Milan Malpensa and Milan Linate airport traffic
|Movements||Passengers (1)||Cargo (2)|
|2018||% vs 2017||2018||% vs 2017||2018||% vs 2017|
|Total commercial traffic||283,897||4.7%||33,748.8||7.0%||569,045||-3.3%|
(1) Arriving+departing passengers (‘000)
(2) Arriving+departing cargo in tonnes
In 2018 the Milan Airport System managed by the SEA Group served a total of 33.7 million passengers, up 7.0% on FY 2017 (2.2 million passengers).
The increase in the number of passengers (+2.2 million) was attributable solely to Malpensa airport, which with 2.5 million additional passengers posted a gain of 11.5% on the previous year.
Since 2008, the year of the Alitalia de-hubbing and the beginning of the global recession, Malpensa has gradually reacquired 5.5 million passengers, closing 2018 with nearly one million more passengers than in 2007, the year in which the previous record had been set.
Malpensa's strong performance was driven by Terminal 2, which is home solely to easyJet (+402.8 thousand passengers, +5.6%), and by Terminal 1 (+2.1 million passengers, +14.3%), where all traffic segments contributed to growth. In particular, legacy carriers contributed 1.3 million passengers (+11.9%), low-cost carriers 731.9 thousand passengers (+28.1%) and the leisure and charter segment 71.7 thousand passengers (+6.2%).
Passengers on intercontinental flights at Malpensa amounted to 6.3 million, an increase of 468.4 thousand passengers (+8.1%) on 2017.
Linate airport recorded a 3.3% decline on FY 2017 due to the cancellation of operations by Air Berlin (with effect from November 2017), the relocation to Malpensa of all Air Italy (former Meridiana) traffic, with the exception of service to Olbia (part of the local public transport service program), and the shift of flights to Malpensa by KLM and Air France in April 2017.
The following is a breakdown of passenger traffic within the Milan airport system by major destinations served and the main airlines present.
Major destinations by number of passengers served by the Milan airport system (thousands)
The number-one European destination was London, with its five airports and over 2.5 million passengers served, followed by Paris with 1.9 million passengers and then Catania, the number-one domestic destination served, with 1.6 million passengers. Rome posted 1.3 million passengers, marking a recovery on 2017 due to the new flights that began to be operated from Malpensa in 2018. New York and Dubai (in the 8th and 14th spots, respectively) were the leading intercontinental destinations.
|Year 2018||cge % 2017||% of total|
London: Heathrow, Gatwick, City, Luton and Stansted; Paris: Charles de Gaulle, Orly; Rome: Fiumicino, Ciampino; New York: New York and Newark
Main airlines by passengers served by the Milan airport system (thousands)
easyJet was again the number-one carrier in terms of traffic volumes at the Milan airports, with a market share of 24.6% of total passengers (30.8% share at Malpensa). Alitalia, the number-two carrier, had a market share of 18.3% (62.2% at Linate). Ryanair, fourth in 2017 with over 2 million passengers managed exclusively at Malpensa, became the number-three airline, overtaking Lufthansa.
|Year 2018||cge % 2017||cge % total|
|8||Vueling Airlines S.A.||837.3||3.8%||2.5%|
|15||Tap Air Portugal||431.1||32.3%||1.3%|
Lufthansa: Lufthansa + Eurowings + Air Dolomiti
In 2018 Malpensa served 24.6 million passengers, an increase of 11.5% (2.5 million additional passengers).
COMPOSITION OF PASSENGER TRAFFIC IN 2018 AT MALPENSA AIRPORT BY GEOGRAPHICAL AREA (THOUSANDS)
Domestic traffic was up 29.4% to 4.1 million passengers, an increase of 929.9 thousand passengers. This result was due to:
- Ryanair (+65.6%, +406.2 thousand passengers), with progressive consolidation of service to Catania and Comiso and the flights to Palermo and Lamezia Terme that began to be operated in November 2017.
- Air Italy (+201.8%, +281.0 thousand passengers), which in the 2018 summer season began to shift the service previously offered from Linate to Malpensa, offering new flights to Rome Fiumicino, Naples, Palermo, Catania and Lamezia Terme.
- Alitalia (+774.3%, +140.5 thousand passengers), which is Italy’s number-three domestic carrier, with renewed service to Rome Fiumicino since the 2018 summer season (previously operated until February 2017).
- easyJet (+3.5%, +79.9 thousand passengers), whose growth is primarily attributable to the service to Catania.
