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Garda Airports: after enhancing the development plan thanks to their member’s support, both airports achieved good results in 2010 and got the market share back


Garda Airports: after enhancing the development plan thanks to their member’s support, both airports achieved good results in 2010 and got the market share back. Despite the still delicate macroeconomic situation, in the second part of the year (July - December) passengers traffic to and from Verona grew by 3,48% and cargo traffic to and from Brescia increased by 30% compared to the same period in 2009

Verona, 16th December 2010 – the managing company of Verona and Brescia airports illustrated today the summary of all actions taken in 2010 and explained the current stage of their development plan. Thanks to the members support the first phase of the development plan was put into effect and has already strongly changed the identity of both airports. The specialization strategy and consequent business reorganization, along with a considerable modification of the old business model adopted (reorganizing Verona airport by implementing low-cost flights and investing on cargo services in Brescia), the proceeds increase and the infrastructural growth, the measures taken to improve performance efficiency and the new management control, together with the liberalization of handling operations are the main actions carried out during the current year aiming at positively influence the profit and loss account.

The service diversification for the two airports (mainly passengers traffic to and from Verona, mainly cargo traffic to and from Brescia), following a specialization strategy and a peculiar development line, has already given a first important result in terms of passengers traffic for Verona airport, which, also thanks to Ryanair’s involvement, registered an increase by 3,62% last November, compared with the oscillatory trend registered throughout the year. Cargo traffic to and from Brescia reached the best performance level this year in September (+ 31,08% compared to 2009) and October (+ 177,64% compared to 2009) . However, figures are to be interpreted with caution because of strong fluctuations in the market. IATA (International Association of Air Transport) is still quite circumspect about confirming the pick-up of recent months.

Catullo airport is now connecting 185 destinations, through 30 scheduled Airlines. Daily flights are averagely 90, with pick days of 140 flights in the most intensive periods. The number of connections operated in 2010 reached a total of 31.693 movements. As announced last week a new Airline will start operating in Verona from April 2011: Air Berlin. The second most important airline in Germany will connect Verona to Berlin and Düsseldorf and also to many other important European destinations, such as the Scandinavian countries, thanks to its international network. Announced today also the operations opening for the eighth airline in Verona: Easyjet. This European low-fare leading airline will carry passengers to London every day starting from the spring-summer season. In accordance with the guidelines established during the Assembly meeting last June, an essential condition for the implementation of the low-cost market segment is that the airport development shall not depend on one unique airline, but on the cooperation with the most important air-carriers on the market. The airport is also working in synergy with key Airlines (such as for example Meridiana fly, Air Dolomiti, Air Italy) in order to confirm its consolidated success in scheduled and charter flights. Last October we also signed an important agreement with Meridiana fly with the aim to develop new domestic and international projects.

Main events for the D’Annunzio airport include Lufthansa Cargo starting its operations last March and Jade having already consolidated its activity since some time. In recent months cargo traffic has increased thanks to charter flights operated by cargo Airlines that have tested our airport service level in view of a possible consolidation in 2011. All carriers have experienced an excellent service level, so we assume to plan a consistent budget for 2011. This volume increase does not require a further infrastructural development thanks to the implementations that are already being carried out.

As announced today, three new cargo carriers have signed an agreement with the Airport management company and will start operating from the next season (spring 2011): YV MEI (Chinese airline will operate twice a week with B777 aircrafts), Ethiopian Airlines (flying with B747 aircrafts; frequency: once a week in the summer, twice a week from September), MNG (Turkish airline carrying two flights a week with A300 aircrafts). The three carriers chose Montichiari to start their operations in Italy. Furthermore, a new protocol has been signed this week with Nanjing Airport, aiming at increasing air-transport between the two airports. Other negotiations with more cargo carriers are also under development, as projected according to the industrial plan.

As confirmed in a study on the Italian airport system by ICSSAI (International Center for Competitiveness Studies in the Aviation Industry) Verona and Brescia are the sixth most important airport system nationwide and play an essential role for the economy of their local areas. The study revealed that the regional airports, being a connection to the world, have caused an important relapse on the economic and social development. Another study, that was recently published by Conftrasporti, has stated that to recover its competitiveness Italy should develop infrastructures and logistics services, which are currently effecting 18-20% of production, compared to 14-16% in Europe, with a recovery of 40 billion Euro.

