Aena. Global airport leader
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Belt & Road International Transport Alliance (BRITA)
Beijing, China, June 18-20, 2018
Aena. Global airport leader
Aena SME, S.A.
Arturo Soria 109, 28043 Madrid, Spain
aenainternacional@aena.es
ABSTRACT
It’s now about 30 years since the first airport privatisation process, and we have seen how this
trend has continued as a practical way to warrantee the investments required to adjust the capacity
according the increasing air traffic demand and the ever growing requirements for safety and quality
of service. Different privatisation models can be adopted, depending on airport size, regulation or
investment profile, but there will be always the necessity to benchmark with best practices and
incorporate a deep understanding of the aeronautical sector to conclude a successful and profitable
process.
Few global operators are working on the market today, each of them with different
competences and portfolio. This paper will analyse Aena’s history, its evolution and how it has
evolved to become the Global airport leader today.
KEYWORDS: Aena, Airport privatisation, Air Transport, Infrastructure
1 INTRODUCTION
Aena SME, S.A. is a state-owned company that manages general interest airports and heliports
in Spain. Through its subsidiary company Aena Desarrollo Internacional SME, S.A. it also
participates in the management of 16 airports abroad.
A new regulatory and supervisory framework for airport quality control and the maintenance of
the Aena network was approved on 4 July 2014, with the aim of fostering economic development and
competitiveness in the sector by freezing of taxes until 2025.
Today, Aena SME, S.A. is a leading company thanks to its experience, capacity and team of
airport service management professionals. It offers its customers –passengers, airlines, handling
agents and users in general– a comprehensive service of the highest quality. In 2017 Aena was the
European airport operator with the greatest volume of passengers, with 265 million, an historical
maximum value. It was followed by TAV Airports, with 115 million; Aeroports de Paris, with 101.5
million; Heathrow Airport Holdings, with 78; Schiphol Group, 75.8; and Fraport, 64.5.
Aena’s airports are some of the most modern and functional in the world, and they are equipped
with the most advanced technology. Their efficient services and varied commercial offering (in
exclusive environments, with the most prestigious brands and innovative products) guarantees
passengers a safe, comfortable experience. Furthermore, they are designed with full accessibility and
assistance services for people with reduced mobility that has received international awards for
excellence.
This is the history about how these achievements were reached.
12 HISTORY OF AENA
Aena’s creation was related to the process of deregulating and granting access to the air
transport market which took place in the late eighties in the field of international European air
transport. The aim was to provide Spanish airports with an organisational model that would enable
faster and more flexible operations than those provided by the civil service framework, which held
airport management back then.
Aena came into being through article 82 of Law 4 on General State Budgets in 1990, becoming
effectively established on 19 June 1991.
Since its beginnings Aena has had its own legal status and full public and private management
capacity. This symbiosis means that Aena is governed by public law in its public functions, and by
private law in all matters relating to its assets and hiring decisions.
The operational guidelines for this new entity were set by the Spanish Government through the
former Ministry of Transport, Tourism and Communications - today the Ministry of Public Works -
entrusting it with management authority over Spanish airports, facilities and navigational aid and air
traffic control networks.
Aena started providing its services on 2 November 1991, performing functions related to the
management of Spanish airports, and on 2 November 1992 Aena began its air navigation activities.
Aena has since carried out a full and comprehensive modernisation of Spanish airport and air
navigation facilities, thereby positioning our airports at the forefront of our neighbouring countries
and leading the management systems in the area of international air traffic control.
Aena was responsible for the Spanish airport network changing the ground handling services
framework by incorporating various service operators at the airports with the highest air traffic
density. This has led to an improvement in the quality of airlines and an overall cost reduction.
2.1 New infrastructures
The adaptation of airport installations to the Schengen Agreement meant a total refurbishment
of the existing infrastructures. These were supplemented with major infrastructure works aimed at
preparing for events happening in 1992 - the Barcelona Olympic Games and the Seville Universal
Exposition - as well as the construction of new terminals in the Malaga and Jerez airports.
