Airports in 2050Toulouse, 30th May 2012

Andreas DeistlerFraport AGCorporate DevelopmentMarket & Trend Research

Fraport at a glance

Airport operator with integrated business model

Showcase Frankfurt Airport:• 56.4 Mill. Passengers• 2.25 Mill. Tons of aircargo• 487,000 Aircraft movements

Since 2001 stock listed company:• 52% of stocks in public hand• Market capitalization >4 Bill. EUR• Despite 2002 ever since profitable

4 Business Segments:• Aviation 19% of EBIT• Ground Handling 4%• Retail and Real Estate 47%• External Activities 30%

But Fraport is more than just FRA…

Cargo handling

Property management and preparation

Air traffic

Terminal operation

Security services

Retail management

Parking facility management

Passenger services

Innovations management/

technology development

Non-aviation Ground handling

Space and building rentals

Aircraft services

Baggage service

Aviation

Note: All figures are from 2011

RevenueEBITDANet profit

in Mi

ll. EU

R

Fraport at a glance

Frankfurt Airport Burgas Airport Varna Airport

Cairo International Airport

Aéroport International Blaise Diagne, Dakar

Xi´an Xianyang International AirportKing Abdulaziz Internation Airport, Jeddah

Flughafen Hannover-Langenhagen

Antalya AirportIndira Gandhi International Airport, Delhi

Jorge Chávez International Airport, Lima

King Khalid International Airport, Riad

Pulkovo International Airport, St. Peterburg

Over 75 Years of Experience in Airport Management!Responsible for 13 Airports with 200+ Mill. Passengers!

Fraport at a glance

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Frankfurt Airport 2025Frankfurt Airport 2025

If you want to look forward, you have to look backward first!

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The 1970's: Designing iconic gateways for a new generation of aircraft

1960 20001970 1980 1990

80m x 80m Aircraft stands

300+ Seats gates

Airport pier or satellite layout concepts

Decentralized airport layouts

Airport considered as interface between car and aircraft

Introduction of airbridges

...

The 1970's: Designing iconic gateways for a new generation of aircraft

1960 20001970 1980 1990

Parallel runways

Futuristic architecture and design

"Functionality follows form"

Today's nightmares in terms of efficient process (re-)design & infrastructure operating cost

Very representative, but not very passenger focused

© Dmitry Avdeev

The 1980's: Liberalization makes flying affordable

1960 20001970 1980 1990

Charter carriers and tour operators make the Mediterranean accessible for mid-class travellers

New target groups get used to fly into their summer holidays and so they get used to all airport related processes as well

© SpVgg Freudenstadt

The 1980's: Liberalization makes flying affordable

1960 20001970 1980 1990

Charter carriers and tour operators make the Mediterranean accessible for mid-class travellers

New target groups get used to fly into their summer holidays and so they get used to all airport related processes as well

Hub and spoke airline concepts split airport world in two categories: hubs and spokes © John-Morgan

The 1990's: Connecting the world

1960 20001970 1980 1990

In little: Intermodality is the new key topic for airports

More and more airports get connected to the railway network; short haul flights, feeder flights now "on flight level zero" by train

© Fraport AG

Long distance train station Frankfurt airport

The 1990's: Connecting the world

1960 20001970 1980 1990

In little: Intermodality is the new key topic for airports

More and more airports get connected to the railway network; short haul flights, feeder flights now "on flight level zero" by train

© Fraport AG

On a grand scale: Globalization of the airline world: Airline Alliances emerge

For airports: all alliance members "under one roof"

The 2000's: Revolving the aviation industry

1960 20001970 1980 1990

Rise of the low cost carrier business model:

Aggressive marketing and competitive advantages of LCC lead to an airline consolidation in Europe

Airports react: designated low cost gates, piers, terminals, - even special low cost airports along with airport process re-design

However: LCCs squeeze airports heavily for landing fee discounts

Retailing as the new revenue source! © Fraport AG

The 2000's: Revolving the aviation industry

1960 20001970 1980 1990

Passenger spendings now in the focus of the airport

Airports transform into shopping malls with central plaza and add-on runway

New customer groups: flying becomes now a comodity

Conflicting interests: Airline passenger at the gate in time Airport passenger at retail area as long as even possible Business travelers hate to cross 'shopping labyrinths', but are 'high value' customers on the other side

Concept design-study for Frankfurt airport's all new central market place:

The 2000's: Revolving the aviation industry

1960 20001970 1980 1990

Problem: Security got an costly issue! > Staff, floor space, time, convenience…

The events of 9-11 changed airport life, airport processes and – at the end of the line – the whole airport layout:

Secure flight passenger data collection

Enhanced passenger screening

Full baggage screening

Liquid ban

All cargo screening, etc.

What's the current discussion about?

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The 2010's: Airports transform to Airport Cities

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Shift of the travelers basic needs for "housing", "working", "supply" and "entertaining" more and more towards the airport

The Airport City emerges as a place for "living"

A new species is spotted: the homo aeroportis globalis

Airport operators now in the role of a major of a city with urban lifestyle, cultural events etc.