Actions taken

The business model of Verona airport was reorganized, as a consequence of the strong crisis influencing charter flights, which was a significant part of the terminal traffic (30,7%). Forecasts show that after the decrease of recent months, charter transportation is expected to see a zero growth in the coming years. The enhancement of the low-cost sector was crucial to attract new customers and the positive effects of Ryanair’s flights could be registered right from the beginning of its activity. ONT (National Observatory for Tourism) highlighted that this year, much more than in the past two years, price is affecting how people choose their holidays, both in terms of accommodation and travel. Over 30% of passengers flying to Italy is choosing low-cost flights.

During the year many other strategic lines have been followed in order to stimulate airport growing, such as strengthening non-aviation, liberalization of handling operations, developing infrastructure. According to the industrial plan, non-aviation should be considered as a priority in order to enable Verona compete with other similar airports. By rebuilding the Departure Terminal, creating a new shopping arcade and opening 13 new shops, and also developing the Low-Cost Terminal, spaces available for business activities are considerably increasing. There is now a total of 38 business activities. This resulted into a positive impact on travel retail, which was quite limited until now, because of the little room available. Non-aviation is now giving 30% of the proceeds (20% in 2008) ansi s expected to reach 40% within 2014, according to the development plan.

The liberalization of handling service was started with the aim to improve efficiency and quality. In terms of infrastructural development, the project includes to rebuild the Departure Terminal (end of works expected within the first months of 2011) and build a new Low-Cost Terminal (within summer 2011). A new building connecting Arrival and Departure Terminals is still being designed.

At Montichiari airport goods handling areas are being developed and adjusted and a series of works are going to be completed in the coming months: > a 3.500 sqm building, to be placed alongside the existing 3000 sqm edifice, will be completed by spring 2011. Being equipped with a plant design that is suitable for a wide range of products, this new construction will be used as stocking warehouse, including also a loading/unloading area with new offices for Governmental Authorities and Shipping Agents and a parking lot for cargo vehicles. > a 1.700 sqm tentwarehouse will be ready by February 2011 to complete the existing tent for a total of 3.500 sqm and will be used mainly for postal activity, being placed closed to customs offices and equipped with a loading/unloading area. > a 1.100 sqm building for special loading will be operative from January 2011.

Traffic trend as a kind of “litmus paper” showing current developments

Despite the still delicate macroeconomic situation and the still cautious forecasts made by analysts because of the contrasting elements arising from the market, in the last months of 2010 both airports could get better results.

In the first part of the year, on the contrary, the economic scenery was much complicated (the economic crisis caused exceptional events, such as Greek air-traffic controllers “white strike” that last July made impossible for some days all flights not only to Greece, but also to Egypt and the Red Sea). Other unforeseen events, such as the Icelandic cloud, also affected both passengers and cargo traffic figures.

Starting from November passenger traffic to and from Verona has been registering a positive performance and is expected to close the year with the same rate as at the end of 2009. Low-cost transportation has covered 15% of the whole traffic volume in the last two months and has played an essential role in the positive result achieved. In the North of Italy scheduled traffic is expected to grow by averagely 1,8% over the next few years, while charter flights will see a zero growth and low-cost air-transport is expected to averagely increase by 4,5%.

Previsions on the short term are moderately positive, considering the Christmas season. According to a study by ADOC, National association for consumers’ defense and guidance, the average budget for Christmas holidays is less than 700 Euro per person, increased by 2% compared to 2009, and only 3% of Italians could afford to spend over one thousand Euro and 18% will choose a destination abroad. As expected by the National Observatory for Tourism the Italian travelers that will choose a holiday abroad will spend an average of 1.480 Euro for about 6-7 days. Because of the crisis, their choice will be guided by internet, by low-cost offers and by the operators ability to present attractive and low-priced packages.

Cargo traffic to and from Brescia has also increased in the second half of the year and a further rise is expected when the three new Airlines will be operative in 2011. Infrastructural development with new technologically advanced areas, the new pipeline system for refuelling, an innovative marketing strategy and the new business policy adopted this year have aroused interest in international Cargo Companies.

Experts have predicted an increase for cargo traffic in Italy up to 1.5 Million tons within 2024, with an average growth of 3,5% after the drop off of recent years. Northern Italy airports are currently handling 663,5 cargo tons and have a good growing potential . However, the situation is still unstable and projections for next year are much cautious. In spite of that, Montichiari has signed important agreements in recent months and orders expected will saturate its infrastructural capacity, so that cautious but positive growing projections can be done for the year 2011.