SEA GROUP POLICY FOR THE DEVELOPMENT OF TRAFFIC AT MALPENSA AIRPORT Foreword The recent dynamics of the international aviation market, in a context of gradual deregulation with regard to both traffic rights and pricing, are characterised by growing competition, among both airports and airlines. Such a development suggests the need, on the airport operators side, to adopt marketing policies aimed at achieving specific market targets and priorities. Airport operators need, as independent business entities, to be recognized wide and adequate autonomy with regard to commercial decisions, has also been explicitly affirmed by ACI Europe, the European airports association representing all the major industry players. As acknowledged by ACI Europe, the evolution of the aviation market has led to a gradual increase in competition among airport operators, resulting in "increasingly intense competition for route and traffic development" and the "need for full autonomy in managing their business. In this context, SEA has adopted a policy consisting of a series of tools aimed at achieving market development targets coherent with the Group's overall growth strategy, also in the light of what indicated by the National Airports Plan which has reaffirmed the centrality of the role of Malpensa airport as the reference "Intercontinental Gate" for Northern Italy. Strategic targets of SEA Group SEA, seeking a strategy of constant growth of Malpensa airport s network, to the benefit of its extensive catchment area, considers the following air traffic development targets a priority to achieve: development of the long-haul destination network (Att. 1); frequency increase on strategic long-haul destinations (Att. 2); development of the short/medium-haul destination network; new operators positioning at Terminal 1, with aircrafts based at the airport, and/or large volumes of traffic generated; development of connecting traffic; seasonal adjustment of the operational plans of scheduled passenger airlines; development of long-haul all-cargo and courier air services; use of aircraft with low environmental impact. Incentive programmes SEA has defined a three-year programme, effective from the 2015/2016 Winter season, budgeting an amount to be allocated for the achievement of growth
targets and in consideration of the development dynamics of individual market segments. A specific incentive criteria is defined for each objective and will be awarded according to actual results, to those airlines achieving the requested growth levels. This commercial policy is offered on a transparent and non-discriminatory basis, by means of ensuring a level playing field for airlines wishing to adhere to it. This programme is not applicable to airlines with which commercial agreements are already in place or, in any case, to routes that benefit from various forms of support provided by public entities (i.e.: Public Service Obligation). SEA, anyhow, reserves the right to extend the programme to routes for which the airline may already receive support from other entities. Long haul: incentive in proportion to the average number of weekly flights to the new destination or incremental frequencies, to be quantified at the end of the first year of operations and with the possibility, for selected markets, of extension up to 3 years. Short/medium haul, connections, operations development and positioning plans at T1: incentive in proportion to the number of departing passengers, or of seats offered, to be paid on an annual basis and subject to achieving a predefined minimum target in terms of volumes. With regard to new services to destinations already operated by other airlines, incentive equal to a predetermined fixed amount, in proportion to the average number of weekly flights operated on an annual basis, to be paid on actual results Seasonal adjustment of scheduled operational programmes at T1: incentive in proportion to the average number of incremental weekly flights operated during the winter season, compared to the past operations of the airline to the same destination, referring to the same specific IATA season. All-cargo long haul and courier: incentive in proportion to the average number of weekly flights for new all-cargo long haul services and multi-year positioning plans at the airport, to be quantified at the end of the first year of operations and with the possibility, for selected markets, of extension up to 3 years. SEA, considering the essential principle of free entrepreneurial activity, also with regard to the incentive criteria, reserves the right to evaluate further support tools, as well as the allocation of specific non-pecuniary benefits in terms of comarketing, for development projects considered to be of particular importance for the airport's growth and accessibility of the area. Application to the programme Airlines interested to participate to the incentive programme should contact SEA, Aviation Business Development Department, email: aviationdevelopment@seamilano.eu, at least 60 days prior to the beginning of each relevant IATA season for the development project.
SEA, in exceptional cases, also reserves the right to evaluate applications received at a later stage. The expression of interest of airlines must contain at least the following information: date of start-up of the flight(s), duration and seasonality of the programme; destination(s) aircraft used and/or seat capacity offered for the IATA season number of weekly frequencies estimated additional (passenger/cargo) traffic generated. sale channels (internet, agency distribution, etc.) interline agreements for traffic promotion support and promotion of the ViaMilano system advertising campaign on traffic, on Malpensa airport and on Milan and Lombardy destination statement concerning financial support and/or marketing contributions received by other public and/or private entities with reference to the routes for which SEA support is requested. SEA will evaluate applications received, taking into account both the financial/strategic appeal of the submitted project as well as the economic/financial profile of the proponent. With reference to certain types of incentive programmes, SEA may grant the planned benefits to two or more airlines. Payment of incentives is subject to the signature of a specific agreement between SEA and the airline to govern the detailed terms of the agreement. SEA reserves the right to amend/update this policy according to the market
Att. 1 Destinations eligible for the "development of the long-haul destination network" incentive: Accra Bangalore Bogotà Boston Buenos Aires Canton Caracas Chennai Chicago Dallas Detroit Hanoi Ho Ci Minh Houston Johannesburg Kuala Lumpur Kuwait City Lagos Lima Los Angeles Manila Mexico City Montreal Mumbai Nairobi Osaka Philadelphia Rio de Janeiro San Francisco Seattle Sydney Taipei Washington SEA reserves the right to amend this list at any time according to the market
Att. 2 Destinations eligible for the "frequency increase on strategic long-haul destinations" incentive: Bangkok Hong Kong Sao Paulo Shanghai Singapore Toronto SEA reserves the right to amend this list at any time according to the market