of our strategy to respond successfully to the challenges facing us in the future.

Challenges to the further development of the airport

In addition to the geopolitical situation and weather phenomena, major infrastructure projects such as the replacement of the baggage sorting system and the development of the landside passenger zones are making great demands of us. Both projects must be completed during “live” operations and call for a high degree of commitment on the part of our employees and all partner companies. The same thing applies to the construction of the replacement of the existing Dock A and the overall development of the main airport complex. These investments are necessary to safeguard our position as an attractive, reliable and high-quality international airport as we move forward.

The expansion of the route network and the addition of new airlines last year testify to the fact that Zurich continues to be valued as an attractive airport. We remain committed to maintaining our standards of quality and to continuously improving punctuality. To this end, we are working together with our partners and engaging in a discourse characterised by a spirit of mutual trust with all stakeholder groups.

Guiding strategic principles fine-tuned

Last year, we fine-tuned our guiding strategic principles. In doing so, we fundamentally reaffirmed our business model and defined the following five target dimensions: “Business development”, “Economics”, “Innovation & efficiency”, “Quality & customer experience” and “ESG”. By defining measurable performance indicators aligned to these dimensions, we can additionally improve our company’s governance and set our priorities more systematically. We are convinced that this greater strategic focus will enable us to continue securing our business success as we move forward, additionally strengthen our competitiveness and make a positive contribution to sustainable development.

Change in the Board of Directors

Vincent Albers, the delegate appointed by the Canton, has resigned from the Board of Directors of Zurich Airport Ltd. after ten years in post. The company would like to thank Vincent Albers for his major commitment. Dr. Beat Schwab will take up his appointment as a member of the Board of Directors on 1 May 2025 as the representative of the Canton. Beat Schwab will be proposed to the Annual General Meeting for election as a member of the Nomination & Compensation Committee. He has many years of experience in the field of operational and strategic management.

Thanks and outlook

2024 was a year of challenges and also many encouraging developments. Our employees stood at the core of these successes. With their commitment and skills, they made a crucial contribution, allowing us to achieve so much together. For this reason, they deserve great gratitude and appreciation.

Finally, we would like to thank you, our valued shareholders, for the trust you have placed in us. We invite you to continue with us in 2025 on the course on which we have embarked.