European airports operating cost benchmarking, 2010-2014: Quick reference guide

Strategy&'s latest benchmarking study of European airport operators examines operating cost, revenue, EBITDA and passenger numbers between 2010 and 2014 for selected European airports. It analyses key trends in the market over the period and corrects for location specific factors that drive operating costs. This guide is designed to be used alongside the methodology and approach outlined in our previous article "Airport operators' quest for efficiency".

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European airport operating cost benchmarking, 2010–14 Quick reference guide

About the European airport study
This guide summarises a 2015 study of European airport costs, revenues, and operations. It covers a select group of benchmarked operating companies for 21 major European airports (shown at right). It is based on the latest available annual reports — in most cases, those from 2014. It can be difficult to make accurate and representative cost and revenue comparisons, because some European airports are operated by companies that also engage in other businesses and activities, such as real estate and global travel retail. Publicly reported accounts for these operators do not always split out the financial results for these peripheral non-airport activities. This study compensates for these effects by estimating the required operating cost adjustments. Comparisons of airport operating efficiency are also affected by factors specific to each location, such as labour and utility rates. This study corrects for these effects by estimating factor-adjusted operating costs. All values are reported in euros using average 2014 exchange rates. The changes in cost levels over time were calculated in local currency and adjusted for inflation.
Edinburgh-EDI Dublin-DUB London Heathrow-LHR London Gatwick-LGW Manchester-MAN Stansted-STN Luton-LTN Birmingham-BHX

Oslo-OSL Stockholm Arlanda-ARN Copenhagen-CPH Hamburg-HAM Amsterdam-AMS Frankfurt-FRA Brussels-BRU Munich-MUC Vienna-VIE Zurich-ZRH Geneva-GVA

Paris Charles de Gaulle-CDG

Athens-ATH
Group adjustments required and year end 31 March
MAN STN CDG VIE

Group adjustments required
ARN DUB AMS LHR FRA

Year end 31 March
LGW LTN BHX

All other airports reported as stand-alone entities with Year End 31 December.

Passenger traffic by airport (2014, millions)
30 20
35.9 25.6 25.5 24.3 22.5 22.4 21.9 21.7 20.8 18.0 15.2 15.2 14.8 10.5 10.2 9.3

40 50
39.7

Change in passenger numbers, 2010–14
LHR CDG FRA AMS MUC LGW CPH ZRH OSL VIE ARN BRU DUB MAN STN ATH GVA HAM LTN EDI BHX 12% 10% 12% 22% 14% 11% 19% 11% 27% 14% 18% 28% 18% 14% -3% -1% 28% 14% 20% 19% 3%

54.9 59.6 63.8

60

10

70
73.4

LHR CDG FRA AMS MUC LGW CPH ZRH OSL VIE ARN BRU DUB MAN STN ATH GVA HAM LTN EDI BHX

0

The benchmarked airports have experienced strong passenger growth, averaging 15 percent, between 2010 and 2014. However, this rise has been lower than total European passenger volume, which increased by 24 percent (to 1.8 billion travellers per year) in the same period. Total global passenger volume grew higher still, rising by 32 percent (to 6.6 billion passengers/year)1.
1. ACI World Traffic Report, provisional 2014 data.

Operating cost per passenger (2014, €)
19.7 18.6 17.0 14.2 13.8 13.3 13.3 13.1 12.6 12.5 11.9 11.6

10.8 10.8 10.5

9.1

8.8

8.8

7.9

7.3

6.6

Operating cost performance at benchmarked airports varies widely. Expenses per passenger are influenced by each airport’s macroeconomic environment and by differences in operating efficiency.
2

MUC CDG LHR ZRH OSL AMS GVA HAM MAN FRA
1. 2012 data; 2. 2013 data.

2

2

VIE LGW STN ARN LTN CPH BHX BRU DUB ATH EDI

2

1

Changes in operating cost per passenger1 (2010–14)
15% 14%

Most selected European airport operators reduced operating costs per passenger in real terms over the five-year period. They did so, in part, by improving operating efficiency. Growth in passenger volumes also played a significant role. In contrast to operating cost per passenger, total operating cost increased for 14 of the selected airports over this time period.
1%

ARN4 LTN3 OSL MAN STN
-1% -3%

ZRH CDG3 LHR

EDI3 MUC3 FRA

VIE

GVA BRU2 LGW CPH AMS

ATH

BHX HAM

DUB

-4%

-6%

-7% -7%

-7%

-8%

-11% -11%

-12% -12% -12%

-13% -13% -13% -17% -20%

1. Inflation adjusted; 2. 2010–12; 3. 2010–13; 4. 2011–14.

Factor-adjusted operating cost per passenger (2014, €)
Airport operating costs are affected by local factors, such as market prices. To compensate for these, we adjusted estimates for expenses related to personnel, contracted services, and energy and utilities, indexing everything to the United Kingdom3. Figures for every non-U.K. airport except Athens were adjusted down, because of higher personnel and employment costs in these countries relative to the U.K., which outweighed the effect of cheaper energy prices.
3. Indexes calculated using Eurostat.