European traffic was up 8.6% to 14.2 million passengers, an increase of 1.1 million passengers. This result was primarily due to:
- easyJet (+6.6%, +311.3 thousand passengers), which during the year began to offer service to Berlin and consolidated the flights it began to operate in 2017 to Lublin, Fuerteventura, Vienna and Faro (+65.6 thousand total passengers).
- Ryanair (+23.2%, +198.9 thousand passengers) expanded its network in November 2017 to include Valencia, Liverpool, Alicante and Katowice, and then added Kaunas and Tenerife in the 2018 winter season.
Intercontinental destinations registered 6.3 million passengers served, with an increase of 8.1% on 2017, equivalent to 468.4 thousand passengers. The breakdown by region is reported below:
The geographical areas that contributed to these results are the Middle East with Turkish Airways, Qatar Airways and Emirates, North America with Air Italy, American Airlines, Delta Airlines and Air Canada and the Far East with Thai Airways, Air China and Singapore Airlines.
Cargo traffic at Malpensa airport amounted to Euro 558.2 thousand tons in 2018, a decrease of 3.2%. This result was due solely to export traffic (-4.8%). There were increases in both all-cargo flights (+3.4%) and mixed flights (+9.0%).
The decline in cargo traffic was solely due to the negative performance of all-cargo carriers (-6.0%), following the decline in average cargo volume per flight from 38 to 34 tons. By contrast, airlines that use aircraft in mixed configuration posted growth of 4.5%.
The distribution by geographical area shows that the destinations with the highest growth rates were the Middle East and Europe, at 4.8% and 2.4%, respectively. The Far East and North America – the number-three and number-four destinations by volume of cargo carried – declined by 13.7% and 5.4%, respectively.
The decrease in all-cargo traffic, which amounted to 395.8 thousand tons, was primarily due to the reduced flights by Cargolux (-15.8%) and Etihad Airways, which suspended flights in the first three months of 2018 and reduced the number of flights operated for the rest of the year (-86.8%).
In the all-cargo segment, the main courier carriers (Federal Express, DHL and Southern Air) handled 70.6 thousand tons of cargo (+1.9%), accounting for 17.8% of this type of cargo.
Belly traffic, at 162.4 thousand tons of cargo, was up on the previous year. Among the main carriers, Emirates and Air China – in first and third place, respectively, by amount of cargo handled – were down by approximately 7.6% and 7.9%, respectively. Qatar, the number-two carrier, was up by 36.8%, with 5.8 thousand additional tons of cargo, whereas Air Italy handled 4.2 thousand tons due to the new flights that began to be operated in 2018, making it the number-two carrier by incremental cargo volume.
2018 FREIGHT TRAFFIC BY GEOGRAPHICAL AREA - SEA MANAGED AIRPORTS
The % change refers to a comparison with the previous year
Cargo refers to the flight’s final destination
Linate airport handled 9.2 million passengers, down 3.3% on the previous year. Alitalia, with 5.7 million passengers served, accounts for 62% of total traffic.
2018 TRAFFIC COMPOSITION FOR LINATE AIRPORT (THOUSANDS)
In comparison to 2017, domestic traffic was down (-1.8%), due to the discontinuation of service from Linate by Air Italy (with the exception of flights to Olbia), which focused its operations at Malpensa airport.
European traffic was down by 5%, principally due to the discontinuation of operations by Air Berlin (still operating in early 2017) and Air Italy, together with the transfer to Malpensa of Air France and KLM with effect from the 2017 summer season.
This reduction was partially offset by the transfer to Malpensa of the daily service to Madrid by Iberia (+178.9 thousand passengers with effect from February) and by the increase in the passengers served by British Airways with flights to the British capital, consolidating the service to London City and London Stansted that began to be operated in April 2017. The passengers carried by Alitalia were in line with 2017 (+0.3%). In 2018 the carrier began to offer service to Madrid and Luxembourg in April and to Geneva in September.
EasyJet also reported an increase in load factor on all routes served (Paris Charles de Gaulle and Orly, London Gatwick and Amsterdam), alongside that of Lufthansa to Frankfurt.
In accordance with IFRS 15, from FY 2018 commercial incentives to airlines in support of traffic development are recognised as a deduction to revenues, rather than as operating costs. In order to facilitate like-for-like comparison with the previous year, the 2017 results were restated as per the new accounting standard.
