Futures near and far... an airports view. 12-July-2016 Chris Schneider

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1 Futures near and far... an airports view 12-July-2016 Chris Schneider

2 Content: Mobility environment in 2035 The aviation market the demand side The infrastructure supply side Munich Airport heading to the future Conclusion and questions

3 Trends, trends. The pace of societal development & change has increased enormously. Social inclusion Personalisation The connected citizen Secure & Sustainable Mobility 24/7 Healthy lifestyles Smart & Integrated Mobility Cyber-attacks Digital Society Urbanisation NIMBY-ism Demographic change Virtual world Share economy Global warming Co-Creation Decentralisation Participation Circular economy 3

4 Disruptive change is in the air. The application and integration of new technologies offer a plethora of new services that can shake up the world as we know it.. Automation & Connectivity Battery technologies 3D printing Smart Systems Drones Industry 4.0 Internet of Things Intelligent transport Systems Hyperloop Smart cities Digitalisation Autonomous Vehicles Alternative Fuels Virtualisation Big data Electrification of transport Blockchains Position based information 4

5 Uncertainties Just because something is technically feasible and sounds good on paper does not mean it will be a huge market success or trigger disruptive change. Innovation has its own rules and dependencies. Societal Acceptance Evolution or Revolution Big brother Marketplace Security Market Pull Automation vs. Labour Liability issues Politics Distribution of wealth Technology Push Global Warming Fragmentation / centralisation Speed of change Regulation Human role Economical Development More or less mobility 5

A coherent ground infrastructure is developed Flights land within 1 minute of the planned arrival time An air traffic

6 The mobility challenge set out by ACAREs Flightpath 2050 European citizens are able to make informed mobility choices 90% of travellers within Europe are able to complete their journey, door-to-door within 4 hours. A coherent ground infrastructure is developed Flights land within 1 minute of the planned arrival time An air traffic management system is capable of handling 25 million flights a year in Europe Advisory Council for Aviation Research and Innovation in Europe 6

7 Addressing this mobility challenge means. A shift from mode-specific to integrated transport solutions (door-to-door vs. airport-to-airport) Need to harmonize processes and interfaces between travel modes Need to enable seamless flows of passengers and freight through the system in order to meet d2d mobility performance targets Need for a step-change in predictability and punctuality of transport operations Customer-centric system also means liberalised and competitive transport market Informed mobility-choices by customers require guidance provided without any bias towards providers or modes Integration and co-operation is key for customer-centric mobility 7

A simplified journey involving air travel Travel improvements: Travel decisions based on unbiased information according individual travel preferences (e.g. environmental footprint, cost, reliability, punctuality, health aspects etc.

8 A simplified journey involving air travel Travel improvements: Travel decisions based on unbiased information according individual travel preferences (e.g. environmental footprint, cost, reliability, punctuality, health aspects etc.) Integrated door-to-door travel planning, booking, ticketing and payment (one contract for whole journey) Door-to-door (multimodal) travel monitoring & reconfiguration reduces uncertainty, buffers and stress Integrated airport processes provide a hassle-free and predictable walkthrough experience Sufficient system capacity and integration allows customers freedom of choice and unprecedented reliability, service and punctuality levels. 8 9/12/ Source: Munich Airport

9 The aviation market the demand side Seite 9

10 The market environment... Airbus Global Market Forecast Boeing Current Market Outlook Embraer Market Outlook EUROCONTROL IFR Long-Term-Forecast Source: Airbus, Boeing, Embraer, EUROCONTROL 10

11 The market environment... Only domestic traffic within China is forecast to outperform intra-european and North American traffic growth until 2034 (absolute growth, RPK): China--China Europe--Europe North America--North America Southeast Asia--Southeast Asia Rest of World South America--South America South Asia--South Asia Europe--Middle East Europe--North America Middle East--South Asia China--Southeast Asia China--North America China--Europe Africa--Europe CIS Region--International Central America--North America Europe--South America North America--South America Middle East--Southeast Asia Southeast Asia--South Asia RPK (billions) Europe North America Data source: Boeing CMO 2015

12 The market environment... Europe and North America will be among the top three regions with regards to absolute traffic growth until 2034 (RPK): Europe China North America South East Asia Middle East South Asia South America Africa Traffic growth North East Asia Oceania Central America Rest of World CIS RPK (billions) from / to / within 12 Data source: Boeing CMO 2015