Throughout the nineties, Aena experienced a profound change in its management structures. It
adapted to a new business model while also launching new operational management systems based on
the implementation of new technologies for the operation of airport resources, public information
systems, aeronautical and commercial revenue management systems, etc.
It is also worth mentioning the construction and opening of new shopping centres that reflected
the new approach to airport management culture, in line with new European trends.
After improvements in 1992, Aena undertook a major refurbishment of the Palma de Majorca
and Madrid-Barajas airports. These were followed by works at almost all the airports in the network,
which had grown with the inauguration of two new airports in La Gomera and Leon.
The beginning of the new century marked Aena's management taking charge of three new
airports in Colombia and twelve in Mexico, which became a great platform for Aena International.
The completion in recent years of the Plan Barajas, Plan Barcelona and Plan Malaga projects
has led to the improvement and expansion of the three major airports in the peninsular area. This work
has been complemented by the opening to air traffic of the new Logrono, Albacete, Burgos, Huesca-
Pirineos airports, and the Ceuta and Algeciras heliports.
As a consequence of this ambitious plan, from 2000 to 2010 Aena invested almost 20.000
million euros on Spanish airport infrastructure. These now constitute the most important airport
network at the international level, and maintain a healthy capacity buffer to allow additional traffic in
the future.
2The whole picture of Spanish Network and airport typologies is presented on Figure 1.
Figure 1: Largest diversified Network of all airport types
2.2 Aena and Enaire
By an agreement of the Council of Ministers on 25 February 2011, the Aena Aeropuertos state-
owned corporation was created in order to implement Royal Decree-Law 13, of 3 December 2010, on
fiscal, labour and deregulation measures to encourage investment and job creation, which included in
its legislative text the modernisation of the airport system by implementing a new management model.
Ministerial Order of 7 June 2011 approved the setting up of Aena Aeropuertos S.A. The latter
was commissioned to perform functions and duties previously exercised by the public business entity
Aena for the management and operation of airport services.
Following its internationalisation policy, in 2013 Aena acquired 50% of the share capital in
Aerocali, Colombia's third most important airport with over 4 million passengers, where Aena
previously had held 33% of share capital. It also acquired the concessionaire of London Luton Airport
(fifth British airport with 9.6 million passengers) with a 51% stake by Aena and 49% by AXA Private
Equity Investment Company.
Through Royal Decree Law 8, of 4 July 2014, the company’s name changed from Aena
Aeropuertos, S.A. to Aena, S.A. (In April 2017, according to the provisions of Law 40/2015 on the
legal framework of the public sector, which establishes that state-owned corporations must bear the
abbreviation S.M.E., the company’s name was adapted to Aena SME, S.A.)
At the same time, and through the same piece of legislation, public business entity Aeropuertos
Espanoles y Navegacion Aerea, Aena, has become Enaire.
Enaire retains the same legal nature and status of public business entity Aena, exclusively
executing responsibilities related to airport and air navigation activities, in addition to performing the
national and international operational coordination of the Spanish air traffic control network.
33 THE NEW AIRPORT REGULATORY FRAMEWORK IN SPAIN
The Spanish government promoted a new regulatory framework through the Law 18/2014 so
that the entry of capital could be conducted with full guarantees, ensuring on the one hand the
continuation of the network of airports while maintaining the best quality, capacity and efficiency
conditions and, on the other hand, providing the system with the necessary predictability and stability.
This legal framework established, as a basic principle, the continuation of the network of
airports as well as the mechanisms to ensure the adequate requirements for the provision of airport
services subject to regulation, encouraging efficiency. This is accomplished through a five-year
duration document: the DORA (Airport Regulation Document), prepared by the Directorate General
of Civil Aviation (DGCA) and approved by the Council of Ministers. The DORA establishes the
conditions that must be satisfied by Aena concerning the management of the network of airports.