Commercial Aviation revenues for the period January-December 2018 amount to Euro 658,128 thousand, up Euro 36,724 thousand on the previous year (+5.9%).
FY 2018 includes non-recurring revenues for a total of Euro 5,591 thousand compared to Euro 2,824 thousand in FY 2017. Net of these items, revenue growth on the previous year was Euro 33,956 thousand (+5.5%). This growth mainly results from:
- Aviation activities for Euro 23,289 thousand (from Euro 392,440 thousand in 2017 to Euro 415,729 thousand in 2018). Contributing to this increase is higher traffic volumes of Euro 17,924 thousand (+5.6%), the increase in airport tariffs for Euro 4,527 thousand and higher revenues from regulated spaces for Euro 838 thousand.
- Non-Aviation activities for Euro 10,668 thousand (from Euro 226,140 thousand in 2017 to Euro 236,808 thousand in 2018). This performance was mainly due to good results in the Retail divisions (Shops, Food & Beverage, Car Rentals and Banks) for Euro 2,622 thousand (+2.8%) and Parking for Euro 4,061 thousand (+6.3%). Against the same period of the previous year, the Premium Services segment (VIP Lounges and Fast Track services) increased for Euro 1,272 thousand and Real Estate for Euro 946 thousand. Cargo revenues amounted to Euro 16,261 thousand, up Euro 966 thousand on 2017 (+6.3%), following the renewal of certain contracts and the extension of spaces utilised by new tenants. Advertising revenues of Euro 1,062 thousand also increased, confirming the consolidation of investment in the luxury division, especially at Malpensa.
In the Retail division, revenues from Shops registered growth of Euro 1,329 thousand (+2.7%). Increases in revenues from the non-Schengen boarding areas at Terminal 1 contributed to this performance with the opening of new luxury brands, including Loro Piana and Rolex.
Revenues from the Food & Beverage segment grew by Euro 1,705 thousand (+8.5%), better growth in percentage terms than passenger traffic improvements. At Linate, the catering service confirmed the previous year’s revenues despite the 3.3% decrease in traffic. Due to the increase in traffic and new store openings, the catering service at Malpensa Terminal 1 returned a good performance supported by the lay-outs present in both landside and airside areas.
Revenues from the Car Rental division returned growth of Euro 858 thousand over 2017 (+5.3%), mainly due to the good performance of Malpensa operators through the creation of new parking spaces and the opening of new spaces inside Terminal 2’s railway station, thus making the entry of new operators possible. Revenues from Banking Services fell by Euro 1,270 thousand, principally due to a reduction in the VAT refund.
Operating costs for the Commercial Aviation business decreased from Euro 389,969 thousand in 2017 to Euro 386,967 thousand in 2018, reducing Euro 3,002 thousand (-0.8%).
Net of non-recurring cost items mainly relating to the mentioned voluntary leaving incentive plans amounting to Euro 2,046 thousand in 2018 and Euro 23,912 thousand in 2017, operating costs increased by Euro 18,864 thousand (+5.2%). This is due to:
- Personnel costs, up Euro 468 thousand (+0.3%), which incorporates the net effect of the planned departures and recruitment for the year;
- The increase in operating and material costs for a total of Euro 18,396 thousand compared to FY 2017, mainly due to rising unitary costs of raw materials and CO2 certificates for 3,437 and higher costs incurred to meet increased traffic or costs offset against revenues (parking, Telepass and VIP lounges) amounting to a total of Euro 14,959 thousand.
Among these, there is an increase in costs to public bodies for Euro 2,752 thousand, airport services costs for Euro 2,096 thousand, security activities for Euro 1,221 thousand, parking management costs for Euro 541 thousand, VIP lounge catering for Euro 1,061 thousand, maintenance and spare parts for Euro 2,541 thousand and chemical products relating to the deicing service and snow management for Euro 239 thousand.
EBITDA and EBIT
As a result of the trends outlined above, EBITDA in 2018 stood at Euro 273,622 thousand (Euro 233,710 in 2017), up Euro 39,912 thousand over the previous year (+17.1%). Excluding the non recurring items mentioned above, the increase amounted to Euro 15,093 thousand (+5.9%).
Amortisation and depreciation and net provisions for recovery, risks and charges and doubtful debt are lower than 2017 by Euro 21,857 thousand, mainly as a result of the 2017 provisions for Alitalia’s losses on receivables of Euro 25,255 thousand.