Delta to unadjusted (€)

-2.5

-

-2.5 -1.0

-

-0.8 -0.8

-

-2.9 -1.3

-

-

-3.4 -2.4 -1.3 +1.5

-

-2.0 -1.1

-

-2.5

17.2 17.0 16.1 12.7 12.6 12.5 12.3 11.6 11.3 11.3 10.8 10.5

9.9

9.5

9.5

8.8

8.8 6.8 6.8 6.6 6.6

MUC LHR CDG OSL MAN AMS HAM LGW ZRH FRA STN LTN GVA VIE ARN ATH BHX BRU DUB EDI
1. 2012 data; 2. 2013 data

2

2

2

1

2

CPH

Revenue per passenger (2014, €)
Airports with the lowest revenue per passenger had the fewest passengers and the lowest aeronautical revenue as a percentage of total revenue. Revenue per passenger was positively correlated with the percentage of transfer passengers, the percentage of premium passengers, and the number of runways. Larger, typically hub, airports have several advantages. Competition for landing space allows them to set tariffs that drive aeronautical revenue, and their larger terminal size can increase non-aeronautical revenue.
43.3 31.8 31.1 30.1 24.4 23.0 22.5 21.9 21.8 21.5 20.8 20.5 20.2 20.0 18.4 17.1 17.0 16.9 15.6 15.3

13.5

LHR MUC ZRH CDG OSL AMS FRA GVA BRU VIE ATH LGW CPH MAN HAM ARN DUB STN LTN BHX EDI
1. 2012 data; 2. 2013 data.

2

2

1

2

2

Changes in revenue per passenger1 (2010–14)
17% 5% Few airports have significantly increased revenue per passenger over the period studied, with the notable exception of Heathrow, which has raised tariffs over the period to generate sustained revenue growth. 3% 3% 2% 2% 1% OSL LHR VIE ARN4 MAN ZRH LGW FRA 0% -1% -2% -2% -4% -4% -4% -5% -5% STN GVA LTN3 BRU2 EDI3 MUC3 BHX CPH DUB AMS CDG3 HAM ATH

-6%

-7%

-8% -11% -12%

1. Inflation adjusted; 2. 2010–12; 3. 2010–13; 4. 2011–14.

EBITDA per passenger (2014, €)
26.3

% Change1 2010–14
LHR ZRH ATH 2 BRU 3 MUC 3 CDG CPH OSL FRA AMS VIE DUB LGW GVA MAN 3 EDI BHX STN HAM 4 ARN 3 LTN 41% 8% -11% 2% 2% -5% 1% -15% 16% 3% 33% 9% 27% 17% -13% -1% 9% -5% 11% 11% -1%

16.9 13.4 13.0 12.1

11.5 11.2

10.6 10.0

9.7

9.6

9.1

9.0

8.6

7.3

6.8

6.5

6.1

5.3

5.2

5.2

LHR ZRH ATH BRU MUC CDG CPH OSL FRA AMS VIE DUB LGW GVA MAN EDI
1. 2012 data; 2. 2013 data.

1

2

2

2

BHX STN HAM ARN LTN

2

EBITDA per passenger varies greatly from airport to airport but has risen for most facilities since 2010, with Heathrow making the largest gains. The EBITDA improvements have, for most airports, been driven by reductions in operating expense per passenger, rather than by increases in revenue per passenger.

1. Inflation adjusted; 2. 2010–12; 3. 2010–13; 4. 2011–14.

Summary financial benchmarking for selected European airports
Airport Year of Latest Report
2014 2014 2014 2014 2012 2013 2014 2014 2013 2014 2014 2014 2014 2014 2013 2014 2013 2014 2014 2014 2014

Pax (mn)

Total Revenue
EUR (mn) EUR/ PAX

Aeronautical Revenue
EUR (mn) EUR/ PAX

Non-Aeronautical Revenue
EUR (mn) EUR/ PAX

Total Operating Cost
EUR (mn) EUR/ PAX

EBITDA
EUR (mn) EUR/ PAX

Total Asset Value
EUR (mn) EUR/ PAX

AMS ARN ATH BHX BRU CDG CPH DUB EDI FRA GVA HAM LGW LHR LTN MAN MUC OSL STN VIE ZRH

54.9 22.4 15.2 9.3 19.0 62.0 25.6 21.7 9.8 59.6 15.2 14.8 35.9 73.4 9.7 20.8 38.7 24.3 18.0 22.5 25.5