In addition, the new framework established mechanisms to monitor compliance with the DORA
and reinforced the principles of transparency and consultation of Directive 2009/12/EC through a
specific consultation procedure with the associations of airlines during the development of the DORA
and, annually, through transparent procedures and consultations on airport charges.
The new framework sets a new prospective regulatory model that promotes the operator
efficiency and is based on the recovery of the expected costs during the complete regulatory period,
including operating costs and an appropriate remuneration of assets, through the cost of capital. These
costs are subject to analysis by the regulator who should ensure the efficiency of such costs.
The total volume of costs together with the estimated demand for the period allow the
establishment of a price cap for each year of the regulated period, similar to the model applied in other
neighbouring European airports. This limit on the average income can be modulated according to the
performance in certain proportions pre-determined within the DORA, mainly in relation to the quality
and fulfilment of strategic investments. This modulated price cap is the one that Aena must finally
meet when establishing each year’s charges.
Within the new regulatory framework, and in general, the risks associated with deviations in
cost and traffic demand that actually occur are taken by the airport operator.
Finally, with regard to costs, the model takes into account the dual till established in Spain
through Royal Decree-Law 20/2012 of 13 July. The costs of the regulated services are thus
exclusively covered by those revenues generated from the provision of such services.
3.1 DORA. Airport Regulation Document 2017-2021
In January 2017, the first DORA was approved in Spain. It will be for five years, from 2017 to
2021. Its preparation by the Ministry of Public Works, through the DGCA, has brought significant
challenges for the Spanish administration as this is the first time the complete regulation of a
networked system for a five-year period has been addressed in Europe.
During the years prior to its development and as from the entry into force of Law 18/2014, the
DGCA had to develop some analysis methodologies to deal with the scrutiny of all operational and
financial variables of Aena. These methodologies were based on international benchmarking and
methodologies similar to those used by other European regulators although adapted, taking into
account the size of the network of airports.
The process has been long and complex but it has finally resulted in broad consensus between
the airport operator and all users, who have perceived continuous improvements in the consultation
and transparency processes provided for in Directive 2009/12/EC.
As a result, the DORA 2017-2021 has established the values of the operating variables that will
affect the management of the airports in the Aena network in the coming years. Any analysis
conducted by the DGCA and the results of any consultations with operators in the sector have been
taken into account in adopting the decisions on the parameters established in the DORA.
4This DORA has therefore set a path for tariff reductions by -2.22% for the next five years. A
total volume of investment of EUR 2.185 million has also been approved, which was deemed
sufficient to meet the foreseen demand in terms of quality. In this sense, the DORA 2017-2021 has
established quality standards through a set of 17 indicators that will ensure quality services for the
users
4 FROM IPO TO GLOBAL AIRPORT LEADER
In February 2015, Aena gave the starting signal to the input of private funding and began
trading on the Madrid, Barcelona, Bilbao and Valencia Stock Markets. The price performance during
2016 was very positive with a 23.0% revaluation, and 30.8% in 2017, aligned with the great results
obtained on traffic and revenues along this period, as summarized on Figure 2.
Figure 2: Revenue and traffic figures evolution
Aena revenue comes mainly from the commercial activities of airports and airport tariffs. The
growing trend of traffic experienced in 2016 resulted on a 7.2% increase in general aeronautical
revenues. Airport charges were reduced in 2016 by 1.9% which has resulted in cumulative impact on
revenue and EBITDA coming to 41.6 million euros at the end of 2016.
Likewise, the increase in income generated by commercial activity should be mentioned. In
2016, ordinary income from commercial activity reached 939.8 million euros (25.3% of total revenue)
which represents an increase of 10.5% compared to 2015.
As a future strategy, Aena S.A. continues to base its revenue on three pillars; the increased
volume of revenues, improving management efficiency and cost containment.