Consequently, Commercial Aviation EBIT in 2018 was Euro 183,869 thousand, up Euro 61,769 thousand (+50.6%) on the same period of the previous year. Excluding non-recurring items, EBIT in 2018 was Euro 180,324 thousand, an increase of Euro 8,405 thousand (+4.9%) on 2017.
The main Commercial Aviation business investments were:
- the functional upgrading and restyling of Terminal 1 at Malpensa and at Linate;
- the construction of a second Cargo operator warehouse;
- upgrading works in the Malpensa and Linate car parks;
- the purchase of new equipment for the Linate and Malpensa airport aprons.
Investments/Aviation Spaces Development
A summary of major events relating to the development of airport premises in 2018 is provided below:
- the opening of the new Lufthansa lounge;
- the renewal of the contract with EMIRATES for a second five-year contractual period (2018-2022).
The year was marked by the completion of the Schengen boarding area’s commercialisation, where all the spaces were steadily occupied and where the majority recorded double-digit revenue growth on the previous year. All brands present in the area are consistent with the original plan of also having an attractive offer for passengers of low-cost airlines or, in any case, having an affordable price positioning.
Renovation work in the non-Schengen boarding luxury area also continued with the opening of a temporary Loro Piana store in April which will move to a larger space in 2019, and Rolex in December, both with excellent sales performances.
In Linate’s airside area, worth mentioning is the opening in August of the new temporary Timebox/Sun Catcher shop under the management of Dufrital, and the expansion of Gallo in September.
With regard to Food & Beverage, the catering service at Terminal 1 recorded a good performance as a result of traffic growth and the new openings, also supported by further expansion in the existing landside lay-out (Briciole Bar, McDonald’s, Rosso Pomodoro at check-in, Juice Bar and Gourmè in the arrivals area) and the boarding area lay-out, particularly in the Schengen area.
In order to convert the space freed up by the former SEA ticketing desks, the food offering was extended through the opening of “Pan Brioche”, an innovative approach managed by Autogrill, with strong specialisation in baked goods and gourmet snacks.
It should be noted that in October, Autogrill completed the renovation of the “Puro Gusto” cafeteria in the Linate Arrivals area, based on a more modern version of the original idea and in collaboration with Gambero Rosso.
Destination management and co-marketing activities
Collaborative efforts with the Chamber of Commerce, the Municipality of Milan and the Region of Lombardy also continued in 2018 with the aim of increasing the international visibility of Milan's airports and the local area. Passenger loyalty activities continued through the launch and publicization of the “Russian friendly airport” project. Furthermore, the planning of the first activities for the World Routes 2020 commenced.
Communication activities were undertaken to support airlines through social media, newsletters and online banners, and various launch events for new flights were hosted for Kuwait City, Air Italy, Air China and Ernest Airlines.
Analyses carried out in support of the development of destination management activities identified the opportunity to participate in the City Pulse project launched by the Municipality of Milan’s Metropolitan Marketing Department. This initiative aims to acquire know-how on the behaviour of “city users” arriving in Milan, with particular reference to information on presence, origin, consumption habits and spending.
A major agreement was signed in 2018 with the Sultanate of Oman enabling the increase of flight frequencies operated by Oman Air on the Muscat-Milan route. Agreements with Colombia, Congo, Ghana, Kenya, Luxembourg, Senegal and South Africa were also updated and extended, while a bilateral aeronautical agreement was signed for the first time with the Comoro Islands, Mongolia and Mozambique.
Finally, EU negotiating activity continued, under the auspices of the European Commission, which is negotiating vertical agreements between Europe and ASEAN, Azerbaijan, Armenia, UAE, Qatar, Tunisia and Turkey.
The outcome of Brexit, which to-date is unknown, will be significant in terms of traffic rights. While a broad agreement between the European Union and the United Kingdom (“soft Brexit”) would not affect the use of traffic rights by both parties’ airlines, with highly similar terms to the current ones, and presumably giving rise to an association agreement that is comparable to those defined by the European Union with Norway and Switzerland, the continental market’s scenario in the case of a “hard Brexit” could be somewhat different.
In the latter event and subject to a freezing period of 12 months for mutual prerogatives, in the best-case scenario individual Member States could re-negotiate new bilateral agreements with the United Kingdom. These outcomes are not currently readily foreseeable and, in any case, are such as to create a period of considerable uncertainty in relation to airlines’ investment choices and, more generally, the market development context.