Letter to shareholders

Dear Shareholders, Dear Sir or Madam

The first half of 2024 proved eventful for Zurich Airport. The clear vote of confidence on the part of the population of the Canton of Zurich in the runway extension referendum of 3 March is strengthening us in our resolve to systematically take measures to improve flight operations and to develop our infrastructure. The result of the referendum shows that the population stands behind their airport. There is a strong desire to travel, with passenger volume recovering on a sustained basis. Passenger volume in the first half of 2024 is up 11% on the same period of the previous year, reaching 97% of the figure for 2019. In addition to aviation, non-aviation business segments also made a decisive contribution to our good business performance. Revenue from commercial activities, real estate business and our international holdings rose again over the previous year. The Circle was also able to become more firmly established, reinforcing its position as a business and service hub.

Investments in quality and the future

We are delighted that Zurich Airport received further awards this year. It ranked top again in its category with both the Airport Service Quality (ASQ) Award and the World Travel Award. At the same time, we are investing roughly one million francs per working day in our existing infrastructure to preserve the high quality standards at Zurich Airport as we move forward. Work on the development of landside passenger areas is in full swing and will expand retail and dining offerings through the addition of numerous attractive shops, restaurant and bar zones as well as improved integration of the Circle. The new baggage sorting technology ensures that baggage routing continues to operate reliably and that security checks comply with the new EU regulations. In the first half of the year, work also commenced in the east of the Airport on the construction of the new and modern Rächtenwisen cargo building, which addresses the trend toward special freight.

Driving forward our sustainability efforts and achieving net zero greenhouse gas emissions by 2040 remains one of our top priorities. We are exploring innovative approaches for replacing fossil fuels, scaling up the use of recycled concrete in our construction projects, continuing plans for the first dock made from wood and adding electric vehicles to our fleet step by step.

However, our plans for the future are not confined to ecological aspects but also include the technological opportunities waiting to be harnessed. In the first half of the year, the ZRH Innovation Hub put structures and processes in place and has already launched its first product in the form of an app for the Apple Vision Pro for marketing real estate. By leveraging the ZRH Innovation Hub, we want to utilise the advantages of the digital transformation for ourselves and for our partners, explore innovative approaches for fresh solutions and implement new technologies at Zurich Airport.

Moreover, we are awaiting the commencement of operations at the airport in Noida with great excitement and anticipation. Construction work on Zurich Airport Ltd.'s largest foreign project in the greater Delhi region is entering its final phase. Noida International Airport will be ready to go into operation as this city's second airport at the end of April 2025.

Operational challenges

The introduction of the new Schengen entry/exit system (EES) has called for minor structural adjustments over the last few months and particularly also extensive process-related and operational preparations. From an expected starting date in October 2024, entries and exits as well as the biometric data of travellers from non-Schengen third countries will be recorded electronically in a dossier and stored centrally. This will result in changes to entry/exit processes.

The weather and the geopolitical situation also pose operational challenges. The complex runway system at Zurich Airport means that operations are very vulnerable in changeable weather conditions. Strong westerlies, particularly the Bise winds, necessitate a considerable reduction in capacity, which can quickly cause delays. This is exacerbated by the geopolitical situation, which is impacting flight routes and adversely affecting flights to and from Asia. In 2023, the punctuality rate at Zurich Airport hit a historical low. However, the delay situation improved again prior to the first months of summer thanks to various measures that had already been taken or are currently still being implemented in consultation with all relevant partners. Reducing delays remains a top priority. In the long term, this calls for the completion of infrastructure projects and adjustments to flight routes. Although the corresponding requests were submitted years ago, it has not yet been possible to implement them due to lengthy decision-making processes, particularly at the federal level.

We are strictly opposed to calls by citizen groups for a further reduction in the Airport's operating hours in the interests of longer night-time curfews. Zurich Airport operates from 6:00 am to 11:30 pm including a time window between 11:00 pm and 11:30 pm to accommodate delays. These are already the shortest operating hours of any comparable airport in Europe. Even shorter operating hours would have a considerably adverse effect on Switzerland’s competitiveness and international links. In our discourse with political decision-makers and the general public, we highlight the importance of good international accessibility for Switzerland, simultaneously emphasising the efforts that we are taking to improve punctuality and observing the existing night-time curfew.

Outlook and thanks

We would like to thank all parties involved for their support in connection with the referendum on the runway extensions. Looking forward, we remain committed to providing a competitive hub offering attractive links between Switzerland and the rest of the world. In this context, open dialogue with all stakeholders and ongoing efforts to arouse awareness of the role played by Zurich Airport for all of Switzerland are of crucial importance.

Zurich Airport remains a central hub and a key element of the Swiss economy. With our innovations and our commitment, we will continue to make our contribution to more sustainable needs-oriented mobility. We thank you sincerely for your trust and support.