Risk and compliance management

Risk management system

Risk management as a management and leadership tool

The risk management system of Zurich Airport Ltd. is the established tool used to manage risk across the Group, providing the basis for the structured, sustainable and transparent management of corporate risks. The overarching goal is to ensure the long-term existence and profitability of the company and to effectively promote the implementation of the corporate strategy. It consists of the following elements:

The Board of Directors and the Management Board hold overall responsibility under Swiss company law for ensuring the continued existence and profitability of Zurich Airport Ltd. In this context, the Board of Directors is responsible for the overall supervision of risk management, while the Audit & Finance Committee also monitors the effectiveness of the risk management system. As Chief Risk Officer (CRO), the Chief Financial Officer (CFO) is the risk management officer of the Management Board.

The Group Risk Office reports to the Chief Financial Officer as the Chief Risk Officer and sets minimum requirements for decentralised risk management across the Group. Moreover, the Group Risk Office is responsible for risk reporting as well as for the operation and continued development of the risk management system.

The respective members of the Management Board are responsible for the risks assigned to their area of responsibility. They bear responsibility for identifying, assessing and managing these risks (risk ownership concept).

As part of the Group-wide risk management of Zurich Airport Ltd., a structured risk self-assessment is carried out twice a year. The respective risk owners are obliged to assess the risks assigned to them, identify changes, report new risks and document the progress made in implementing the defined measures. The Group Risk Office oversees and supports this process and evaluates the results centrally.

The results of the risk self-assessment are discussed and approved by the Risk Committee, which is chaired by the Chief Risk Officer. Consolidated risk reporting is presented once a year to the Management Board and the Board of Directors.

External benchmarking is carried out regularly with an independent partner in order to continuously develop risk management and ensure that new and changed risks are dealt with appropriately. In addition, a company-wide survey on the risk landscape is conducted annually to obtain additional assessments and ideas from the organisation.

Current risk situation

The current risk situation for the Zurich Airport Group is characterised primarily by the following risks:

1. Regulatory uncertainties at Zurich Airport

1.1. Airport charges

Zurich Airport Ltd. is regulated with regard to the charges it levies for the use of the monopolised infrastructure. In a normal year, the regulated charges amount to around 50% of revenue. The Swiss airport charges regulation is based on EU-wide regulation but additionally includes specific stipulations for airport charges at Swiss airports. There is consequently a risk that regulatory requirements may be tightened or that charge-setting procedures may place Zurich Airport Ltd. at a disadvantage, which would endanger the amount of the regulated revenue. The airport charges regulation was modified in financial year 2024 to allow for surplus revenue and revenue shortfalls from airport charges to be carried forward to the following charge period. In this way, the risk of revenue shortfalls has been mitigated, while the opportunity for surplus revenue has been reduced (roll-over mechanism). The procedure for the regular adjustment of airport charges was launched in April 2025. The new charges are expected to be set in the second half of 2026.

1.2 Regulation governing the use of southern German airspace

The use of southern German airspace is presently regulated by an implementing regulation (DVO) issued unilaterally by Germany. On 4 September 2012, Switzerland and Germany signed an international aviation treaty. This international treaty must be ratified by both countries. In Switzerland, the Federal Assembly approved the treaty, while ratification was suspended in Germany. There is no schedule for ratification in Germany. Germany could also unilaterally change the implementing regulation (DVO), which could lead to additional capacity restrictions at Zurich Airport.

1.3 Capacity restrictions

The complexity of the runway and taxiway layout, the take-off and approach routes and various operational regulations at Zurich Airport is considerable. Following the near collision of two aircraft at the runway intersection in 2011, Zurich Airport Ltd., Skyguide, SWISS and the Swiss Air Force prepared a comprehensive risk report with the assistance of the Federal Office of Civil Aviation (FOCA) and the Department of the Environment, Transport, Energy and Communications (DETEC) in 2012. In addition, various measures aimed at improving safety were implemented or are in the process of being implemented. However, until key measures are implemented, there is still a risk that capacity may be restricted due to safety considerations and that business performance may be negatively impacted as a result. The planned taxiway around runway 28 will spatially separate inbound and outbound aircraft for the most part. This will avoid more than 100,000 crossings over runway 28 each year. The planned extensions to runways 28 and 32 will also enable more stable operations in all weather conditions and for all aircraft types.

1.4 Noise levels (during shoulder periods and at night)

The permitted noise emissions (“permitted noise”) were defined in law by FOCA in 2015 but are based on an obsolete forecast from 2003 for the year 2010. During the day, the permitted noise level is adhered to in residential areas around the airport. However, after 22:00, it is exceeded to a considerable extent in some cases. If it is not possible to significantly improve compliance – for example through measures to prevent delays or as a result of changes to the permitted noise levels as already requested by the company – there is a risk of operational restrictions. Zurich Airport Ltd. is actively working to improve the situation through amendments to the Federal Aviation Act and the Sectoral Aviation Infrastructure Plan, as well as in ongoing approval and court proceedings, and also operationally together with its partner companies Skyguide, SWISS, Swissport and the Zurich cantonal police force. If the permitted noise emissions are maintained or were to be tightened even further, this would pose a substantial threat to the airport’s hub operations and to its intercontinental connections, especially from 22:00 onwards. As a consequence, numerous connecting feeder flights would also disappear.

2. Decline in demand/disruption due to external influencing factors

Experience over the past few years has shown that the air transport sector is sensitive to external events such as economic crises, acts of terrorism or pandemics. In addition, other external factors such as the political and macro-economic environment could have a negative impact on demand in both the aviation and non-aviation segments.