4.1 Increased volume of revenues
With the compromise to reduce aeronautical tariff at Spanish airports, the options to increase
revenues will come from increasing traffic figures and improving commercial performance.
As an important contribution to passenger figures, Spain was in 2017 the 2nd most visited
country in the world (only behind France), and air transport is a strategic sector for its economy as
tourism accounts for 10.9% of the Spanish GDP. International tourists visiting Spain have been
growing steadily around 5.9% CAGR for the last years, and we expect that the trend will continue in
the future. This contribution, plus a healthy domestic market, has been important and will help to
maintain the growing passenger rates during next years.
Main goal at Aena has also been to increase economic resources from commercial business line.
With this in mind, the company has taken various measures which have allowed us to yield a profit on
business assets. Amongst which:
• Incorporation of prestigious brands in the commercial offer in place at airports
• Suitability of food and beverage options in line with user profiles, responding to their preferences,
improving the quality of its service and extending their offer
5• Promotion, remodelling and improvement of facilities in VIP lounges to offer a service with the
highest standards of quality
• Entry into the airports of new operators with acknowledged experience and prestige
• Marketing actions and price strategies implemented, with a very positive impact on results.
• Various renovations in duty-free stores. It is noteworthy that the revenue from this business line
grew in 2016 by 13.6% compared to 2015
• Opening of new commercial offers, bids and tenders for stores at various airports.
• Improvements in parking facilities provided to customers through the online services, investment
in equipment, offering different means of payment and new developments that favour the
customer experience within said car parks
• New initiatives aimed at promoting the real estate business in the airport network.
As a result of these actions, 2016 commercial revenue increased 10.5% in comparison with
2015 and a culture has been stablished to maintain this continuous improving procedure in the future.
4.2 Improving management efficiency
Our airports have first class infrastructures as a result of the major investment efforts in the
previous decades. As a result, their capacity has been strengthened and they have been able to cope
with the forward-looking traffic growth figures, without the need to make new investments.
In 2016, investments have been oriented towards a better use of existing facilities, its
maintenance and conservation, and to cover essential aspects such as integrated security, quality of
services, intermodality, environmental sustainability and innovation.
Aena wishes to offer a quality experience in all the services it provides, and has implemented
an ASQ (Airport Service Quality) programme to measure this level of satisfaction. This is a unique
programme worldwide, endorsement by the ACI (Airports Council International) which compares
customer service quality parameters, and according to its 2016 study, our company has achieved a
rating of 3.9 points out of 5, representing an improvement of 0.3 points with respect to 2015.
Belonging to the ASQ programme allows Aena to have on-hand international benchmarking
and make use of a standardised measurement tool for the airports in its network. Some of the most
important actions during this period have been:
• Effective implementation of new handling operators network
• Higher level of demand for these operators, which has led to improved services for airlines and
passengers
• Implementation of A-CDM (Airport Collaborative Decision Making) at Madrid, Barcelona and
Palma de Majorca. It improves the efficiency of aircraft operations, reducing its rotation time,
optimising the use of resources and airport infrastructures and minimising delays
Security, as a must of air transport industry, is also a priority for Aena and have accounted for
24% of Aena’s total investment in 2016. By December 2017, all the airports in which Regulation (EU)
139/14 is applicable will be certified. This certification involves improvements in both safety and
compliance with international technical standards.
Within the Risk Management System, Aena has specific policies and programmes to deal with
natural disasters, adverse weather conditions, terrorist attacks, wars, epidemics or serious aviation
accidents. It also has cooperation protocol with different State Security Forces and Public Emergency
Services to respond to alerts and establish preventive controls. Some measures to improve security
services were:
• Opening specific controls aimed at groups with special needs (families, disabled, etc.) in the
security filters
• Installation of automatic devices for the measurement of waiting times, which will allow for the
reduction and improvement of queue management
• Development and installation of technology projects that improve the quality of the facilities and
services. For example: Inspection equipment to detect explosive liquids, Image analysis
6technology to measure passage times, or Automatic access control (SCAFIS control) optimisation
through security access.