13 The market environment source: Airbus GMF 2015

14 The market environment source: Airbus GMF 2015

15 The market environment source: Airbus GMF 2015

16 The business environment... hampered or enabled by regulations Airport Curfews Infrastructure ETS Best conditions Productivity worst conditions pax taxes Best conditions Cost of employment fiscal conditions Air transport seen as strategic asset Source: Handelsblatt Research Institute 16

17 The infrastructure supply side

18 The market environment Eurocontrol study Challenges of growth source: eurocontrol

19 The market environment airport capacity will limit air travel Global growth Regulated Growth Happy Localism Fragmenting World about add. daily mvts. In Germany Dotted lines unconstrained growth Solid lines Growth constrained by airport capacity 19

20 Challenges for growth scenarios are based on completion of planned infrastructure projects... This cannot be taken for granted E.g. official planning for a third runway in MUC began in 2005, legal approval was obtained in 2012 and confirmed in

but construction is blocked by the city of Munich, whose citizens voted against it in 2013 In spite of no additional noise exposure for Munich very limited

measures airport proven to be a key locational factor for local business and tourism industry 2.5 new jobs per day since airport opening in 1992 15.

21 but construction is blocked by the city of Munich, whose citizens voted against it in 2013 In spite of no additional noise exposure for Munich very limited additional noise exposure to airport neighbours no night operation (22:00 until 06:00) on new runway comprehensive plan of noise protection and soundproofing measures airport proven to be a key locational factor for local business and tourism industry 2.5 new jobs per day since airport opening in new jobs related to new runway Airport indirectly securing jobs in the region no taxpayers money used or required long term growth forecast of aviation... Source: 21

22 Challenge to Growth Airport Capacity Airports w/ summer delay (in minutes/flight). Source: EUROCONTROL 22

Properties and scales of Hub- and Point-to-Point traffic Munich served a total of 199.000 city pairs in 2014 (with at least one pax/ year). Only 69 of those 199.

23 Properties and scales of Hub- and Point-to-Point traffic Munich served a total of city pairs in 2014 (with at least one pax/ year). Only 69 of those city pairs generate more than 10 pax / day connecting at MUC The top city pairs generate more than 1 pax / week connecting at MUC On average each of these top city pairs generates 1,3 pax / day connecting at MUC About city pairs being served with direct flights worldwide with at least 1 pax / week out of airports. Each of these routes is being served by 1.9 airlines on average. The average pax number of these direct flights is 78 23

24 Will Hubs continue to play a role in European connectivity? City pair grouped per PPDEW # of city pairs MUC # of city pairs LHR # of city pairs CDG City Pairs grouped according to share of connecting pax at MUC Less than 1 PAX/ week 13% % % % Less than 1 PAX/ day 16% % >1 PAX/day < 1 PAX/week % % Data Source: SABRE Market Intelligence, 2014 Given the low passenger numbers on city pairs served it is hard to conceive how hub connectivity could be replaced by point-to-point traffic... 24

High-Speed-Train - Enabler & Competitor HST competes

transport Can offer comparable transport times for

security hassle, shorter distance to the city center (?

25 High-Speed-Train - Enabler & Competitor HST competes with and/or complements short-haul passenger air transport Can offer comparable transport times for distances up to 800km Lower risk of delay, less security hassle, shorter distance to the city center (?) HST serve as a comodality by providing feeder services for air travel. 25

26 High-Speed-Train Enabler & Competitor at app.3.5 hours, the majority of people start to prefer the train over flying. At app.3.5 hours, the majority of people start to prefer the train over flying. Can short-haul flight become more attractive, compete with or compete with HST? Source: Silverrailtech 26

