Zurich Airport Ltd. generates substantial profit in first half of 2023
Rising demand for air travel and the positive trend in the real estate and commercial business produce a positive consolidated result of CHF 138 million for Zurich Airport Ltd. in the first half of 2023. This is the second-highest half-year profit in the company’s history.
Total revenue for the first half of 2023 amounted to CHF 577 million (+26% compared with 2022, which corresponds to 98% of the 2019 figure). Aviation revenue rose by 35% over the prior-year period to CHF 279 million. Non-aviation revenue increased by 18% to CHF 298 million. Rising at a slower pace than revenue, operating expenses increased by 15% year-on-year to CHF 253 million.
Earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 36% year-on-year to CHF 324 million. Compared with the first half of 2019, which was not affected by the pandemic, EBITDA is 7% higher.
This results in a positive consolidated result of CHF 138 million for the first half (1H 2022: CHF 55 million). The consolidated result amounts to 96% of the best half-year result to date, namely in 2019, (1H 2019: CHF 143 million).
Traffic volumes and route network
Overall, between January and June 2023, a total of 13.1 million passengers used Zurich Airport as a departure, transfer or destination airport, 44% more than in the prior-year period (corresponds to 88% of the 2019 result). In the first half of 2023 the number of flight movements climbed 20% year-on-year to 116,633 take-offs and landings (corresponds to 86% of the 2019 figure). The volume of freight handled fell by 13% to 187,403 tonnes (corresponds to 83% of the 2019 figure). The reason for the decline is the increase in sea freight with much lower freight rates. The route network is virtually at the pre-pandemic level: a total of 187 destinations are being served in the summer timetable. Flights to Shanghai, Seoul, Larnaca and Chişinău in Moldova were resumed. Biarritz in south-west France is a new destination, and direct flights to Akureyri in Iceland are being offered in the summer months. Several airlines have also expanded their service on existing routes – for example to Hong Kong, Doha or Addis Ababa.
Positive trend in commercial and real estate revenue
Higher passenger numbers led to a strong recovery in the sales of commercial partners, with the food & beverage operations worthy of special mention. Airside sales increased in line with passenger numbers, while commercial landside business has already surpassed the pre-Covid level.
A number of new stores and restaurants opened both airside and landside. These included the new Hugo Boss shop, Jimmy Choo, Haute Parfume and Pret à Manger at the Circle.
Real estate revenue rose by 18% year-on-year to CHF 98 million, thus reaching a new record high. The occupancy rate at the Circle is around 90%.
Investments and major projects
In the reporting period, Zurich Airport Ltd.'s investment in property, plant and equipment, projects in progress and airport operator projects totalled CHF 161 million (2022: CHF 106 million), of which CHF 82 million (2022: CHF 92 million) was invested at the Zurich site. After temporary suspension due to the coronavirus pandemic, work to construct aircraft stands in Zone West has now resumed. The renewal and expansion of the baggage sorting system is on schedule. By contrast, an appeal has led to delays in the development of the landside passenger zones. Initial preparatory work on the apron is already being carried out this year for the new Dock A. The Cantonal Parliament voted on the important runway extension project on 28 August. The work aims to increase the safety margin and will result in fewer unplanned changes to operations and fewer delays in the night-time hours. The referendum in the Canton of Zurich is exptected to be held in 2024.
India and Latin America
In Noida, India, construction work on the terminal and runway system is progressing on schedule, and various contracts have been signed with service providers and airport partners. The opening is scheduled for the end of 2024. In Latin America, the company acquired a further licence to operate an airport in Brazil, in Natal. In 2022, around 2.3 million passengers passed through the airport, which has a capacity of approximately 6.5 million passengers per year. The handover of operations will take place in early 2024.
Outlook
This year has turned out better than initially expected, and international travel continues to recover. Passenger numbers at the Zurich site are expected to rise to around 28 million in 2023, which is just under 90% of the 2019 figure. Zurich Airport will celebrate its 75th anniversary from 1-3 September with a big public airport festival.
Moreover, the airport exhibition in Airport Shopping was opened and can be viewed until 8 September. A digital version of the airport's history was also presented.