Traffic at OSL in 2005

Transcription

1 Annual report 2005 Oslo Lufthavn AS (OSL) experienced another year of strong passenger growth in 2005 with almost 16 million passengers passing through the airport during the year. This strong growth was a consequence of increased competition at the airport, with a number of new destinations for passengers to choose from. One important event for the airport was the opening of the duty free shop in arrivals after new rules allowing this came into force on 1 July Sales at OSL started on the same date and the great interest shown in this service led to the company building a new shop during the autumn, which was ready in time for Christmas. Despite the fact that it is at a lower level than before, OSL still ranks near the top in Europe with respect to punctuality. OSL was ranked fifth in 2005 by the Association of European Airlines was otherwise characterised by preparations for the new security requirements that apply from 1 January The new security requirements will have little impact on passengers; instead they are primarily directed at the control of access to the airport by personnel and vehicles. The company s operating result (before financial items) was NOK million, which is NOK million better than in The result after tax was NOK million. Traffic at OSL in 2005 Passengers Passengers Change in % Scheduled domestic 7,398,264 7,698, % Charter domestic 16,960 17, % Scheduled international 6,257,800 6,956, % Charter international 1,192,436 1,222, % Total 14,865,460 15,896, % 15,896,148 passengers passed through OSL in This is 1,030,688 more than last year. This is the highest passenger figure recorded for a single year in OSL s history. The most popular routes in 2005 were: Bergen 1,426,600 passengers Trondheim 1,400,826 passengers Copenhagen 1,263,326 passengers Stavanger 1,110,549 passengers The largest growth on international routes was traffic to Munich, which saw 60,000 more passengers. Other international routes that grew sharply were Stockholm, with 57,000, and Prague, with 45,000 more passengers in 2005 than in The biggest increase for charter was to Turkey, with 20,000, and to the Canary Islands with 18,000 more passengers in 2005 than the year before. For domestic traffic, the biggest increase was on the routes to Stavanger (78,000), Bergen (74,000) and northern Norway (110,000 to Bodø, Harstad / Narvik, Tromsø, Alta and Kirkenes). Eight airlines opened a total of 18 new international routes in 2005: 13 year-round routes and 5 seasonal routes. In 2005, OSL had routes to 71 international airports and 24 domestic airports. Annual Report Oslo Lufthavn AS Page 1 of 9

2 The SAS Group is the biggest customer, carrying 59.5% of passengers in Norwegian had 16.1% of the passengers. Viewed in relation to comparable airports in neighbouring countries, OSL s increase of 6.9% means it experienced greater growth in 2005 than Arlanda (5.2%) and Copenhagen (5.0%). The main reason for this is the strong growth in international traffic at OSL. Air transport movements Air transport movements Change in % Scheduled domestic 93,111 94, % Scheduled international 81,046 84,816, 4.7% Charter 7,160 7, % Cargo 5,464 4, % Other (GA, military, etc) 9,574 10, % Total 196, , % A greater increase in the number of passengers than in the number of air transport movements means an increase in the cabin factor, and for 2005 this was 68% compared with 65% in Cargo and mail The total number of tonnes of cargo and mail to/from OSL was 84,270 tonnes in This is an increase of 6,242 tonnes or 8%. The increase in volume is largely due to larger cargo aeroplanes than before, and this is to a great degree related to the transport of salmon. Comparison with the other major airports in the Nordic Region Airport Passengers (1000) Growth International % Punctuality Oslo 15, % 51% 84% Copenhagen 19, % 92% 84% Stockholm 17, % 66% 83% Helsinki 15, % 63% 85% Source: Airports websites and statistics from the Association of European Airlines Turnover In 2005, OSL s turnover totalled NOK 2,535.7 million, which is an increase of NOK million in relation to OSL s revenues come from two sources: 49% of its revenues come directly from airline traffic passing through the airport, and these revenues are invoiced based on the number of departing passengers and takeoffs from the airport. These revenues increased by NOK million from 2004 to The rest of the revenues come from derived activities such as the leasing of floor space to retail businesses, servicing, parking and other use of the building and site related infrastructure. The proportion of revenue from derived activities increased in The primary reason for this was the opening of the duty free shop in arrivals on 1 July Revenues from such derived activities are heavily dependent on traffic trends, especially international traffic. Annual Report Oslo Lufthavn AS Page 2 of 9