Evolution of the

homo aeroportis globalis

The 2010's: Airports transform to Airport Cities

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Automation vs. personal approach:

CUSS terminals, e-gate, self-boarding, easy-pass border control, etc. for standard procedures

Helpful hands, a friendly smile and on-demand tailored services according to the specific needs of each traveler for the individualized human touch and a unique travel experience

To summarize: What were the main trends of the last 40 years in airport development?

Iconic architecture / Function follows form

Capacity (constraints) / new customer groups

Global connectivity / intermodality

Specialization / professionalism

Automation / self service

New revenue sources / retailing

"Location quality" / Service diversity

Human touch / Individualization

Safety ("safety inconvenience")

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So what's in the pipeline for the next 40 years?

Recent trends will continue, however convenience and individualization of service offers as well as customer approach will increase

Processes at airports will follow development of aircraft industry with development periods of 20+ years (40 years = 2 development cycles):

Aircraft STILL will have 4 wings, MAYBE a blended wing body

NO vertical take-off and landing

NO automated personalized aircraft technology

NO hypersonic aircraft or airship for mass transport

…and definitely there will be NO beaming!

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To summarize: Airport layout will stay the same as today, evolution will happen under

the roof

Runways, terminals, land and airside access will stay familiar

Change will happen under the airport roof:

New technologies

New gadgets

New functionalities…will influence process layout…will determine the airport experience…will guarantee a personal approach

to the passenger…will make travel more convenient

Key to reach these goals: data connex

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The 2050's: Making travel a personalized & convenient experience just by linking data

Horizontal data connex along the travel chain:

Booking agency / machine

Tour operator

Transportation modes to/from airport

Airport / Airline

Vertical data connex with travel related branches:

Authorities > security

Shopping / banking / fulfillment

Preferences / behaviors / networking

Orientation / special assistance needs

Seamless / door to door travel etc.…

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„Can you imagine that they used to have libraries where the books didn‘t talk to each other?“

Marvin Minsky, *09.08.1927

The 2050's: Making travel a personalized & convenient experience just by linking data

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The "books" of today:

Information / Profile "cloud"Information / Profile "cloud"

The 2050's: Making travel a personalized & convenient experience just by linking data

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The inter-"faces" of tomorrow?

The 2050's: Making travel a personalized & convenient experience just by linking data

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Good Morning Mr. Deistler,I am sure you had a safe and stress free trip to Frankfurt Airport?!Your booked flight with Pan European Airways 458 to New York is on time.It's departing at 1:30 pm from gate B40. There is 1.5 hours left to your departure. Your bag is already cleared and will be delivered to your hotel in New York.By the way: My name is i-Michelle. Do you want me to assist you with orientation and timekeeping at the airport today?

The 2050's: Making travel a personalized & convenient experience just by linking data

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Of course you are already safety checked as well, Mr. Deistler!

This is an automated screening procedure as soon as you enter the building!

The 2050's: Making travel a personalized & convenient experience just by linking data

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Since it's noon, - do you care for some light lunch before your flight departs?

From your preferences we know, you like Sushi. – It just happened, there opened a new Sushi bar in Area B. Do you want me to make an immediate reservation and take you there?

The 2050's: Making travel a personalized & convenient experience just by linking data

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Mr. Deistler, from your last trips we learned, you like to shop for some delicious Jamaican Rums in our duty free outlets. Since you are a valued customer, today we would like you to offer a bottle of Brand X Rum for only 269,- Euros. –

How about that?

Do you want to pick it up here, shall we send it home, to your hotel in New York or to any other address?

The 2050's: Making travel a personalized & convenient experience just by linking data

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Mr. Deistler, as you know, your wife's birthday will be next week. –

How about a Chanel No. 5 flacon together with 20 red roses and a birthday card as a surprise delivered to her on that special occasion? –

It's only 429,- Euros!? –

And for sure your wife will be amazed since this is her favorite perfume! - She just posted this information to her best friend…

The 2050's: Making travel a personalized & convenient experience just by linking data

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Oh dear, Mr. Deistler, we do not think it's such a good idea to use the bathroom yet! –

Your gate is going to close in 6 minutes and there is still 4 minutes walking distance…!

However, I will contact the gate crew and send a message that we are on the way!

Since you are premier member of the airlines' frequent flyer program, they should be willing to give you an extra minute!

Anyway, please hurry up!

The 2050's: Automated but customized processes provided by "the robots",…

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…but unexpected, unique & friendly service "add-

ons" bring back the human touch of travelling!

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Well, -

we Germans are well known for efficiency, but not too well-known for our friendliness…

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...but we can learn!

Fraport already learned one lesson:

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"It's not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change!"

Charles Darwin

At Fraport always a lot of trans-

formation is in progress to stay competitive in tomorrows world!

Vielen Dank. शुिबया.

Thank You.고마워. Cпасибо. 有難う.Gracias. ขอบคุณครับ.

Tesekkür

ederim.ُشْكرا .

谢谢.Merci.

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Contact:

Fraport AGPhone: +49-69-690-61167 Fax: +49-69-690-71509 Email: a.deistler@fraport.de

Andreas DeistlerSenior Analyst & Forecaster

Market and Trend Research