24 Other disclosures

24.1 Information concerning the performance of a risk assessment

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.

Zurich Airport Ltd.’s risk management system is the tool used to manage corporate risk across the Group. It consists of the following elements:

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

The central Risk Office reports to the CFO as Chief Risk Officer and stipulates minimum requirements for decentralised risk management across the Group. The central Risk Office is responsible for risk reporting as well as for 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 respective divisions. They bear responsibility for identifying, assessing and managing the relevant risks (risk owner concept).

In consultation with the Group Risk Office, other departments 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 Zurich Airport Ltd.’s international subsidiaries. The key risks to the Zurich Airport Group are then incorporated from these into central risk reporting. This describes the business risks, responsibilities and measures in detail, along with an assessment of their probability of occurrence and potential impact. 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, the Zurich Airport Group is exposed to the following relevant financial risks, including:

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 Zurich Airport Group. Further information on financial risks can also be found in the corresponding notes.

i) Credit risk

Credit risk refers to the risk that the Zurich Airport Group could incur financial 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.

The Zurich Airport Group invests its cash and cash equivalents and fixed-term deposits with major banks with a rating indicating their solvency. In addition, the Group minimises potential 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 at Zurich Airport, credit risk is distributed over a broad clientele. Trade receivables include an amount of CHF 22.4 million (previous year: CHF 19.4 million) due from SWISS (see note 14, Trade receivables). In the period between the reporting date and the preparation of the 2024 consolidated financial statements, SWISS paid the outstanding amount arising from flight operations charges as at 31 December 2024 in full.

The exposure to credit risk primarily depends on the individual characteristics of each client. Risk assessments include a creditworthiness check, taking account of the client’s 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 (mainly proforma invoicing) are applied, or security is requested (mainly in the form of bank guarantees).

The financial assets of the Airport Zurich Noise Fund are invested by professional financial institutions on the basis of a conservative, money market-oriented investment strategy and mainly in fixed-rate bonds. 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 Zurich Noise Fund and averages around four years. For bonds held directly, the minimum acceptable rating is A- (Standard & Poor’s) or an equivalent rating from another recognised rating agency (see note 20, Airport 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:

ii) Liquidity risk

Liquidity risk refers to the risk that the Zurich Airport Group may not be able to meet its financial obligations on the due date.

The Zurich Airport Group monitors liquidity risk via a prudent liquidity management process, observing 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. In addition, the Zurich Airport Group had the following principal credit facilities at its disposal at the reporting date:

The following tables show the contractual maturities of the financial liabilities (including interest payments) held by the Zurich Airport Group:

iii) Market risk (currency and interest rate 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 reporting currency for the consolidated financial statements of the Zurich Airport Group and the functional currency of Zurich Airport Ltd. is the Swiss franc (CHF). The Group is exposed to foreign currency movements primarily in the Brazilian real (BRL), the Chilean peso (CLP) and the Indian rupee (INR).

A 5% appreciation or depreciation in the value of the Swiss franc against the relevant currencies as at 31 December 2024 would have increased or reduced consolidated equity (“Other comprehensive income”) or the consolidated result by the amounts below. This analysis assumes that all other variables – in particular interest rates – remain unchanged.

iiib) Interest rate risk

Interest rate risk can be divided into an interest-related cash flow risk (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 (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 Zurich Noise Fund are primarily invested in fixed-rate debt instruments. 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. Interest rate risk on variable liabilities is hedged on a case-by-case basis using interest rate swaps.

As at the reporting date, the Zurich Airport Group’s interest rate profile was as follows (interest-bearing financial instruments):

The table below shows the sensitivity analysis for variable and fixed-rate financial instruments with a deviation of 0.5%:

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:

c) Fair value 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.

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 Zurich Noise Fund: The fair value of the bonds corresponds to the market price of the securities at the reporting date (level 1).

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

d) Capital management

With respect to capital management, the Zurich Airport Group pays particular attention to ensuring the continuation of the Group’s operating activities, achieving an acceptable return for shareholders and optimising the balance sheet structure, particularly in periods of major investment activity or after crises. In order to achieve these objectives, Zurich Airport Ltd. can adjust the amount of the dividend payment.

The Zurich Airport Group 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. 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 staff participation and bonus programmes. It is not permitted to accumulate several yearsʼ worth of treasury shares for the purpose of participation 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 at the Zurich site amounted to around CHF 287 million in total. The most significant capital commitments currently relate to the development of the landside passenger zones (CHF 70 million), development of the main airport complex (CHF 62 million) and the Zone West apron extension (CHF 47 million). Capital commitments for the development and implementation of Noida International Airport in New Delhi, India amounted to around CHF 270 million.

24.3 Contingent liabilities

Zurich Airport

A number of legal proceedings and claims against the Zurich Airport Group 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 the Zurich Airport Group.

Depending on future legal judgements, including with respect to the southern approaches at Zurich Airport, noise-related liabilities may in future be subject to substantial adjustments, which would also require adjustments in the balance sheet. At the present time, a definitive assessment is not possible.

Zurich Airport Ltd. 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.

International

As part of its involvement in the expansion and operation of the airport in Belo Horizonte, Brazil, the Zurich Airport Group provides a guarantee as security for local debt financing in the amount of CHF 14.7 million (previous year: CHF 19.9 million).

The Zurich Airport Group has entered into the following counterbonds for other guarantees (e.g. performance or bid bonds) provided to local authorities by the operators:

24.4 Related parties

Related parties are:

a) Transactions with related parties

In the reporting period, the costs for the Canton of Zurich police force amounted to CHF 104.2 million (previous year: CHF 92.4 million) in accordance with the applicable service level agreement. In this context, accrued expenses amounting to CHF 26.6 million (previous year: CHF 24.1 million) at the reporting date were included in note 23, other current liabilities, accruals and deferrals.

In the reporting period, Zurich Airport Ltd. paid employer contributions amounting to CHF 20.8 million (previous year: CHF 18.8 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 (previous year: CHF 2.7 million) of this was still included in note 23, other current liabilities, accruals and deferrals.

In financial year 2024, consulting revenue from operations and management agreements amounted to CHF 3.2 million (previous year: CHF 2.5 million) for the airports in Bogotá and on Curaçao.

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:

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

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:

24.5 Composition of the Group

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

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

24.6 Notes on the licence to operate Zurich Airport

The Swiss Federal Department of the Environment, Transport, Energy and Communications (DETEC) awarded Zurich Airport Ltd. 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 Organization) governing domestic, international and intercontinental civil aviation services. Zurich Airport Ltd. 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, Zurich Airport Ltd. 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. Zurich Airport Ltd. 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 Zurich Airport Ltd.

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 ground handling 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 Zurich Airport 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, the Zurich Airport Group was responsible, via its majority interests, for the operation and expansion of the following foreign airports:

Brazil

Chile

India

24.8 Events after the reporting date

The Board of Directors authorised the 2024 consolidated financial statements for issue on 6 March 2025. These also have to be approved by the Annual General Meeting.