3 Expansion Project Central Hall 2005 started up at the beginning of August The aim of the project is to modernise and expand retailing and food services for passengers in the passenger terminal. A new section of the duty free shop opened at the beginning of 2005, while operation of the shops was transferred to a new contract partner. New places to eat were opened in May and August A new bookshop opened at the end of June, and at the end of August a large cosmetics retail outlet opened for domestic flights, charging the same prices as the duty free outlet for international flights. Just before Christmas 2005, a new 650 m² duty free shop opened in arrivals. A three-stage plan has been developed for upgrading the baggage handling system to ensure operating stability and increase the system s capacity. The first phase of the expansion was carried out during autumn 2004, and comprised establishing more robust solutions for dealing with system stoppages. Phase two started up in 2005 and consists of establishing a new area for manual checks and the replacement of x-ray machines in the facility. This will provide us with more robust solutions in the event of operational halts in the facility. This phase will be completed in spring Phase three consists of replacing the remaining x-ray machines; this will start in autumn 2006 and be completed in the beginning of The EU2 Security Project is a consequence of stricter security requirements from the EU. Planning for this started in the middle of May when the ground rules for it became available and implementation started in Q Most of the measures were completed for 1 January 2006, and by 1 March 2006 all of the work will be finished. All employees must now undergo security checks prior to gaining access to security restricted areas. Going concern assumption The annual accounts and report have prepared on the basis of the going concern assumption. This assumption is based on the result forecasts for 2006 and long-term prognoses for subsequent years. The company s equity is low, but the company is nonetheless in a healthy economic and financial position since the company has a subordinated loan of NOK 2,371.3 million, which has priority over other debt. Result, investment, financing and liquidity The result for 2005 was a profit of NOK million before tax and NOK million after tax. The equivalent figures for 2004 were NOK million and NOK 89.1 million. The company s balance sheet total on 31 December 2005 was NOK 10,761.0 million. Our assets consist primarily of airport investment in the form of runway systems and buildings. Our equity and liabilities consist primarily of NOK million in equity, NOK 2,371.3 million in a subordinated loan from Avinor AS, and a long-term loan from the Ministry of Transport and Communications of NOK 6,415.5 million. In connection with the establishment of the parent company as a limited company as of 1 January 2003, OSL was granted an interest-only period for three years on the government loan. Due to good cash flow, principal repayments were resumed in December 2004, and the company thus repaid NOK million in principal on this loan in The company s overall investment in fixed assets in 2005 totalled NOK million. During the year the company received a NOK million refund of VAT relating to construction costs. The company has no distributable equity as per 31 December The company s financial standing is satisfactory, and as of 31 December 2005 it is able to repay short-term liabilities and Annual Report Oslo Lufthavn AS Page 3 of 9