4.3 Cost containment
As part of Aena Aeropuertos viability Plan, strategic guidelines were presented in June 2012 to
increase operating efficiency and ensure the Company’s financial viability. The implementation of
cost control and reduction measures, the adaptation of services, the optimization of operating
schedules to reflect demand, the improvements in contracting procedures, the renegotiation of
contracts and the drop in technical assistance and professional services led to a significant reduction in
operating expenses in 2012, which were down over 5% from 2011.
This Plan included a viability plan for small airports, which adapted the hours of operation to
the demand by adjusting the new schedules to those times with the highest concentration of passenger
and airline activity, reducing the cost of the airport’s services and consumptions. Internal flexibility
measures as well as voluntary retirement plan was implemented, and used by 921 employees to leave
the company, which was successfully completed and the last employees left in the first quarter of
2013.
Cost control measures have continued since 2012, with great results, and have leveraged 15.1%
the operating expenses vs traffic (from 11.8 €/pax in 2012 to 10.0 in 2016) as can be tracked on
Figure 3.
Figure 3: Operating expenses vs traffic (2011-2016 evolution)
Although efficiency levels have already been reached that leave little room for dramatic
improvement in the future, the culture and cost containment measures maintains a continuous process
to keep operating expenses under control.
5 AENA INTERNACIONAL
Aena S.M.E., S.A. (Aena) is a global airport services operator with a significant international
dimension. It carries out its international business activities through the state-owned subsidiary
company Aena Desarrollo Internacional S.M.E., S.A. (Aena Internacional), which has a stake in the
7management of 16 airports in different companies, using the aeronautical experience and know-how
of Aena. It began its activities in 1998 as a vehicle for Aena for its business development objectives
outside Spain; Aena holds 100% of its share capital.
In the worldwide scenario, Aena is the largest airport operator, not only considering total
passengers (Figure 4) but also according to market cap. Volume and airport diversity, are the key
elements to grant a singular and advantageous profile to provide consultancy and management
services to airports all over the world.
Source: Data for airport peers from respective 2016 Annual Reports.
Note: Assumes the following FX rates: EUR/AUD (0.67191), EUR/BRA (0.25932), EUR/CHF (0.91726), EUR/GBP (1.22028), EUR/MXN
(0.04838), EUR/MYR (0.21817), EUR/THB (0.02561).
(1) Total passengers in the Spanish Airport Network and Luton in the UK. Not including traffic in other international subsidiaries
with non-controlling position.
(2) Source: United Nations World Travel Organization. (Tourism Barometer 2016 Edition).
(3) Total passengers in Istanbul Ataturk Airport and in airports with a majority stake.
(4) Total passengers in Frankfurt and in fully-consolidated airports.
Figure 4: Largest Network Operator Worldwide (2016 comparison)
Aena Internacional is responsible for all the functions of its stake in international businesses
and is backed up by the experience, know-how and resources of Aena. Aena Internacional currently
has a stake in the management and operation of 16 airports in four different countries: United
Kingdom, Mexico, Jamaica and Colombia. In the air navigation area, it has an in-flight verification
unit. Additionally, in the sphere of airport consultancy, it participates as an expert in airport
operations in strategic international projects.
5.1 Colombia
Aena Internacional's activity in Colombia is divided between two airports, Cali and Cartagena
de Indias, where it is a stakeholder in the different concessionaires and acts as operating partner.
Cartagena de Indias airport
Cartagena de Indias city airport is managed by Sociedad Aeroportuaria de la Costa S.A.
(SACSA). Aena Internacional has a 38% shareholding in it as operating partner. In 2016,
passenger traffic was 4.4 million, a 12.1% increase from 2015.