1,261 384 316 141 413 1,868 519 368 132 1,340 332 271 736 3,181 152 415 1,229 592 304 485 793

23.0 17.1 20.8 15.3 21.8 30.1 20.2 17.0 13.5 22.5 21.9 18.4 20.5 43.3 15.6 20.0 31.8 24.4 16.9 21.5 31.1

838 206 148 61 271 1,107 302 202 64 884 179 192 394 2,116 71 223 600 232 177 344 473

15.2 9.2 9.7 6.6 14.3 17.9 11.8 9.3 6.5 14.8 11.8 13.0 11.0 28.8 7.3 10.7 15.5 9.6 9.8 15.3 18.6

423 178 168 80 142 761 217 166 68 456 154 79 343 1,065 81 192 630 360 127 140 320

7.7 7.9 11.0 8.7 7.5 12.3 8.5 7.6 7.0 7.6 10.1 5.4 9.6 14.5 8.3 9.2 16.3 14.8 7.1 6.2 12.6

730 241 112 81 166 1,153 232 171 65 747 202 193 415 1,249 101 262 762 335 194 268 362

13.3 10.8 7.3 8.8 8.8 18.6 9.1 7.9 6.6 12.5 13.3 13.1 11.6 17.0 10.5 12.6 19.7 13.8 10.8 11.9 14.2

531 117 204 60 247 715 287 198 67 593 131 78 322 1,932 50 153 468 257 110 217 431

9.7 5.2 13.4 6.5 13.0 11.5 11.2 9.1 6.8 10.0 8.6 5.3 9.0 26.3 5.2 7.3 12.1 10.6 6.1 9.6 16.9

3,790 1,058 1,208 588 N/A 6,617 1,326 2,180 635 4,067 695 466 2,963 17,944 146 1,449 5,397 1,900 1,684 1,892 3,285

69.0 47.1 79.4 63.6 N/A 106.7 51.8 100.4 64.8 68.3 45.8 31.6 82.6 244.5 15.1 69.7 139.5 78.3 93.6 84.2 129.0

Note: All data converted to Euros using average 2014 exchange rate. Source: 2012, 2013 and 2014 Airports Annual Reports; Strategy& Analysis.

Key characteristics of selected European airports
Airport Passengers Transfer Premium Aircraft FTEs2 (mn) Pax (%) Pax (%)1 Movements (K)
AMS ARN ATH BHX BRU CDG CPH DUB EDI FRA GVA HAM LGW LHR LTN MAN MUC OSL STN VIE ZRH 54.9 22.4 15.2 9.3 19.0 62.0 25.6 21.7 9.8 59.6 15.2 14.8 35.9 73.4 9.7 20.8 38.7 24.3 18.0 22.5 25.5 42% 13% 14% 2% 21% 35% 23% 5% 0% 55% 4% 2% 4% 30% 0% 3% 39% 17% 0% 32% 33% 5% 4% 3% 2% 4% 7% 5% 1% 4% 8% 6% 3% 3% 15% 0% 3% 5% 5% 0% 3% 6% 453 225 155 97 232 472 252 180 104 469 188 154 247 473 102 171 377 252 143 231 265 1,878 1,551 623 500 N/A N/A 2,306 1,834 400 6,695 927 704 2,454 5,500 600 2,226 7,625 505 1,306 4,306 1,450

% Shorthaul3
72% 84% 93% 89% 78% 60% 84% 90% 93% 66% 91% 87% 79% 48% 95% 81% 84% 87% 98% 85% 77%

% Long- Scheduled Runways Terminals Terminal Gates Ownership haul3 Airlines Size (km2) (% Private)
28% 16% 7% 11% 22% 40% 16% 10% 7% 34% 9% 13% 21% 52% 5% 19% 16% 13% 2% 15% 23% 97 66 67 38 81 135 73 37 34 118 75 60 56 92 9 62 98 42 16 77 77 6 3 2 1 3 4 3 2 2 4 2 2 1 2 1 2 2 2 1 2 3 1 4 2 2 1 3 2 2 1 2 2 2 2 5 1 3 2 1 1 4 3 600 135 188 104 190 1,524 215 150 45 1,300 89 35 258 632 46 230 469 144 118 N/A 200 222 92 44 37 109 208 108 72 22 208 36 51 143 165 26 57 206 52 70 96 106 8% 0% 45% 51% 75% 48% 61% 0% 100% 69% 0% 49% 100% 100% 100% 36% 0% 0% 36% 60% 62%

1. Passengers travelling in premium cabins; 2) FTE numbers depend on airport operating model and level of in/outsourcing 3): % Short-haul/Long-haul based on seat capacity.

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