4 make principal repayments on long-term liabilities by means of its liquid assets. The subordinated loan from Avinor AS is prioritised after all other liabilities. Within this result OSL paid NOK 218 million in ground rent and NOK 87 million in interest on the subordinated loan from its parent company, Avinor AS. Financial risks Market risk The company is exposed to changes in long-term interest rates since a substantial portion of the company s financing (the government loan) is tied to long-term government bond yields. The company is marginally exposed to currency fluctuations. Credit risk Up until today, OSL and its parent company Avinor AS have experienced low losses on receivables from our primary customers, the airlines. Some of them, however, have for some time been struggling to achieve satisfactory profitability. In light of this, the company considers there to be a moderate risk that customers will be unable to meet their obligations. Liquidity risk The company considers the liquidity in the company to be satisfactory. Safety OSL s management and control system has developed into an integrated system for ensuring improved quality, including safety, security, health, the environment and employee safety. In 2005, the main focus was on: Training and information linked to the use of OSL s management and control system. Risk assessments and risk analyses, and following up of risk reduction measures. Safety levels and acceptance criteria. Following up the European Action Plan for the Prevention of Runway Incursions (runway collision risk). An increased focus on routines for the incorporation of statutory requirements in the chain of authority, as well as intensified internal control and audit/inspection activities. OSL s safety work has in recent years developed from being a traditional incident based system to also including elements of risk management. The solely incident-based system involved basing training and improvements on instances of non-compliance and incidents that had already occurred. The risk-based portion of the system now includes management principles and tools for catching potential incidents and instances of non-compliance before they occur. The implemented risk-based elements include the utilisation of risk analyses in the event of changes and the selection of inspections and audits on the basis of risk. In 2005, seven aviation-related incidents were registered in OSL s area of responsibility on runways/taxiways and in air space, compared with nine in In the wake of these incidents, several actions and follow-up measures were instituted focusing on safety-related improvements and on improving operational systems. Four of the incidents were reported to the Accident Investigation Board - Norway (AIBN) for civil aviation and railways. Annual Report Oslo Lufthavn AS Page 4 of 9

5 The company has developed a new non-compliance system, which is integrated into the company s system for management, operation and maintenance. The non-compliance system will also be used to follow up instances of non-compliance from inspections, recommendations, and risk reducing measures relating to serious instances of non-compliance/unwanted incidents. AIBN issued a report on the implementation of aviation safety in Norwegian air space during restructuring processes. In cooperation with union representatives and the management, OSL has drawn up an action plan to follow up on the report s recommendations that are of particular relevance to the company. In 2005, OSL focused on planning, constructing and implementing new statutory requirements, which includes the new requirements regarding the security control service. The statutory requirements implement EU Directive 1138/2004, which officially came into force in Norway on 1 January The main challenge has been to plan the construction with regard to optimum operation of the airport for all players while complying with the statutory requirements. OSL conducted several minor crisis management drills. Audits and supervision In accordance with the company s areas of focus, internal reviews, in the form of audits and inspections, focused on safety issues. In the course of 2005, 21 audits and inspections were conducted in relation to quality, safety, security and HSE. Civil Aviation Authority - Norway (CAA) conducted an intermediate inspection of the ground services, aerial navigation and flight weather service in The inspection confirmed that OSL s services within these areas comply with CAA s requirements. Employees and working environment OSL had an average of 486 employees in 2005, compared with 481 in At the close of 2005, Oslo Lufthavn AS had 425 permanent employees, down from 416 at the close of the previous year. The difference between the total number of employees and permanent employees is mainly due to extra workers being employed temporarily during the winter season. The company attaches great importance to a good working environment for its employees and complies with all the relevant requirements. A Working Environment Committee has been appointed, which has held regular meetings. The company s personnel turnover is low: 2.3% in 2005, compared with 3.2% the previous year. A Cooperation Forum has been established in the company, in which regular meetings are held between the management and union representatives. The collaborative climate is considered to be good. The average age in the company is 44 unchanged from The rate of absences due to illness fell from 5.6% in 2004 to 5.3%. Long-term absence due to illness still constitutes the largest proportion of total absences due to illness. Follow-up plans are prepared for all people who are on long-term sick leave. OSL previously entered into a collaborative agreement for a more inclusive workplace (MIW). The object of MIW is for the workplace to function as the main arena for preventing unnecessary absences due to illness and exclusion from working life. Seen in relation to when the company implemented the systematic follow-up of absences due to illness, absences have been reduced by more than 35%. Annual Report Oslo Lufthavn AS Page 5 of 9

