Economic regulation: How charges at Schiphol
are regulated

Our income differentiates between regulated and non-regulated flows in what is known as a dual-till system. Rates for aviation activities at Amsterdam Airport Schiphol are regulated. The amounts that Schiphol Group can charge are restricted to the costs associated with primary airport operations and related infrastructure, and security.

In accordance with the new Aviation Act governing the operation of Schiphol, which took effect on 1 July 2017, the charges will no longer be fixed annually, but every three years. This change will take effect for the 2019-2021 period. Another change is the introduction of a mandatory contribution from non-aviation activities to aviation activities, the level of which is determined by Schiphol's shareholders.

The return on aviation assets, the regulatory asset base, has been capped at the regulated average weighted cost of capital (WACC) determined for the next three-year period, on which the ten-year interest rate on Dutch government bonds has a considerable impact. This means that Schiphol Group's return on aviation investments depends on the general development of the interest rate. In 2018, the regulated WACC was 2.16%. For the 2019-2021 charges period, this WACC is set at 2.71% (after tax).

Non-aviation activities at Schiphol are not subject to the economic regulation of Amsterdam Airport Schiphol. This includes all activities in the areas of retail, food and beverage, media, real estate development and leases, and parking charges.

The operation of our regional airports remains unregulated as long as they do not exceed five million passengers per annum. Eindhoven Airport reached this limit in 2017, meaning that its airport charges will be regulated with effect from 2019. Some of our international activities are also subject to economic regulation.

Competitive charges

The fees we charge airlines for the use of Amsterdam Airport Schiphol are regulated and each year undergo a consultation with the airlines. The charges are subject to supervision by the Authority for Consumers and Markets (ACM) under the terms of the Dutch Aviation Act.

Schiphol is in direct competition with several of Europe's airports, and many of our passengers have the option of flying from or via neighbouring countries. Because of this, issues - such as the overall quality of our airports and the services we wish to provide to airlines, handling agents, passengers and other customers, as well as capacity - are of crucial importance. We note that Schiphol's price-quality ratio has compared favourably with those of our main European competitors over the past few years.

Airport charges structure 2019-2021

Following careful and extensive consultation with the airlines, on 31 October 2018, the charges for the first three-year period 2019-2021 were set according to the terms of the new Dutch Aviation Act, and will come into effect on 1 April 2019. The new charges will result in an average annual rise in charges of 7.9% over the following three years. This increase is a consequence of necessary investments and operational costs to accommodate current and envisaged passenger growth. The rise in charges for 2019 also incorporates non-operational factors related to a change in regulation including the treatment of airport charges settlements and the increase of the WACC (which together represent a 10% increase in airport charges).

Airport charges

The average increase of 7.9% annually for 2019-2021 includes an average 10.7% increase in 2019, an increase of 8.7% in 2020, and a 4.2% rise in 2021. The airport charges contain landing and take-off charges (including noise charges and emissions charges), passenger/cargo and infrastructural charges, security charges (both airport and governmental) and parking charges.

A significant sustainability element is built into the new charges structure. Landing and take-off charges will give preference to aircraft that are quieter and more environmentally friendly. More information on the sustainability element of the new structure can be found in Supply chain responsibility, located in the People, community and environment section of the performance chapter.

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Our processes
are the basis of
our value chain