Aéroport de Paris - 2018 Registration document

BUSINESS OVERVIEW 06 OVERVIEW OF THE MARKET

Cargo traffic There is no single international definition of what constitutes air cargo. The International Civil Aviation Organisation (ICAO) defines air cargo as merchandise transported by air for a fee, with the exception of mail, while the International Air Transport Association (IATA) defines cargo as all goods including mail, with the exception of baggage. Groupe ADP adopted the IATA definition. The concept of cargo includes freight and mail. Cargo is a highly complementary business to passenger transport because it allows for the optimum use of aeronautical infrastructure throughout the day, as cargo companies do not have the same scheduling constraints as passenger companies. Cargo is transported both on all-cargo flights and on mixed flights. Cargo is carried in the holds of passenger aircraft therefore contributing to the economic balance of the passenger routes. TAV Airports also operates cargo activities at the Tblissi (Georgia), Monastir and Enfidha (Tunisia), and Medina (Saudi Arabia) airports. Trends in cargo and mail at the Paris-Charles de Gaulle and Paris-Orly airports In 2018, Paris Aéroport estimates that it handled 2.25 million tonnes of cargo (-1.9% compared with 2017) at the Paris-Charles de Gaulle (2.16 million tonnes, up 1.8%) and Paris-Orly (0.095 million tonnes, down 4.8%) airports. In 2018, for the first time since 2011, a decrease in the proportion of cargo tonnage embarked in passenger aircraft holds was observed, along with an increase in that using the holds of all-cargo flights. 56% of cargo transited by “passenger” aircraft (compared to 60% in 2017) and 44% by all-cargo aircraft (compared to 40% in 2017). The explanation is no doubt the combination of three factors: ◆ a +2.3% increase in all-cargo movements and therefore the related hold capacities (compared to stability over the previous years); ◆ a 2% increase in passenger luggage on wide-bodied aircraft, reducing the residual hold capacities for Cargo transport; ◆ an overall -1.8% decrease in cargo tonnage. Despite this, in 2018, the volume of cargo transported on passenger flights considerably exceeds that transported on all-cargo flights. At this stage, therefore, the strategy of the major cargo transporters, consisting of taking advantage of the significant hold capacities in passenger aircraft in order to optimise the revenue/cost mix, is not called into question. This strategy of using “passenger” holds rather than all-cargo aircraft holds is also made possible by the change in aircraft and the high frequencies and connections offered by the Paris-Charles de Gaulle hub. Cargo strategy Groupe ADP’s strategy for its cargo business is to develop and increase the appeal of its Paris airports in order to win new markets and support cargo operators in the development of their activities. In this context, Groupe ADP’s goal with regard to cargo is for Paris- Charles de Gaulle to become the European leader in the years to come. Development of the cargo business is one of the themes of the CONNECT 2020 strategic plan, which specifically includes the creation of 100,000 sq.m. of additional cargo facilities over the 2016-2020 period, to support our customers’ growth.

Groupe ADP’s cargo strategy and the pursue of growth for the 2016-2020 horizon (estimation of +100.000m 2 , i.e. +15% of the cargo park) for the Parisian platforms is based on four axes: Recovering traffic This entails the implementation of a marketing support programme to encourage the development of existing or new cargo routes or the introduction of new all-cargo airlines. Welcoming all-cargo companies remains a strong focus of Groupe ADP’s strategy, particularly as the “hold” capacities of passenger aircraft have tended to decrease due to the increase in average passenger luggage. It nonetheless remains true that transporting cargo in passenger holds will remain a significant activity in the context of increased competition between airlines, with the cargo-passenger combination becoming a decisive profitability vector for major operators. Groupe ADP also campaigns for the development of traffic rights (5th freedom rights) and measures for administrative simplification which improve the competitiveness of air cargo in France. In this respect, the adoption in 2015 of the automatic reversal of VAT liability on import, a measure defended by Groupe ADP, allows agents and loaders to optimise their cash flow since they are no longer obligated to pay VAT on customs clearance. Commitment to better quality of service and a more attractive cargo zone Besides the modernisation works and projects to offer facilities that meet the highest international standards, efforts are also focused on cleanliness, signage and security. A large security project undertaken with all of the operators installed accesses with video surveillance to improve lorry traffic and make the merchandise flows more secure. With regard to real estate, the priority is to develop the active “front line” (zone comprising the warehouses closest to the aircraft, at the border between airside and landside). To do this, the group invested in border cargo warehouses with direct access to the runways to facilitate the loading/unloading/customs clearance operations of all-cargo aircraft. It has also increased the number of advanced cargo storage platforms to take into account the movement of cargo to the holds of passenger aircraft. The challenge is to also offer “tailor-made” solutions to the cargo forwarding agent partners: either in divisible warehouses co-financed by Groupe ADP or, like Bolloré or DHL, in private warehouses, or even by third party investors. Plan the development of the cargo business over the long term In order to attract pharmaceutical flows, with high added value and as true growth drivers for the cargo business, in summer 2016, Groupe ADP, working with IATA, launched an initiative that enables the Paris- Charles de Gaulle cargo community to obtain CEIV Pharma certification; this has become the standard certification in response to increasing demand from the pharmaceutical industry. The first phase of this initiative, officially launched on 27 January 2017 and co-financed by Groupe ADP, includes ten Cargo partners representing the entire cargo chain (road carriers, transport commissioners, airlines, ground handling, runways and shops, etc.). In 2018, two additional partners obtained their certification, bringing the number of certified companies at Paris-Charles de Gaulleto to eight. Similarly, work has been undertaken to create labels or initiate certification of other French sectors of excellence (luxury, perishable, animal genetics, etc.) in order to develop flows around these high value-added products.

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AÉROPORTS DE PARIS ® REGISTRATION DOCUMENT 2018