6 In 2005, nine injuries to personnel resulting in absence from work, totalling 189 days, were recorded. The equivalent figure for each of the three preceding years was seven. The company plays an active role in relation to health, safety and the environment and works systematically to prevent absences due to illness and occupational injuries in those who work at the airport. Everyone with access to the airport must undergo an HSE exam, fire protection training and a separate security training course. To discharge its principal enterprise responsibility pursuant to the Working Environment Act, Oslo Lufthavn AS has established an overarching HSE (Heath, Safety and Environment) structure at the airport. Regular HSE inspections are made of the airport s communal areas under the leadership of OSL and with the participation of the management and chief safety deputies of the companies in question. In addition, regular safety inspections are undertaken within the company. OSL has established a co-worker support scheme in a separate care plan as part of Emergency Planning. This scheme was primarily established to assist employees of OSL who experience critical and serious events at work. Gender equality 24% of the company s personnel are women, an increase from 22% the previous year. The percentage of women in management positions is 8%. Of newly recruited employees in 2005, 63% were women, compared with 36% the year before. The average salary levels of women in management positions are 95% of the average for men, compared with 94% in Proportionately more women than men take further and continued education courses. Men and women have the same working hours arrangements. 6% of the women work part-time compared with 0.6% of the men. 40% of the shareholder elected members of the Board of Directors are women. It is OSL s goal to achieve gender balance, especially in senior positions. The enterprise has focused on and will continue to focus on developing female managers through the group s manager development programme, and in the case of otherwise equal qualifications, women shall receive preference. External environment In 2002, a lawsuit was filed against OSL pursuant to the provisions of the Neighbouring Properties Act regarding noise from the airport. Of the original 639 plaintiffs who filed a complaint with the conciliation board, 223 elected to bring the case before the Eidsvoll District Court. Due to the large number of plaintiffs, it was agreed that initially the court should deal with a representative sample of 26 cases. Judgment in the District Court was rendered at the beginning of There the court found for three of the 26 sample plaintiffs, and OSL was ordered to pay compensation and litigation costs. OSL was awarded litigation costs from 18 of the 23 plaintiffs who lost their cases. The District Court s judgment was appealed to the Court of Appeal, which handed down its judgment on 26 November In this OSL was ordered to pay a total of NOK 3,525,000 in damages to all the plaintiffs, and to pay the plaintiffs litigation costs in the amount of NOK 5,915,147. The judgment has been appealed in its entirety to the Supreme Court, and the case will be heard in March Annual Report Oslo Lufthavn AS Page 6 of 9

7 2005 saw the start of the construction of Europe s first infrared de-icing facility at OSL. The facility will be operated by Scandinavian Ground Services AS. The facility will start operations in the winter of 2006 and OSL will monitor its operation carefully with regard to operational stability and environmental benefits. Two minor breaches of the discharge permit for groundwater were confirmed during the de-icing season in The collection rate for aircraft de-icing fluid was 82%. OSL initiated an extensive project that aims to establish long-term critical loads for de-icing chemicals in soil and groundwater. The project will be continued in Air quality at the airport is affected by many factors, both local and regional emissions, as well as long-range pollution. A local monitoring facility has in recent years been located in a residential area in the vicinity of the fire drill area. The results from this show that the levels of particulate matter (PM 10 ) and nitrogen oxides (NO x ) are well below the threshold values in the Pollution Control Regulations. For a more comprehensive review of the environmental conditions in and around the airport, the Board would refer you to OSL s Environmental Report Future trends and challenges The aviation sector has undergone major changes in recent years. The established airlines have undergone major costs reduction programmes and new players have entered the market, and because of this the competition situation has become significantly tougher. There are now many more players at the airport than there were a few years ago, and we expect this trend to continue. Overall the Board of Directors expects this trend to result in an increase in traffic in the years ahead. For OSL s part this situation is generating increased demands for flexibility in the form of infrastructure adaptations, and lower prices for our services. We expect to reduce our prices in the years ahead as well. The results presented by OSL s largest customers show that they have taken a big step towards achieving satisfactory profitability. Should this trend be sustained, it will mean that the airlines will have a better basis for both maintaining current routes and expanding their operations. The company is also taking the initiative with regard to improving revenues from ancillary activities. In 2006, the company will for the first time experience the full-year effect of duty free sales in arrivals. The company is in the process of planning the expansion of parking facilities at the airport and at the same time its wholly owned property company, Oslo Lufthavn Eiendom AS, is in the process of expanding the hotel. These developments are important with respect to meeting the increasing demand within these areas. Airport Plan ( ) The Airport Plan, which focuses particularly on the need for and possibility of a future third runway, was submitted to the Ministry of Transport and Communications in April The Ministry of Transport and Communications is currently examining aspects of the Airport Plan. The Akershus County Administration has started work on a regional county plan for Gardermoen. Ullensaker Municipality intends to draw up a municipal plan with a special emphasis on land use and growth patterns for the area around the airport, but is awaiting reports from the Ministry of Transport and Communications. Resolutions that prevent developments from hemming in the airport are essential. Studies show that there will be a need for a third runway around Annual Report Oslo Lufthavn AS Page 7 of 9