2.1 Geopolitical uncertainties

Geopolitical uncertainties could seriously impact airport operations, especially if they caused a slump in air travel as a result of security concerns, unpredictable political situations or a drop in spending power for example. Embargoes, such as cancelled flight routes for instance, could also have serious consequences for connections. Furthermore, restrictions in airspace, for example due to temporary restricted zones, rerouting and capacity constraints, can result in longer flight times and significantly impact punctuality.

2.2 Energy shortages at the Zurich site

Energy shortages can severely impact operations at Zurich Airport. However, it can be assumed that, as key infrastructure, operation of the airport would be prioritised even in the event of power cuts or rationing. Moreover, Zurich Airport Ltd. has recourse at its Zurich site to various forms of energy that would enable it to maintain its own operations, albeit at a much-reduced level.

However, as Zurich Airport Ltd. is heavily dependent on external partners such as Skyguide, handling agents and telecommunications service providers, there is no certainty that aviation operations can be maintained even if Zurich Airport Ltd. is given priority.

2.3 Pandemics and epidemics

A pandemic could have severe company-wide effects, starting with a significant reduction in air traffic due to border closures, quarantine requirements and a lack of internationally coordinated action to tackle the pandemic. In addition, authorities could order businesses to close, which could have an appreciable impact on retail partners and therefore on the related revenue of Zurich Airport Ltd. In the event of large-scale employee absences due to illness or quarantine, it cannot be guaranteed that labour- intensive activities will be carried out to the usual quality standard.

2.4 Natural hazards

Zurich Airport Ltd. is constantly adapting to foreseeable developments resulting from climate change such as the general rise in temperatures, more extreme periods of heat and drought, changes in the patterns and intensity of precipitation and wind, or shortages of renewable resources. Such developments are always taken into account when planning upgrades and extensions, for example to drainage systems, cooling plants or even handling processes.

It must be assumed, however, that climate change will also result in an increase in one-off events. These include flooding following heavy rainfall. Wherever possible and cost-effective, property and business interruption insurance is taken out to mitigate the resulting financial risks. The same applies to risks from other events not caused by climate change such as earthquakes.

2.5 Suppliers and customers at the Zurich site

The home carrier at Zurich Airport flies over half the passengers who travel via Zurich Airport. SWISS, in turn, is integrated into the Lufthansa Group along with other airlines that offer hub systems at various locations. If the home carrier were to experience financial difficulties, a considerable number of long-, medium- and short-haul flights would cease operating. The fact that SWISS is integrated into its parent company Lufthansa increases the risk as it is then also dependent on the situation of other Group companies. In the event of difficulties at these other Group companies, or if political, economic and/or social circumstances change, the parent company could shift capacity between airports.

Zurich Airport Ltd. delegates elements of its licence to operate the airport to ground handling companies by issuing licences for ground handling operations. Zurich Airport Ltd. does not perform any ground handling activities as a matter of principle. Services for passengers with reduced mobility (PRM services) constitute an exception to this and have been provided by Zurich Airport Ltd. since January 2025. Swissport, the largest ground handler at Zurich Airport, commands around 80% of market volume in the main ground handling activities (passenger and ramp handling). If the market leader were to cease operating, Zurich Airport Ltd. would have to ensure the proper continuity of airport operations, including ground handling.

3. Interruptions to business due to operational events and IT systems failure

Given their tightly interconnected complexity, airport operations could be severely disrupted by operational events such as accidents or the failure of critical systems. Depending on the scale of the disruption, operations would have to be curtailed or even suspended altogether in order to maintain the safety of passengers and airport employees.

Nowadays, the majority of Zurich Airport Ltd.’s workflows and processes cannot be carried out properly without the aid of IT systems. A serious system failure could lead to the loss of personal, business-critical and/or confidential data. Such a scenario could result in major operational problems or even accidents. There is also the risk of severe interruptions to business that could conceivably last several weeks, with a concomitant loss of revenue on top of the costs for restoring operations.

4. Infrastructure investments

As part of the long-term development and modernisation of Zurich Airport, Zurich Airport Ltd. invests in extensive infrastructure projects, in particular the construction of the new Dock A, the tower and other central installations at the main airport complex. Inherent risks are associated with the implementation of major projects that can potentially influence different project phases.

Delays in or increased costs for planning and implementation represent one key risk. These may be caused by supply bottlenecks for key building materials, unexpected price increases on the procurement market or inadequate control of complex construction processes, for example. Delays in completion or significant additional costs can affect the timely commissioning of new infrastructure and impact the implementation of strategic objectives. In addition, there is a risk that transport demand cannot be handled as planned and that the competitiveness of the Zurich site will be temporarily restricted.

To limit these risks, Zurich Airport Ltd. engages in professional project management with clear responsibilities, ongoing market monitoring and carefully coordinated tendering and award procedures. Measures are also being implemented to diversify the supplier base and actively manage costs and deadlines. Unforeseen costs are financed from planned reserves, and the implementation of projects is monitored on an ongoing basis through continuous cost controlling and transparent reporting.

5. International business

In addition to the risks already mentioned, projects abroad and international holdings inherently pose commercial and sector-specific risks comparable with those associated with operating Zurich Airport. Along with political risks, location-specific risks typically include country, market and currency risks as well as other regulatory and legal conditions that could severely impact future revenue prospects or even lead to the total failure of a venture.

When considering projects, both the financial risks and the political and economic risks are analysed in detail against the backdrop of the prevailing social and economic conditions. They are also continually monitored for existing activities. The same standards as practised at Zurich Airport apply.