27 Munich airport heading to the future

28 Airside 2035 (hopefully!!) just enough to cope with projected 28

29 Airport City 2035 more uncertainties here than airside (e.g. capacity of car parks, etc.)

Munich Airport - Last airport access modes 2015

Car, Car-Sharing 13% Bus, Transfer services, surrounding

of the originating passengers use the car for reaching

Of those park for the duration of travel Taxis and

000 originating passengers use off-campus parking

Pax use suburban railway for airport access 30 Flughafen

30 Munich Airport - Last airport access modes 2015 Originating passengers TAXI 38% Car 13% Taxi 7% Rental Car, Car-Sharing 13% Bus, Transfer services, surrounding area parking 29% Suburban railway 4,9 Mio. of the originating passengers use the car for reaching the airport. 1,2 Mio. Of those park for the duration of travel Taxis and rental cars are important airport access modes originating passengers use off-campus parking facilities (mostly leisure pax) 3,8 Mio. Pax use suburban railway for airport access 30 Flughafen München GmbH, GB Aviation Marktforschung/ Verkehrsstrukturdaten 2015 Quelle: Fluggastbefragung 2015; Basis hochgerechnet 13,0 Mio. Originäreinsteiger

31 Munich Airport: accessibility by rail and car Public transport Car The accessibility by car is by far superior to train 31

32 Feasible reduction of travel time to Munich Airport by improved rail access 32

33 Data processing and analytics have to become much smarter - All partners need to work together to create a true seamless travel experience for our customer The Customer 33

B2B-Systems ETA S1 Flughafen- München Hbf Pax Flug

Altona Flughafen München BMW 1er M-DX5784 ETD Flug

designed offers of whole travel travel journeys with

information & Liability Intermodal Mobility-

mobility providers Buildings blocks of intermodal

34 Mobility 4.0 Concept Visualisation Open B2C-Systems Closed B2B-Systems ETA S1 Flughafen- München Hbf Pax Flug U25283 MUC-LGW Capacity ICE880 München Hbf- Hamburg Altona Flughafen München BMW 1er M-DX5784 ETD Flug LH413 EWR-MUC München (Flughafen) -Budapest (Nepliget aut All.) STA STD Customer-Specific Offers Customer specific designed offers of whole travel travel journeys with single point of contact for booking, (realtime-) information & Liability Intermodal Mobility- Marketplace Standardised mobility offers of all mobility providers Buildings blocks of intermodal travel journeys CDM-Mobility-Process - Plattform Common Situational Awareness Basic process information for real-time information exchange and intermodal travel journey management 35

35 Airports have to provide more than shopping experiences we have great success with our Munich Airport Center (MAC) forum connecting the terminals... 36

36 ... which is the perfect location for various events 37

37 Conclusion. and Questions Seite 38

38 Conclusion Times are interesting right now, with the pace of innovation fast but still hard to assess Continuous growth is forecast for the air transport market While Europe may show slower relative growth rates, absolute growth is still very significant Airport capacity will be THE issue when it comes to coping with demand and may actually limit growth and mobility in Europe Hubs will continue to be essential for connectivity around the world Airports have a strong interest in promoting intermodality as a win-win with other transport modes Digital services are key for reducing time buffers and waiting times at airports, thuis bringing us closer to ACAREs 4hr d2d goal. Airports will increasingly have to provide services other than shopping to ensure their business model 39

39 . and Questions What is your gut feeling, do we need to evolve our current systems, or do we need disruptive solutions (in any travel segment) to achieve the 4H D2D target? These clearly require very different approaches. Information technologies are already supporting informed mobility choices in Europe, it seems. But are they really? How can we pave the way to real transparency to be able to compare journey options in an unbiased way for specific user preferences? What other changes are needed, e.g. regarding affordability and equity, and do air transport stakeholders have a particular role to play in this? Is the 90% 4H D2D target the right metric for measuring progress? How could it be enhanced? How well can we estimate progress so far, and does it feel like an achievable goal? Who are the key players in achieving the goal and what are the key conflicts that need to be resolved? What have been the key contributions to improved punctuality from ATM in recent decades, and what more can we reasonably expect by 2035 and 2050? With regards to what you heard this morning, Do you expect disruptive changes regarding passenger management? What key areas of improvement can we expect at the airport, considering both airside and landside processes, to increase the predictability of processes? If more runways are the answer to airport capacity issues, how can we get public consensus on this need? Who is responsible for airport accessibility? 40

40 Thank you

ASDA Session 3: Airport Performance More Punctuality. 11-November-2016 Chris Schneider

ASDA Session 3: Airport Performance More Punctuality 11-November-2016 Chris Schneider Content: ACARE Mobility challenge The aviation environment The punctuality (and predictability) challenge ACARE Mobility