8 Ownership The company is wholly owned by Avinor AS. Avinor has invested a total of NOK 1,070.1 million in equity in OSL: NOK 250 million in share capital, NOK 660 million in a share premium account, and NOK million in group contributions (after tax). Part of the share premium account has been used to cover previous years losses. At 31 December 2005, the called-up and fully paid share capital entered in the balance sheet consists of NOK 250 million in share capital, NOK 46.9 million in the share premium account, and NOK million in group contributions, a total of NOK million. Oslo Lufthavn Eiendom AS OSL has a wholly owned subsidiary, Oslo Lufthavn Eiendom AS (OSLE), which has been assigned responsibility for developing and building commercial buildings in the airport s central area. The company owns the hotel adjacent to the terminal, which is operated by the Radisson SAS chain, the OSL Flyporten office and service building, and a parking garage for employees. The company s profit before tax in 2005 was NOK 47.2 million. Oslo Lufthavn Tele og Data AS Oslo Lufthavn Tele og Data AS (OLTD) is owned 50/50 by Telenor Business Solutions AS and OSL. The company is the total supplier of telecommunications, IT services, IT systems and IT products to airlines, service companies, retail businesses, government agencies, and the general public at Oslo Airport Gardermoen. In 2005, the company recorded sales revenues of NOK 31.7 million and posted a pre-tax profit of NOK 2.4 million. The Board of Directors At the ordinary general meeting the Deputy Chairman of the Board of Directors, Lasse Bardal, and board members Ola M. Rinnan and Jon Sjølander were re-elected for new terms. The Chairman of the Board, Randi R.S. Flesland and board member Linda B. Silseth had already been elected for the period and continued as members of the board on this basis. In connection with Randi R.S. Flesland resigning her position as the Managing Director of Avinor AS, an extraordinary general meeting was held on 31 January Lasse Bardal was elected as the new Chairman of the Board, and Jon Sjølander was elected as the Deputy Chairman. Margrethe Snekkerbakken was elected as a new permanent board member, and Randi R.S. Flesland left the Board of Directors. These changes will apply until the ordinary general meeting in Of the board members elected by the shareholders, three members are from Avinor and two are external. The Employee representatives on the board are Ole Hansen, Jan Fagernes and Geir Larsen. Annual Report Oslo Lufthavn AS Page 8 of 9

9 Application of the profit for the year The board proposes that the company s profit for the year of NOK 302,714,643 be transferred to other reserves. Gardermoen, 7 March 2006 Lasse Bardal Jon Sjølander Linda B. Silseth Chairman of the Board Deputy Chairman Ole Hansen Margrethe Snekkerbakken Ola M. Rinnan Jan Fagernes Geir Larsen Nic. Nilsen Managing Director Annual Report Oslo Lufthavn AS Page 9 of 9