8Cali Airport
Cali airport is managed by the company Aerocali, S.A., in which Aena Internacional has a 50%
holding. Colombia’s third airport in passenger numbers, it serves largely domestic traffic (83
per cent of the total traffic), with the Cali-Bogota air route being of great importance. In 2016
the group transported a total of 5.7 million passengers, 9.3% more than the year before.
5.2 Mexico
Aena Internacional operates 12 airports in Mexico and one in Jamaica through its stake in the
Grupo Aeroportuario del Pacifico.
Aena Internacional's stake in Grupo Aeroportuario del Pacifico SAB de CV (GAP), which
operates 12 airports in Mexico, is held via the company Aeropuertos Mexicanos del Pacifico, SAPI de
CV (AMP), which in its turn is a strategic partner of GAP. It owns 17.4% of its capital and has signed
a technical assistance contract. Aena Internacional is the operating partner of AMP, with a 33.33%
stake in its capital.
GAP, one of the largest privatised airport groups on the American continent, comprises the
airports of Aguascalientes, Bajio, Guadalajara, Hermosillo, La Paz, Los Mochis, Manzanillo,
Mexicali, Morelia, Puerto Vallarta, San Jose del Cabo and Tijuana.
On 20 April 2015 GAP acquired 100% of the shares of the Spanish society Desarrollo de
Concesiones Aeroportuarias, S.L. (DCA). DCA has a 74.5% shareholding in the society MBJ Airports
Limited (MBJA), the company that operates the Sangster International (MBJ) airport in the city of
Montego Bay, Jamaica.
In 2016 the total passenger traffic of the Mexican airports of the group was 32.6 million, 18.2
per cent more than in 2015. Montego Bay experienced traffic totalling 3.9 million passengers.
5.3 London-Luton Airport
On 27 November 2013, Aena Internacional and Aerofi SaRL, subsidiary of Ardian (formerly
AXA Private Equity), acquired the concessionaire of London-Luton Airport in the United Kingdom.
Aena Internacional currently has a 51% stake in the company's capital.
London-Luton is the fourth airport in the London metropolitan area, considered the largest
airport market in the world in terms of both the number of passengers and airports, and the fifth in the
United Kingdom for number of passengers, with a total of 14.5 millions in 2016.
This acquisition is part of Aena's strategy to increase its international presence with controlling
shares in strategic airports. In the Aena network it stands in fifth place behind Malaga-Costa del Sol
and ahead of Alicante-Elche.
Aena Internacional contribution goes from technical, commercial or financial support, as well
as in deep dedication to design and supervision during infrastructure works. For instance, Luton
airport is involved on an expansion project to increase 50% its capacity, which main milestones will
be finished in 2018. Aena expertise, well proven procedures and economies of scale, allow our
airports to improve efficiency and to gain additional capacity without penalty on quality of service, as
Luton Figure 5 can exemplify.
9Figure 5: Luton example. Traffic and financial evolution
6 CONCLUSIONS
Aena SME, S.A. is the global leader in airport management scenario, has improved and
optimized the efficiency, diversity and service quality for the last 5 years since the new organization
was implemented. Through the state-owned subsidiary company Aena Desarrollo Internacional
S.M.E., S.A., this knowledge and competence can be applied in other airports and countries, to take
advantage of best practices and optimized procedures already tested on a great diversity of airports,
ranging from big hubs above 50 million passengers a year, touristic and regional destinations or small
heliports and general aviation installations.
REFERENCES
Aena SME, S.A. (2016). Annual Reports from 2011 to 2016
R. Medina (2017). ECAC News #64 Winter 2017. The entry of private capital into Aena
J.M. Vargas (2017). ECAC News #64 Winter 2017. Privatisation and the game changers
United Nations World Travel Organization. (2016) Tourism Barometer.
Web sites:
http://www.aena.es/csee/Satellite/Accionistas/en/Accionistas-e-inversores.html
https://www.london-luton.co.uk/
https://www.aeropuertosgap.com.mx/en/investors.html
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