Aéroports de Paris - 2019 Universal registration document

BUSINESS OVERVIEW 05 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 2019, Paris Aéroport estimates that it handled 2.20 million tonnes of cargo (-2.3% compared with 2018) at the Paris-Charles de Gaulle (2.10 million tonnes, down 2.5%) and Paris-Orly (0.099 million tonnes, up 3.3%) airports. In 2019, 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 and 44% by all-cargo aircraft (stable compared to 2018). The change in 2019 as compared to 2018: ◆ a -0.7% decrease in all-cargo movements and therefore the related hold capacities (compared to stability over the previous years); ◆ an overall -1.4% decrease in cargo tonnage, less significant than in mixed tonnage (-2.8%). Despite this, in 2019, 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 +100.000 sq.m., i.e. +15% of the cargo park) for the Parisian platforms is based on four axes: Recovering traffic The vast majority of cargo is transported on passenger flights at Paris- Charles de Gaulle. In the context of increased competition between airlines, the cargo-passenger combination is a decisive profitability vector impacting companies’ choice of location. Groupe ADP thus builds upon the strengths of its cargo business to expand its air network. Welcoming all-cargo companies remains a strong focus of Groupe ADP’s strategy. It is carrying out marketing actions aimed at attracting them to set up in its airports. Groupe ADP is also pushing for the development of traffic rights (development of all-cargo frequencies on certain specific lines, grant of fifth-freedom rights) and all measures to simplify administrative procedures in order to improve the competitiveness of air freight in France. Commitment to better quality of service and a more attractive cargo city 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.). 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. The creation of international partnerships with other major Cargo airports is one of the new focuses chosen by Groupe ADP to develop, boost and secure flows, by setting up privileged corridors for segments identified as strategic and shared by the two partners.

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AÉROPORTS DE PARIS ® UNIVERSAL REGISTRATION DOCUMENT 2019